More transparency in the extractive industry
- KfW Bankengruppe joins the Extractive Industries Transparency Initiative (EITI)
- Aim: mobilising extractive revenues for poverty reduction
KfW Bankengruppe is to join the supporters of the Extractive Industries Transparency Initiative (EITI). EITI is a voluntary coalition of governments, companies, industry associations and representatives of civil society, aimed at ensuring the accountable payment of revenue from raw materials extraction into the national budgets of the respective resource-rich developing countries and its use for sustainable development. The task of representation in EITI has been assigned to DEG, which is responsible in KfW Bankengruppe for private-sector promotion in developing countries. “By joining this Initiative we shall promote the broader acceptance of this international transparency standard. With our EITI membership we also want to send a signal to German enterprises to join the Initiative as well,” said DEG Board of Management member, Dr Michael Bornmann.
The EITI process will improve the transparency of revenue streams in the extraction of oil, gas and other commodities, making it easier for the public to monitor the whereabouts of these funds. The raw materials needs of the industrialised nations afford the developing countries the opportunity to improve their economic situation and standard of living. Due to management problems, corruption and local conflicts in many resource-rich developing countries, however, much of the income earned is not used for the benefit of the broad population and for promoting sustainable prosperity growth.
Under its G8 Presidency in 2007, Germany pressed for strengthening EITI further and held a global conference on resource governance at the end of 2007. It provides political and financial support to the Initiative and is presently itself a member of the international EITI Board. Besides KfW Bankengruppe represented by DEG, seven international development financiers currently number among the supporters of EITI, including the World Bank Group’s International Finance Corporation (IFC) and the African and Asian Development Banks.
