US withdraws from anti-corruption fossil fuel transparency initiative
The US has taken further steps to strengthen fossil fuel businesses, by withdrawing from an international initiative that monitors transparency and corruption in the revenues from mineral extraction and the oil and gas sector.
The US announced that it was withdrawing from the Extractive Industries Transparency Initiative (EITI) on Thursday (3 November). The EITI was founded in 2003 and has since seen 52 nations sign up to set a global disclosure standard for revenues generated from fossil fuel assets.
Through the EITI the US Government has to disclose these revenues, including payment reports issued by relevant companies that show any links to publicly-owned money or any donations.
The director of the US Office of Natural Resources Revenue Gregory Gould sent a letter to the initiative noting that the US was withdrawing “effective immediately”. The letter claimed that the “domestic implementation of EITI does not fully account for the US legal framework”.
In response, the EITI chair Fredrik Reinfeldt criticised the decision, suggesting that it sent the “wrong signal” to global efforts to tackle corruption.
“This is a disappointing, backwards step,” Reinfeldt said. “The EITI is making important gains in global efforts to address corruption and illicit financial flows. Our work supports efforts to combat transnational crime and terrorist financing. It’s important that resource-rich countries like the United States lead by example. This decision sends the wrong signal.
“I take this opportunity to thank everybody involved in the USEITI multi-stakeholder group (MSG). I trust the United States government, industry and civil society will continue to support the EITI’s important work internationally."
Rumours had surfaced about the US departing the initiative earlier in the year, after Congress axed certain extraction rulings, which reduced the requirements on fossil fuel companies to disclose taxes and fees paid to governments. The US had been involved with the EITI since 2014.
Pollution and profits
The withdraw was announced after a co-authored report by Corporate Accountability found that efforts to push towards the goals of the Paris Agreement had been shackled in favour of economic growth for some of the world’s largest polluters.
Published by the Guardian, the report claims that the huge leveraging power of major fossil fuel firms had “skewed outcomes on finance, agriculture and technology,” to benefit the sector.
Specifically, the report found that the UNFCCC’s Climate Technology Network, meant to advise on green innovations and technology for the developing world, had been influenced by a member of the World Coal Association, while its board has included managers at Shell.
A separate report launched this week by Carbon Tracker revealed that oil demand could halve during a “swelling tide” of climate regulations and advances in clean technologies, with a quarter of refining capacity potentially closing by 2035.
President Trump has already announced that the country is withdrawing from the Paris Agreement on climate change, although the earliest official withdrawal route would be November 2019.
Government delegates from nations still involved in the Paris Agreement – only Syria and the US have opposed the deal – will meet in Germany next week for the COP23 climate talks in Bonn. While much of the talking and negotiations will discuss the US withdrawal, nations don’t have to officially agree to a roadmap towards the goals until 2018, at COP24 in Katowice, Poland.