Afghanistan’s membership suspended by Extractives Industries Transparency Initiative

Sayed Ikram Afzali, Executive Director | @SIAfzali   and 

Wahidullah Azizi, Integrity Watch Afghanistan

On January 18, Afghanistan was suspended from membership of the Extractive Industries Transparency Initiative (EITI) – a key international mechanism for improving transparency in the extractive sector.

Afghanistan joined EITI in 2009. But since then it has failed to make satisfactory progress on data comprehensiveness and quality, timely reporting, and generating public debate – factors that led the Norway-based organization to find Afghanistan’s performance “inadequate.”

The lack of progress in implementing EITI standards over many years meant the suspension was not a surprise – even though there have been some signs of progress more recently. The EITI assessment commended Afghanistan’s efforts to improve “transparency in the management” of its extractive sector, but said this was not enough given the lack of overall progress. In its official statement, the EITI urged the government to continue implementing reforms in the sector and aim to meet the Standard in the next 18 months.

The government’s promise of re-admitting the country to the initiative by June 2019, is welcoming. But what matters most is action instead of promises. Integrity Watch and Global Witness issued a press release which highlights deep concerns that the government still does not provide full data on the country’s extractive sector – something which calls into question the ability of the government to manage the extractive sector in an accountable manner.

Afghanistan needs to make urgent progress under all EITI standards to comply with the standards within the self-imposed deadline of less than six months.  The problem is that genuinely transparency will threaten the interests of those who have benefitted from corrupt exploitation. It has been promised many times before and never delivered. Whatever the good intentions of the Minister, at this stage only one thing matters: is the data published, and published regularly, reliably, and comprehensively?

The suspension comes at the time where Afghanistan’s mining sector is in the spotlight for other reasons. The country is blessed with an abundance of natural resources such as copper, iron ore and rare-earth elements, as well as untapped hydrocarbon oil fields in Northern Afghanistan estimated to be worth billions of dollars. But it has not realized its economic potential to stand on its own feet.

Government corruption and lack of capacity has resulted in some of the mining sites in Afghanistan being exploited by non-state actors, fueling both an already deadly insurgency and exploitation by local power-brokers. On the Ministry of Mining and Petroleum’s own admission, there are more than 1400 sites that are being extracted illegally. CSOs have expressed major concerns over the legality of two major mining contracts recently signed by the government, and there are worries that US companies are being given an unfair advantage under pressure from the Trump administration.

Afghanistan’s suspension from EITI deeply threatens the government’s desire to be seen as a serious foe of corruption and abuses. It threatens to reduce investment by reputable companies, and to lead to further abuses in the sector. If EITI standards were implemented, the loss of huge sums of money to corruption and abuse could potentially be prevented and the resources could be channeled to the socioeconomic development of the country.

The government has made a greatly encouraging statement of its determination to return to full EITI membership in a very short timeframe, and there is no doubt that some of the key officials take that commitment seriously. They deserve sympathy for the scale of the challenge they face, and the concrete steps taken in the last few years give grounds for hope. But as the suspension makes clear, the time when good intentions and excuses have been enough is over. Civil society will support the government in the battle to reform the sector, but it has to be won.