Minister of Foreign Affairs Jonas Gahr Støre

EITI Oslo Conference 2006. The Extractive Industries Transparency Initiative.

16 October 2006

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Excellencies, Ladies and gentlemen,

It is a great pleasure for me to welcome you all to Norway and to Oslo and it is a privilege for the Norwegian Government to host this conference.

During the preparations for this important conference – this big event – I have been thinking of the term “not my business”. What does it mean? What does it imply? What are the effects?

Many of us here are involved in the management of natural resources, in one way or another. Now, those who own the resources want to see how the wealth we have been trusted to take care of is handled. And, I would add, of course they do.

My goal – our common goal – is an international norm for revenue transparency in the extractive industries.

The EITI – the Extractive Industries Transparency Initiative – is a multi-stakeholder initiative. It was developed in close dialogue between governments, businesses and civil society.

The most important stakeholders, however, cannot be present here in the conference rooms. They are the world’s nearly three billion people living in poverty, many of whom in countries with considerable oil and mineral wealth. These children, women and men who yearn for and deserve education, health and a decent livelihood – they are the key stakeholders the EITI was created to serve.

I am convinced that increased transparency straightens the road from natural wealth to public goods.

This is why we are here. To take important steps forward to lift the resource curse.

This can only be done by improving transparency and accountability.

The EITI, with its specific and tangible objective – creating transparency in revenue streams – cannot, however, achieve this alone.

Neither does it claim that it can solve all the problems at once.

It is, however, an important, catalytic departure point, upon which our wider aims of improved governance, development and political stability are contingent.

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Dear friends,

Some see transparency as the opposite of privacy.

Norwegians are known to enjoy their privacy. Norwegians even have a specific term to describe the fact that “no neighbours can look in”. This is regarded as an attractive feature of any Norwegian home. If one of my countrymen does not succeed in finding such a place, he will probably close the curtains or put up a fence in order to ensure his privacy.

It is not that we are not sociable; it is not so that we have anything to hide. But there is a tendency in our national character to consider our “own business to be our own business”.

We are, of course, entitled to close the curtains of our own windows. We may lock our doors and mind our own business as we please. But, mind you, that is when it is our own business. It is not all right, however, to shut people out when we are dealing with their business.

And the natural resources of my country is the business of all Norwegians. In fact – they are the owners. It really is their business.

This fact is inspiring the way we are managing our natural wealth. In managing natural resources, we are custodians of assets that belong to others, to the people, and to the generations coming after them.

And this also applies to foreign policy. Foreign Policy is all about managing national and global interests to the benefit of the future, to the benefit of future generations.

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So what exactly is the EITI – who are we?

We have been called a curious coalition. A coalition of mighty statesmen, significant activists, powerful companies, influential investors, and skilled business men and women. A long line of “odd couples”. Each and every one of us here today has the power to make a difference – on their own. Very seldom does such a diverse and impressive assembly gather to work together – as it does today.

The fact that we are doing so – for this cause – is encouraging. It is a sign of emerging new governance. What states find hard to initiate, independent activists may help off the ground. Where civil society is powerless, companies may fuel progress.

At this point, I would specifically like to commend the role played by civil society in advocating change.

I know for a fact that this activity is not without risks. We should stand united in the defence of those who pursue transparency at the risk of intimidation and abuse, some of whom are also present in this room.

We should express our recognition for those brave people who dare to investigate and share their knowledge and insight with the larger public – even when direct threats loom. One such brave person – Anna Politovskaya – paid with her life on the streets of Moscow 10 days ago. Her mission was to exercise her right to find out what is really going on, her right to investigate, a right that should be unquestioned in any country with democratic credentials.

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This conference is an opportunity to take stock of the EITI initiative. We have made significant progress in the four years since the initiative was launched by Prime Minister Tony Blair. Twenty three countries have endorsed the EITI framework and are now in various stages of implementation.

In particular, I would like to commend Nigeria and Azerbaijan for leading the way as EITI pilots, as well as the governments that have been inspired by their lead and will report progress at this meeting.

I would also like to pay tribute to the UK and the World Bank for their continued and vital efforts to translate the EITI into concrete results.

And I would like to commend the extractive industry companies supporting the process. Many of these companies – that is many of you – have made great efforts in the challenging and complex task of assisting local implementation.

At this important stage in the EITI process, as it moves from infancy into youth, we must commit ourselves to taking the process forward. We must commit ourselves to turning a movement into a robust set of international norms that are validated in accordance with clear criteria and are governed by an agreed structure.

Therefore, the Norwegian Government wholeheartedly welcomes the recommendations put forward by the International Advisory Group (IAG). They set out the criteria for a locally owned, credible validation process and a governance structure that has legitimacy without creating bureaucracy for the sake of it.

Agreement on these recommendations will be a significant step forward towards our ultimate goal – a global norm for revenue transparency in the extractive industries.

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Ladies and gentlemen,

There is no shortage of challenges ahead. Let me highlight a few.

Firstly, people can easily be sceptical about initiatives like the EITI that are based on voluntary cooperation between a wide range of stakeholders. Rhetoric tends to overshoot reality and fosters the cynics’ impression that this is just a high-class debating society.

I recognise the inherent threat of guidelines being insufficient. But I reject the idea that progress can only be made through sanctions.

What I see as the truly innovative future of this process is that we are an informal coalition contributing to the formation of global norms and standards. Such work is normally the responsibility of the UN and other organisations with a global membership. But sometimes more diverse alliances are necessary in order to get initiatives off the ground. Ours is one such initiative.

There is – of course – a long way to go. Sceptics may say that the EITI process is only four years old, and that it includes countries with widespread corruption and lack of institutional infrastructure.

But we should not loose faith. The prudent, long-term stewardship of natural resources is a demanding task for developed and developing nations alike.

It has been, and continues to be, a challenging task for Norway. We have been in a favourable position to develop our petroleum sector. Our democratic institutions were mature, capable and ready to face the task of developing the riches of the North Sea.

We must appreciate that several EITI countries face a steep learning curve. At the same time, we must guard the integrity of the EITI label. It is, and must remain, a label that countries and companies take pride in wearing – and that justifiably commands respect.

Secondly, much remains to be done to make the EITI a global standard. Until now, multinational corporations headquartered in Europe and North America have been centre stage. This in spite of the fact that nearly 80 per cent of the world’s oil and gas resources are in countries where extraction is controlled by national oil companies.

This applies, for example, to the emerging economies of China, India, Russia and Brazil. Mobilising national extractive companies is essential to the future efforts of the EITI, even more so since these companies are expected to expand their global outreach in the years to come. And this can only be done by highlighting the benefits entailed in increased transparency, which is one of the core objectives of this conference.

Thirdly, we need to address further the specific context of the mining sector. While there are many links between the petroleum and mining industries, there are significant mining-specific challenges that we need to tackle.

Norway will take its part in leading this important process. It is an integral part of our efforts to share our experience in resource and revenue management. We are stepping up our energy for development programme, under which we are sharing our experience with countries that can benefit from what we have learned.

And we stand ready to support the follow-up process. I am therefore pleased to announce that Norway stands ready to host the international secretariat for the EITI and to shoulder a fair share of the expenses incurred.

Future success will depend on broad support. No single country can pull this off alone. Our offer is contingent on broad agreement among the EITI stakeholders and on the continued strong support of the United Kingdom and the G8.

Strong leadership requires that we start at home – by showing that we ourselves have done what we are asking of others.

Transparency is a fundamental principle in Norwegian petroleum revenue management. The figures relating to revenue streams from the Norwegian petroleum sector are all publicly available. They are audited by an independent public institution.

The implementation tools chosen may vary from country to country, but the principles remain firmly the same. The pursuit of transparency in Norway is a team effort, as reflected by the disclosure by Hydro and Statoil of their payments to foreign host countries.

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I wish you all a pleasant and efficient stay in Oslo. We have much ground to cover in the next two days. We should reach out to new countries and organisations that can make the EITI stronger. We should allow ourselves to take a critical look at what has – and what has not –

worked so far. And we should consolidate the EITI through reaching agreement on the International Advisory Group’s recommendations.

If we are to do all this, we must focus on what we have in common, rather than our differences. I am certain that we will be inspired in our efforts by a strong sense of common purpose.