REVENUE TRANSPARENCY

Two thirds of the world's poorest people live in countries rich in natural resources. In most countries, sub-soil minerals belong to the state. But in many countries, there is an inverse relationship between this public resource and public welfare. The links between resource wealth, poverty, conflict and corruption–the so called "resource curse"–are well documented. Studies have also shown that with effective and responsible governance, natural resources can generate revenues that foster economic growth and reduce poverty. Public information and public accountability are the best guarantee that a country's resource wealth will translate into lasting benefits for its citizens.

Oil, gas and mining companies make payments directly to governments in the form of royalties, bonus payments and taxes, providing the state with an autonomous flow of funds that is independent of its citizens. These windfalls reduce the need for taxation and thereby eliminate a key motivator for citizens' scrutiny of public finances.
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EXPENDITURE TRANSPARENCY

It is impossible to ensure proper management of natural resource wealth by looking exclusively at revenues. Transparent and accountable management and expenditure of public funds is essential to addressing the poverty, corruption and autocracy that too often plague resource rich countries.

Citizens in resource rich countries must have the data and the tools to assess the revenues flowing into their government's coffers. But the revenue information produced from exercises like EITI is only useful insofar as citizens and policymakers can use it to analyze the management, prioritization and spending of these funds for economic growth and human development.
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CONTRACT TRANSPARENCY

The contracts between governments and oil, gas and mining companies are central to any effort to trace revenues and expenditures in the extractive industries. Extractive industries contracts determine the benefits, obligations and indeed the transparency of the agreements between countries and industry.

The recent commodities boom in oil, gas and mineral resources such as copper, tin and iron–driven in part by growth in middle-income countries such as China and India–has resulted in unprecedented profits for many extractive companies. But in many countries where these resources are found, government budgets remain meager, high poverty levels persist and development indicators are dismal.
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