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Financial Times: Germany vies with Norway to host oil, gas and mining transparency body

By Hugh Williamson in Guatemala City: Published: November 20 2006 02:00 | Last updated: November 20 2006 02:00

Germany and Norway are competing to attract the new headquarters of the international initiative to promote financial transparency in the oil, gas and mining industries.

The battle between Bonn and Oslo, the cities proposed by the two countries to host the Extractive Industries Transparency Initiative, underlines the success of a project that until a few years ago amounted to little more than a battle cry of non-governmental groups.

Under EITI, governments of resource-rich countries commit to publishing payments by companies and revenues from resource sales, in what for decades has been one of the world’s least transparent and most corruption-ridden industries. Companies can also pledge to open their books.

The initiative was highlighted as a positive anti-graft step at a global anti-corruption conference in Guatemala City ending at the weekend.

Ben Mellor, a British development ministry official and current EITI co-ordinator, said that, to retain credibility, EITI should press for state-backed oil companies from emerging economies to become more transparent too.

EITI membership includes 25 governments, including Nigeria, Azerbaijan, Cameroon and the Democratic Republic of Congo, and 24 oil and mining companies, including BP, Shell and Anglo American.

Governments and companies last month decided to send senior representatives to a new EITI governing board, where they will sit alongside – and share voting rights with – five NGO representatives.

Germany and Norway both want to boost their transparency credentials by winning the headquarters, set to manage a $40m three-year budget. In an internal document seen by the Financial Times, Germany’s economics ministry last month offered €2.1m ($2.7m, £1.4m) for EITI projects and rent-free facilities in Bonn, the former capital.

Norway also made an undisclosed financial bid, officials in Oslo said last month. The board is due to decide on the venue at a meeting in New York on December 7.

The outcome is particularly important for Berlin, which plans to present support for EITI as an achievement of its presidency next year of the G8 group of industrialised countries.

Charles McPherson, a World Bank adviser on the oil and gas sector, said EITI could help tackle the “resource curse” of developing countries that failed to use oil and other revenues effectively to address poverty, but said it must be broadened. The financing streams used by Chinese and Indian companies “remain very opaque”, he said.

Copyright The Financial Times Limited 2006

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