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A Decade of EITI in Azerbaijan

In late September, the Azeri government hosted a glitzy conference to celebrate ten years of the Extractive Industries Transparency Initiative. Azerbaijan had in fact been one of the founders of EITI, a voluntary standard to promote the transparency of revenues in resource rich countries.

Azerbaijan is incredibly rich in natural resources indeed. At the beginning of the 20th century it was providing most of the world’s oil. While it no longer dominates the global market to the same extent, foreign companies continue to invest billions in the country’s extractive sector, and hydrocarbons make up almost all of Azerbaijan’s exports.

The sale of such vast amount of oil could transform the lives of citizens for the better, but sometimes revenues are mismanaged or – worse – used to shore up entrenched power. As such, Azerbaijan’s enthusiasm regarding EITI was welcome.

For a while, Azerbaijan was the poster child of EITI. It was not only the first country to reach compliant status but also the country to have published the most EITI reports. This darling of the EITI status was one the Azeri government is very proud of – and which features in many of its publicity materials.

Ten years and 17 reports later, what has been the impact of EITI?

On the face of it, as President Aliyev wins a dubious third term, nothing much seems to have changed. Still the same President, more corrupt than ever. Still secret deals made behind doors.  According to Human Rights Watch “There is much speculation that some oil, gas and mining production or service contracts may also go to those with insider connections, but it has been difficult to establish due to the lack of transparency over the companies involved.” In 2011   journalists discovered that a controversial gold mining company was ultimately owned by the President’s two daughters.

Citizens still do not genuinely know how their resources are managed, nor where the revenues go. Corruption has actually increased over the past decade, and President Aliyev was dubbed ‘Corruption Person of the Year’ by the Organized Crime and Corruption Reporting Project.

Yet Azerbaijan did make concrete advances in terms of transparency, publishing revenues and complying with EITI standards. So how can change be so slow?

If we were only looking at the publication of revenues, the verdict would be less harsh on Azerbaijan. According to the Revenue Watch Governance Index of 2010 – which doesn’t take into account enabling environment -  Azerbaijan scores high on transparency.

But transparency cannot operate in a vacuum, and in order for transparency to be genuinely translated into accountability other conditions need to be in place. People need to be able to access relevant data and need to be able to use it without fear of intimidation.

Citizens in Azerbaijan are not free to call the government out on its actions or engage in an open debate over natural resources. The country appears to imprison activists and politicians on a whim and Human Rights Watch reports that conditions for civil society have been seriously deteriorating since 2009 The most recent Revenue Watch Resource Governance Index takes enabling environment into account in its methodology – as a result, Azerbaijan has plummeted down the table of transparent governments.

Yet for all this, the picture isn’t entirely bleak. According to civil society activists in the country, the implementation of EITI created a platform – the first of its kind – through which government, civil society and companies could cooperate.

The disclosure of revenues, imperfect as it may have been, is still preferable to the complete lack of data which existed before.

Finally, the EITI has introduced – albeit on a minimal level – the principle of transparency, and possibly helped pave the way to further transparency initiatives such as the Open Government Partnership. It may be far from perfect, but still better than nothing.

The new EITI standard, adopted in May, is robust and comprehensive. It requires more detailed information – concerning project level payments for instance – which will be easier for citizens to use, provided they have the space to use it.

Azerbaijan has committed to becoming the first country to implement the new standard. This could provide an important opportunity for civil rights activists, although implementing the standard will certainly prove a challenge.

When it comes to next steps, civil society activists look forward to working towards the implementation of the new standard. Civil society will push for the government to implement the ‘encouraged’ parts of the standard, rather than just the ‘required’ parts.  Activists will also base future research on the new, more detailed information to come out of the EITI reports.

Does this new standard prove a turning point for transparency in Azerbaijan? With a President who won 85% of the vote and a human rights record which continues to deteriorate, it may be difficult at the moment to see the light at the end of the tunnel.

What is certain is that many Azerbaijani citizens are committed to their work for a more transparent and fair extractive sector. Only time will tell whether they succeed in turning the tide.

This newsletter is dedicated to exploring Azerbaijan and ten years of EITI – if you would like to find out more about PWYP’s work in the region, please contact the Secretariat at info@publishwhatyoupay.org

Thank you to Fidan Bagivora, Gubad Ibadoglu, Galib Efendiev, Zorhab Ismayil and Alex Gillies for their insight and comments which provided the background information to this piece.

Do you disagree with the story presented here? Let us know and we will publish your thoughts in the next newsletter


Photo taken by Nick Talor. Flickr.

In Brief

  • The 9th PWYP Eurasia meeting took place in Baku in September. Read the Communiqué.
  • Revenue Watch organised a training session in Batumi on the new EITI standard. Find out more about it. 

Civil society and EITI in Azerbaijan – blissfully married or on the rocks?

PWYP’s International Director Marinke van Riet spoke at the conference in Baku celebrating 10 years of EITI in Azerbaijan. Below is a blog adaptation of her speech.

In many ways, the role of civil society in the EITI is like a marriage.

Firstly, civil society provides legitimacy to the EITI. Without a husband or wife who enters into a consensual and voluntary arrangement there is no marriage. Without an engaged, independent and free civil society there is no EITI.

Trust and dialogue are paramount. Civil society is a key partner in the initiative and dialogue is crucial so that trust between the various constituencies grows.  The more open and transparent the extractive sector, the more trust citizens will have that their resources are being managed for the benefit of all.

A marriage is about negotiation and compromise. Perhaps you want to negotiate another child, a different house, a different job or a move. PWYP coalition members negotiated hard for the new EITI standard to be ambitious and thorough, in order for the initiative to realise its goals.

Another key task for civil society is monitoring or being a watchdog; making sure your partner keeps their end of the deal or contract. He or she doesn’t go astray looking at other women or men. Giving each other the feeling that you are being watched plays a crucial role in translating transparency to accountability.

Finally - a marriage cannot be seen in isolation of its wider environment. It takes a village to raise a marriage. The best marriages are those that are interdependent, benefitting from and thriving in the wider enabling environment where friends, family and people can function as marital counsellors, give advice and have debates.

So what is the status of this EITI-CSO marriage in Azerbaijan? Is this a solid marriage heading hopefully for a silver anniversary? Is it a marriage of convenience? Or are we headed for divorce?

I am taking the liberty to be your Azeri marriage counsellor; imagine yourself on the sofa in my practice and I will give you my analysis.

…. Click here to read the rest of the blog

Ten years of EITI in Azerbaijan - media round-up

  • PWYP International Director talks to Radio Free Liberty about EITI and Azerbaijan…
  •  … as does Revenue Watch’s Head of Governance Alex Gillies, read the transcript of her interview here
  • Radio Liberty also discusses whether oil revenues in Azerbaijan are having an impact on citizens

When Facades Are Not Enough: The Future of the EITI in Azerbaijan

This is a blog from Alexandra Gillies, Head of Governance at the Revenue Watch Institute. You can read the full blog here

As a first-time visitor to Baku, the gilded and glossy capital of oil-rich Azerbaijan, I was fascinated to see how the government has affixed new facades on many of the city's Soviet-era apartment buildings – one part of an ambitious beautification campaign. While the interiors remain unchanged, casual visitors like me can enjoy the lovely architectural results.

The Azeri government has applied a similar logic to its participation in the Extractive Industries Transparency Initiative (EITI), a prominent international reporting standard that requires the disclosure of oil and mining revenue data through a process governed jointly by government, industry and civil society.

The first to sign up, the first to become compliant, producer of the most reports, Azerbaijan has racked up EITI achievements in a bid to improve its international image. Furthering the campaign, the government is hosting an international conference on September 26 to herald the tenth anniversary of its EITI participation.

However, adopting just the trappings of transparency does little to alter interiors.

… read the rest of the blog

Photo taken by Niyaz Bakılı, Flickr.

Job Opportunity

Publish What You Pay seeks a Programme Officer for the Extractive Industries Transparency Initiative (EITI ) to support PWYP work related to EITI at global and national levels through dedicated coordination and communication; advocacy, research and analysis; and capacity building to national coalitions and members.  The Extractive Industries Transparency Initiative is a global reporting standard which promotes transparency and accountability in the extractive sector.

To Apply: Please email a cover letter and CV before 5 November 2013 to: recruitment-ECP@opensocietyfoundations.org. Include in subject line your name, surname and job code PO EITI

For more information please visit our website.