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 email@example.com
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.
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Photo taken by Nick Talor. Flickr.