Project Case Study
Validating Iraq as an EITI-compliant country
Conducting the analysis to validate Iraq's implementation of the Extractive Industries Transparency Initiative
In 2010, Iraq had 143 billion barrels of proven oil reserves, giving it, with 11% of global reserves, the world’s third largest proven deposits. The oil and gas sector accounts for two-thirds of Iraq’s GDP and over 90% of its public revenues.
These vast reserves have a clear economic and social impact on some of the poorest people in the world, who have an interest in being employed by the sector, or because of fence-line issues resulting from nearby exploration, which in Iraq involves sectarian problems because of the uneven dispersal of the oil areas between Shiite and Sunni populations.
The Extractive Industry Transparency Initiative (EITI) is designed to make payments from companies to government in the extractive sector transparent, regulating the industry in order to limit loss of revenue through smuggling and corruption, and encouraging international investment. Since the World Bank recently estimated the country requires an extra $1 billion a year to maintain current output, this is particularly important.
Prime Minister Noori Al Maliki formally launched the EITI programme in January 2010. In February 2010, the EITI International Board announced that Iraq had become a candidate country. Adam Smith International conducted the validation of Iraq’s implementation of the EITI as one of the few companies to have been accredited as an official validator by the EITI International Secretariat.
In conducting the validation, we assessed the criteria set down for Iraq to follow in order to join, including evaluating Iraq’s official work plan, the minutes to its on-going EITI meetings consulting key stakeholders including donor officials, company and government officials and ensuring the full engagement of companies and civil society. We committed to working hand-in-hand with the Iraqi EITI Secretariat throughout the project, maintaining close contact with the International EITI Secretariat.
Due to the economic and social impact the industry has on both the government and the local people, we had a clear responsibility to carefully consider these people when assessing candidate countries, so it was imperative that we assessed Iraq’s candidacy thoroughly. Our final report concluded that Iraq had met the necessary criteria to become an EITI-compliant country, and it was declared compliant on 12th December 2012.
“I would like to express my deep thanks to all those who have been working hard and constantly to enable Iraq to join this initiative”
Prime Minister Noori Al Maliki, January 2010