In this interview, Helen Clark, former prime minister of New Zealand and current chair of the Extractive Industries Transparency Initiative (EITI), shares lessons from COVID-19, her views on accountability in public life, and advice for strategic social investors.
Battling a pandemic requires leadership. The U.S., and many other countries, did not have leadership that was listening to and acting on the advice of public health and infectious disease experts.
Battling a pandemic also requires having the right strategy.
Many countries that struggled could have adopted the zero-tolerance strategy that helped New Zealand, Australia, Taiwan, Vietnam, Republic of Korea, and others, more effectively control and stop COVID-19. It is sometimes called an elimination strategy, because it requires that wherever COVID-19 rears its head, you need to stamp it out — immediately.
While COVID-19 is around, as it may be for the rest of my lifetime, it will find a way to leak through whatever control mechanisms we put in place. So, countries should adopt the elimination or zero-tolerance strategies that have proved successful in East Asia and the Pacific. That requires detecting and containing the virus through robust testing, contact tracing and quarantine systems. Other public health measures, like masking and physical distancing, will also need to continue to be applied where there is ongoing risk. Wide uptake of vaccination is also essential.
The extractive sector has historically been associated not only with corruption but also with fueling violent conflict. So, getting extractive sector governance right becomes extremely important. The consequences otherwise are dire.
The EITI Standard sets expectations of good governance. Countries that sign up to implement the standard and systematically take action to meet it will over time make significant governance improvements and will likely see more revenues from extractives benefiting society at large.
What gave me hope that this was achievable?
A lot of problems the world faces look intractable. How are we going to tackle climate change, hunger, and extreme poverty? But you can’t just say that “these problems are too big. I’ll get out the golf clubs and let future generations worry about it.”
I’m interested in how we break these intractable problems down, and how we decide on what is achievable and could make a catalytic difference. That’s what the EITI does. It is a slow process, but water dripping on a stone over time does have an impact.
Philanthropy at its best is entrepreneurial, innovative, and risk-taking in its quest to make a difference.
The New Zealand value system does not tolerate corruption — ever. We are shocked and appalled if there is an elected official or public servant who gets rich from what should be public money or service. There is zero tolerance for that. We expect our politicians and officials to be honest.
Eliminating corruption also requires putting mechanisms in place that promote transparency and accountability. New Zealand has established strong institutions, such as its Office of the Auditor-General and its ombudsman system. These are important for building trust and confidence in governance.
If the pandemic has taught organizations anything, it is that they must adapt or die.
The pandemic’s impact on the EITI and on the energy sector was quite profound. With lower amounts of fossil fuels being consumed, countries that depend on revenue flows from fossil fuels were in very challenging positions.
COVID-19 has provided us with a window on the future, into a world where less fossil fuel is used. The shock to fossil fuel revenues may create a sense of urgency in thinking about how an economy can survive without those revenues as the energy transition gains traction.
The EITI has collected a tremendous amount of data relevant to the energy transition. We believe that it can be useful in understanding how the energy transition will affect countries, and in giving insights into how they might prepare.
Forecasts from the Energy Transitions Commission indicate that as global reliance on oil falls, production could be sourced almost entirely from major producers in the Middle East. That means that late entrants to the sector and other providers are unlikely to see ongoing large returns from it.
Thus, governments need to consider whether it makes sense to sink their own resources into developing this sector, when it could become a stranded asset.
The oil companies are well aware that the energy transition is underway, but not every government in an oil producing country is factoring that into their planning sufficiently yet.To help governments navigate and plan for this transition, access to good data to guide decision-making processes is very important. The EITI has developed sophisticated processes to provide relevant information for policymakers.
There have been limited opportunities for women in these sectors, and they do need to be more inclusive of women.
Even well-run operations have an impact on surrounding communities. Good social and environmental standards and corporate social responsibility are extremely important. When an encampment of mainly men, living away from home, moves into an area, that has obvious implications for the community. You might see an increase in the transmission of HIV/AIDS and other sexually transmitted diseases,
and in the degradation of women.
There are responsible companies endeavoring to operate in poorly governed geographies, but it isn’t easy. They come under significant pressure. They do not have the power to change the governance system under which they are operating, although they can do much good by upholding their own and sector-wide standards.
In 2019, the EITI Standard introduced requirements for countries to track female employment and to consider potential disparities in access by women to information on the extractive sector. Alongside these requirements, EITI multi-stakeholder groups, as sector oversight bodies, need to consider their own gender balance. Applying these aspects of the EITI Standard will help countries make progress toward sharing the benefits of the sector more equitably.
Ultimately, philanthropists and foundations want the sum of the work they do to be greater than its parts. The initiatives they support therefore should not just be a series of projects but should add up to more than that. Philanthropy at its best is entrepreneurial, innovative, and risk-taking in its quest to make a difference.
One powerful way for philanthropists to achieve added impact is to make links between their work and the big global agendas, such as the Paris Climate Agreement, the Sustainable Development Goals and the EITI Standard. Why? Because it connects their work to global movements and to partners who can collaborate on catalytic work.
There are leaders around the world who want to make a difference for the better. Let’s keep in mind that countries don’t have to join the EITI, but many do join because they want to improve extractive sector governance.
When the EITI was founded in 2003, its focus was on transparency as a vehicle for tackling corruption. Yet while transparency is vital to preventing and exposing corruption, on its own it is not enough.
Based on that insight, the EITI is now working to make its anti-corruption focus more explicit.
A new initiative supported by the BHP Foundation seeks to advance beneficial ownership disclosure. In Colombia, the EITI is looking at how to identify red flags for corruption. In Mongolia, it is looking at how to reduce corruption risks in the mining sector.
This work gives me hope. It shows that by breaking down complex problems and being clear about our objectives, we can make a difference. It is essential that we make progress in the fight against corruption. Every corrupt deal that is struck reduces the resources available in the world’s poorest nations to meet their aspirations for sustainable development.
Guided by the belief that a country’s natural resources belong to its citizens, the EITI has established a global standard to promote the open and accountable management of oil, gas, and mineral resources. The EITI Standard requires the disclosure of information along the extractive industry value chain from the point of extraction, to how revenues make their way through the government, and how they benefit the public. By doing so, the EITI seeks to strengthen public and corporate governance and provide the data to reduce corruption and ensure all citizens benefit from their country’s natural wealth.