Abstract
The Extractive Industries Transparency Initiative (EITI) is a global standard that aims to improve governance quality in the extractive industries sector, particularly through enhanced transparency, participation and accountability. This article analyses to what extent and how the EITI improves governance quality and thereby addresses the environmental and social impacts from extractive industries in Indonesia, a country with pronounced conflicts over natural resources. Drawing on semi-structured interviews and analyses of EITI meeting minutes and reports, we conclude that the implementation of the EITI in Indonesia helped to strengthen civil society participation and empowerment to engage in extractive industry governance, both within and beyond the EITI-Indonesia multi-stakeholder group. The EITI falls short, however, in enhancing transparency and accountability due to important limitations in the information disclosure and misalignment between the country's decentralised governance of extractive industries and the EITI's national implementation. This also means that environmental and social impacts have not become subject to serious debates within the multi-stakeholder group. We lay out some broader policy and research implications and argue that both policymakers and scholars should look beyond the narrow scope of the EITI requirements and consider the EITI's success in light of its ability to foster wider governance reforms.
Highlights
Extractive industries are often considered the main cause of the resource curse: a situation whereby wealth in natural resources does not generate general welfare but instead coincides with poverty, inequality, violent conflicts, corruption and environmental degradation (Bruch et al, 2016; Casertano, 2013; Gilberthorpe and Papyrakis, 2015; Ross, 2015)
In addressing the question to what extent and how the Extractive Industries Transparency Initiative (EITI) addresses the negative impacts from extractive industries in Indonesia, we focus on three key aspects of governance quality that the EITI is expected to enhance: transparency, accountability and participation
This article analysed to what extent and how the EITI contributes to addressing the social and environmental impacts from extractive in dustries through enhanced governance quality in Indonesia
Summary
Extractive industries are often considered the main cause of the resource curse: a situation whereby wealth in natural resources does not generate general welfare but instead coincides with poverty, inequality, violent conflicts, corruption and environmental degradation (Bruch et al, 2016; Casertano, 2013; Gilberthorpe and Papyrakis, 2015; Ross, 2015). This article contributes to the above debate by analysing to what extent and how the EITI has improved governance quality and helped reduce the environmental and social impacts from extractive industries. As we show in this article, a focus on the EITI’s effects on (the interlinkages between) different governance aspects is crucial in understanding the opportunities and limitations for the EITI to address the environmental and social impacts from extractive industries and thereby tackle some of the key aspects of the resource curse that are often left understudied.
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