Extractive Industries Transparency Initiative
Financial Impacts of Corruption
Corruption increases the political instability and inhibits the economic development of host countries. It feeds the frustration of local populations who gain no or little revenue from the exploitation of their resources, and who can see that companies are undermining the strength of their state structures. Finally, corruption decreases the social legitimacy of companies, which incidentally find themselves associated with the reprehensible practices of governments.
Corruption generates direct financial impacts. It increases market and capital access costs because of the risk premiums that companies must support to finance their activities in politically and economically fragile areas. In addition, it increases the risk of expropriation of enterprises.
What Is The EITI?
It is a multiparty, international and independent initiative that implemented the tools allowing companies, host countries and concerned stakeholders to discuss the best ways of disclosing the payments made and received for the exploitation of natural resources.
