International ambivalence around Azerbaijan’s EITI snafu

If Azerbaijan can navigate a quiet way out of the EITI without attracting widespread international media attention – perhaps in the shadow of another major regional event – it will likely take it.

Two weeks after being subjected to

the first downgrade

in the Extractive Industry Transparency Initiative’s (EITI) decade-plus history, Azerbaijani representatives are publicly

threatening to quit

the initiative. The dispute is straightforward, a rarity in the commonly byzantine world of multilateral international diplomacy. In short, the EITI – a voluntary organization whose member states commit to strengthening transparency and accountability in the extractive industries, and of which Azerbaijan is a founding member – require its members to involve civil society actors in the transparency-building process. Azerbaijan would rather not, and if possible, would rather see those actors in jail or in exile.

Perhaps the most remarkable part of this story is that it took the EITI so long to act. Despite its claims to the contrary, Azerbaijan has spent the last decade submitting

the weakest reports

of any EITI member. It has hung on this long by virtue of the initiative’s gradualist approach to promoting industry transparency: the initiative works to provide an environment conducive for the development of incremental reforms, as opposed to “naming and shaming” practices advocated by more activist organizations.

In the last two years, human rights and transparency watchdogs have begun to lose patience with the EITI’s approach and Azerbaijan’s intransigence. Global Witness

noticed serious discrepancies

in Azerbaijan’s EITI reporting in late 2013.

SOCAR’s response

neglected to address the report’s findings, and instead accused the environmentalist NGO, bizarrely, of seeking to “portray in a negative way and with envy the increasing influence of SOCAR”. Human Rights Watch has been

calling for Azerbaijan’s suspension

over human rights issues since the government began systematically freezing bank accounts and intimidating the initiative’s civil society partners.

Azerbaijan has one year to reverse the downgrade and regain full membership. In punishing Azerbaijan over its treatment of civil society rather than its opaque finances, the EITI has given the government an easy road back. The initiative is signaling its willingness to tolerate the shady accounting reported by Global Witness if Azerbaijan relaxes its crackdown on civil society.

International Ambivalence

However, in the

validation report

that recommended Azerbaijan’s downgrade, the EITI avoided setting specific milestones for reinstatement. This ambivalence may have stemmed from earlier implicit Azerbaijani threats to leave the initiative of its own volition. From the validation report:

AzEITI is in a somewhat precarious position at present. Government officials caution for instance that should AzEITI not be judged by the International Board as compliant through this validation process, the Government may pull out of the initiative.

On the issue of civil society finance and registration, the report had this to say (emphasis added):

This issue is complicated. The civil society view is that project funding for standard EITI activities has been stalled and accounts frozen and that

an absence of law means that registration of the NGO coalition is not possible

. Meanwhile, the GoAZ perspective is that civil society organisations are simply going through the growing pains of internationally standard levels of regulations and that frozen accounts are due to investigations of fraud and corruption, rather than related to specific types of activity.

The GoAZ also is keen to point out that there are no barriers to registering the coalition

, and that organisations known to be associated with political opponents are nonetheless funded through the Council on State Support to NGOs.

The report does not state why, if no barriers to registration exist, the government of Azerbaijan refuses to register the coalition. The government’s claim that no barriers exist is disputed by the

International Center for Non-Profit Law

, the

Council of Europe

, and

Amnesty International


Who Needs Who?

The most relevant question today is, does the EITI need Azerbaijan more than Azerbaijan needs the EITI? For Azerbaijan, EITI membership is just a


of many

symbols of international prestige, and one that, until recently, one that demanded very few concessions to maintain. If Azerbaijan can navigate a quiet way out of the EITI without attracting widespread international media attention – perhaps in the shadow of another major regional event – it will likely take it. There is little embarrassment in not being an EITI member, but being the first to make a less-than-graceful exit is another matter entirely.

For the EITI, Azerbaijan’s authoritarian drift is the first real test for its hypothesis that undemocratic countries can be enticed to adopt international standards of transparency through transnational initiatives. If Azerbaijan leaves the EITI without serious consequence, there will be little motivation for other noncompliant EITI members to undertake serious reforms to retain membership.

The EITI has always portrayed its cause as one of transparency and accountability separate from human rights. In a response to a lengthy

2013 Human Rights Watch report

that argued for an increased role for human rights considerations in EITI standards, the initiative’s Secretariat had

this to say


To say “In short, transparency can be transformative in an environment where fundamental freedoms are respected because the combination of the two is what provides for accountability.” takes the argument a bit far. It implies that transparency will only lead to change in “free countries”. Transparency can still contribute to change in countries with relatively poor HR record.

In Azerbaijan’s case, over a decade of EITI  membership has not led to increased transparency, accountability, or respect for human rights. Instead of working towards a rapprochement, state media have been accusing NGOs of participating in a

worldwide anti-Azerbaijan conspiracy

directed by the US State Department. The question is fast becoming not whether Azerbaijan will leave the EITI, but when, and on whose terms.

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