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The initiative aims to make transparent the payments made by extracting companies to the governments of the countries that own mineral resources and is aimed at both the extractive companies and governments. The former are expected to make public the total and type of payments that are made to governments/state-owned companies; while governments are asked to ensure adequate accounting of oil revenues and the use to which they are put.

Eni, in addition to promoting the implementation of the initiative in the countries in which it operates where the local governments have already adhered to the EITI, is committed to playing, in cooperation with the Ministry of Foreign Affairs, a role as facilitator in those countries of relevant interest to the company where governments, while displaying interest in the initiative, have still not formally signed up to it.

Eni's commitment to transparency as a tool in governance is strengthened also by an interest in the Partnering Against Corruption Initiative (PACI) promoted by the Wold Economic Forum for the application of the Business Principles for Countering Bribery of Transparency International. Of note in this context, is the adhesion of Eni Oil do Brasil to the Zero Tolerance Initiative  (ZTI).

In Kazakhstan Eni disclosed the 2007 and 2008 data to an auditor company, in compliance with a procedure required for the drafting of the third EITI report. In Norway, Eni joined the multi-stakeholders group, which supervises the process, and cooperated in the drafting of the new EITI regulations and reporting templates. On January 21st 2010, Norway became the first OECD member State to publish a report on the payments received from oil companies within the EITI's frame. In Italy, the royalties received from the Government are published by the National Mining Office for Hydrocarbons and Geothermal Energy.

In East Timor, Eni contributed to drafting the first EITI report; it is a founding member of the multi-stakeholders working group, and was involved in the agreement aimed at creating reporting guidelines and templates, as provided by EITI.

In Nigeria, Eni participates in the implementation of the EITI by disclosing the information needed to carry out the audits for the reconciliation of the payments made to the Government by the industries of the extractive sector.

Payments made to governments who joined EITI

Royalties paid by Eni in Italy 2010

Paris, 2-3 March 2011
Speech of Phil Hemmens, Safety, Environment and Quality Senior Vice President, Exploration and Production Division - Eni

Mr Chairman, Your Excellencies, ladies and gentlemen.
Thank you for the invitation to address this meeting today.

Mr Claudio Descalzi the COO and Director General of eni's Exploration and Production Division is unfortunately unable to attend today, at short notice, but I am happy to represent him.

eni is a major integrated energy company, committed to growth in the activities of finding, producing, transporting, transforming and marketing oil and gas. eni operates in over 70 countries worldwide. Most of our activities are outside of Italy; particularly we have invested over € 14 billion in the last three years in Africa and in 2010 produced over one million barrels/day from the continent. (Compound Annual Growth Rate - CAGR 2007-2010 Africa + 2.8%)
I am also pleased to see that some of the Countries we work with in Asia are participating in EITI.

Because eni's investments are of such a substantial nature and involve investing and remaining in countries over many decades clear transparent rules both for finances and for dealing with communities, local authorities and governments are essential to make the business sustainable.

The theme of sustainable development has an historical importance for eni especially when you talk about relationships with host countries. This relationship was brought from a need for the company to compete in a consolidated and very competitive international oil market in the 1950s. Starting from eni's founder Enrico Mattei the concept of sustainability is an integral part of its culture.

For eni this means that as well as investing in its core business of oil & gas, it also invests in the local market, ensuring that part of its profits are used to develop the country. This is true transparency. eni invests extensively in social, health, educational and infrastructure projects. eni invests in local integrated energy projects such as gas power plants, electricity supply networks and other infrastructure to ensure the long term social economic development of its host countries. This has to be the new model: true transparency for international companies is to re-invest profits in local markets.

In this connection, eni has been a sponsor of transparency, reinforced by a strong internal ethics code.

Since eni operates in close contact with the local communities, where its core activities are carried out, it is convinced that development is not only an ethical duty of the producers and managers of wealth, but also essential for sustainable business.

In the extractive sector, where investments are hefty and require a long time to generate returns, political instability and social tensions are the real enemy. Transparency at National, Local and Community level shows what is being done, where, and at what cost. A society that understands a company's investment in their development is more likely to continuously support its presence.

Transparency makes us all more responsible: Governments, Oil Companies and Stakeholders alike! This is one reason why eni is an EITI member, and has been since the beginning. The involvement of civil society in the multi-stakeholder groups of EITI represents a guarantee for the achievement of the transparency of data and its dissemination.

eni in addition to promoting the implementation of EITI in compliant and candidate countries, also acts in a facilitator role, in cooperation with the Italian Ministry of Foreign Affairs, in those countries whose governments are not yet formal members, even though they have conveyed their interest in the initiative.

TIMOR LESTE (compliant country)
eni has contributed towards the drafting of the first EITI report in Timor Leste; it is a founding member of the multi-stakeholders working group, and was involved in the agreement aimed at creating reporting guidelines and templates, as provided by EITI. eni contributed to the resolution of the EITI reporting requirements, the community outreach programs in regional areas of Timor-Leste. Eni complied with the developed Indicator Assessment Tool and completed a Company Self-Assessment Form during the validation process.

NIGERIA
In Nigeria, eni participates in the implementation of the EITI by disclosing the information needed to carry out the audits for the reconciliation of the payments made to the Government by the industries of the extractive sector.

CONGO
In Congo, eni is part of the initiative's Executive Committee, jointly with the other oil partners, the civil society, and Government representatives. The final validation report has been submitted.

KAZAKHSTAN
In Kazakhstan eni is party to the MoU promoted by the Government of the Republic of Kazakhstan. In this country, Eni disclosed the 2007, 2008 and 2009 data to the auditor company in charge, in compliance with the procedure required for the drafting of the third, fourth and fifth EITI report.

NORWAY
In Norway, eni joined the multi-stakeholders group which supervises the process, and cooperated in the drafting of the new EITI regulations and reporting templates. As you know, Norway became the first OECD Member State to publish a report on the payments received from oil companies within the EITI's frame on 21st January 2010.

MOZAMBIQUE
Following the last EITI (ITIE) workshop, held in Beira on 14 October at the presence of the Vice Minister  of Mineral Resources, eni East Africa spa jointly with all major oil and mining companies operating in Mozambique, have been requested to provide by the 2nd week of November the EITI form to the ITIE National Coordinator (represented by the Director of Planning and Development of MIREM, Mr. Benjamin Chilenge), in order to be able to comply with the schedule set for the award of the final membership of Mozambique to the initiative (by May 2011). eni East Africa spa submitted the aforesaid form containing the payments made to the Mozambique government.

In Conclusion

Transparency of payments and receipts is just one aspect of transparency in the way we run business.

The new model must be that companies take the risk of re-investing profits into the local market to ensure the continuous socio economic development of host countries.
This new model means a cultural change, translating into a behaviour of true partnership between companies and host countries.