Transparency's Witness (2013)

Transparency’s Witness Andrew Barry Pre-publication copy Published in Material Politics: Disputes along the Pipeline, Chichester: Wiley-Blackwell, 2013, 57-74 In his 1896 essay “The Secret and the Secret Society”, Georg Simmel noted the progressive openness of the state or, as he expressed it, "publicity's invasion of the affairs of state". This invasion had occurred to: "such an extent that, by now, governments officially publish facts without whose secrecy, prior to the nineteenth century, no regime seemed possible" (Simmel 1950: 336). Today, the question of the openness of the state has been framed in a particular way; for many the idea and practice of transparency has become critical for efforts to promote good governance. Transparency is a term, according to Christopher Hood, that has attained quasi-religious significance in debate over governance and institutional design: “Since the 1980s the word has appeared in the litanies of countless institutional-reform documents and mission statements… it is the pervasive jargon of business governance as well as that of governments and international bodies, and has been used almost to saturation point in all of those domains over the past decade” (Hood 2006: 3). Hood traces the demand for openness in government back to the work of Spinoza, Rousseau and Bentham. Bentham, in particular, drew an opposition between publicity and secrecy for “the best project prepared in darkness, would excite more alarm than the worst, under the auspicies of publicity” (Bentham 1839: 310). If the recent enthusiasm for transparency is simply the latest stage in a long evolutionary process, of ‘publicity’s invasion’, then what is new? Certainly, there is the prevalence of the term’s usage. Hood does not seek to explain why transparency (rather than, say, openness) has become a preferred term, but he does make an important observation: although the term has become pervasive it has also been promoted as a critical element in the recent development of transnational economic governance. In this respect, the oil economy is not unique in being subject to the claim that transparency might help address some of the difficulties and criticisms that it faces and the risks that it poses (Fisher 2010, Garsten and de Montoya 2008, Gupta 2008, Hajer 2009, Hood and Heald 2006, Jasanoff 2006b, Neyland 2007, 2011). The global finance industry has equally been a focus for calls for greater transparency (Best 2005, 2007), while national governments and international bodies such as the International Monetary Fund (IMF) and the World Trade Organization (WTO) have also sought to demonstrate that they are more transparent than before (Woods 2001, Larner 2009). But what is unique about the case of oil, I would suggest, is the stark contrast between the opacity of the way in which the multinational oil industry is said to have operated in the past, and the transparency of the manner that it is expected to act in the future. One feature of transparency is that it is applicable not just to the activities of governments but also to the operations of all organizations, including business. Moreover, according to its supporters, the progressive extension of the application of the principle should not be a threat to commerce, nor does it necessarily entail a restriction on commercial activity, or ‘the invasion’ of publicity into the world of business. On the contrary, the implementation of transparency is said to provide the basis on which the information necessary for the proper function of free markets would become readily available. In this way, the practice of transparency has acquired a series of functions and multiple meanings (Grossman et al 2008). First, transparency is expected to allow investors to make rational judgments concerning the strength of both commercial and public organizations, without having to gain access to insider knowledge. In these circumstances, transparency needs to be actively promoted. Indeed, “a generation of economists has shown that markets and deliberative processes do not automatically produce all the information people need to make informed choices concerning goods and services” (Fung et al 2007: 6). Secondly, the operation of the principle of transparency appears to establish a distinction between a domain within which more or less free markets exist and a domain external to their operation (Callon 1998b). In effect, the enactment of transparency is expected to establish a boundary between the legitimate domain of commerce and the market on the one hand, and the illegitimate territory of corruption and state crime on the other. Transparency is necessary if corruption is to be reduced, information is to flow more freely, organizations are to be held accountable, and free markets are to flourish. Thirdly, in so far as it is directed towards the activities of governments, transparency is thought to foster public accountability for “effective accountability requires mechanisms for steady and reliable information and communication between decision-makers and stakeholders” (Held and Koenig-Archibugi 2005: 3). It is not just a matter of making information public, but a matter of molding institutions into forms that are able to perform it (Power 1997, 2007a, Strathern 2000). Transparency is thus expected to foster the development of the kind of persons and institutions that are in a position to use and assess the credibility of any information that is published. The operation of transparency, thus, should lead not just to the production of information, but transformation in the identities and conduct of persons and organizations. It is, in short, a technique of governmentality, a device intended to “articulate actions: [to] act or [to] make others act” (Muniesa et al 2007: 2). Simmel's essay, however, points to two further key issues. One is indicated by his metaphor of invasion to describe the effect of openness on the state. In describing openness in these terms, Simmel complicates the terms of the opposition between transparency and secrecy, and tradition and innovation. For Simmel, it was not openness, but secrecy that was "mankind's greatest achievement". Increasing openness and increasing secrecy both demanded innovation, in opposition to a past in which neither concept had so much salience. Openness did not reduce secrecy, he argued, but intensified the demand for it. "Real secrecy", Simmel argued, only began historically with the development of greater openness. Yet, in his view, secrecy was valuable, while openness was not: "In comparison with the childish stage in which every conception is expressed at once, and every undertaking is accessible to the eyes of all, the secret produces an immense enlargement of life: numerous contents of life cannot emerge in the presence of full publicity" (Simmel 1950: 330). The development of practices of openness does not, therefore, reduce a given reservoir of secrets. Rather, it transforms the nature of what is kept secret, and what is valuable to keep secret and what is not. Moreover, the development of practices of openness coincides with the development of practices of secrecy. Indeed, this is not surprising. For when so much is out in the open, what is not acquires a new and arguably greater value (Strathern 2000: 310). Conversely, the growing prevalence of secrecy heightens the importance of openness, channeling attention towards objects that were invisible but subsequently come into public view (Taussig 1999: 56). Secondly, as Simmel observes, in a world of openness, it is not just openness but secrecy itself that has to be achieved. Secrecy may rely on the use of law, through technology (such as screens and firewalls), through economic control, through the deployment of cultural capital, or through the threat of violence. Just as transparency is associated with certain assemblages of persons and objects and devices (such as a free press, accounting procedures and disclosure requirements, public reports, debates and forums, etc.), promoted through the work of particular institutions, there also exist devices of secrecy. Simmel's essay points us towards an interest in the history of such devices and the interconnections between the histories of openness and secrecy. Like deviance for Foucault, corruption, bribery, illegality and so on are implicitly spoken about in practices of transparency, but often through their absence, or in the margins of texts (Foucault 1979). It would be a mistake, then, to assume that greater transparency simply leads to less secrecy, or vice versa. In what follows I make two sets of preliminary observations. The first is that the practice of transparency raises questions and may lead to passionate disputes not only about what is and what is not published, but about the processes by which public information is generated. As sociologists of scientific knowledge have shown, published scientific papers provide a very limited report of the messy processes of the research that they purport to describe (Collins 1985, Law 2004). In effect, they direct the reader away from what has been called the circumstances of their production (Latour and Woolgar 1986: 240, Latour 1987). The same can be said, as we shall see, of the kinds of reports produced in response to the demand for transparency. The exercise of transparency may lead to questions about how the information that is published has been produced or circulated (see Strathern 1991: xxii). Critics may try to uncover the truth about the process that has generated what has been made transparent, acting in the manner of critical sociologists of science. But in turn, those who attempt to uncover the truth that lies behind the façade of transparency may provoke questions about the lack of transparency of their own practices. This leads to the generation of further secrets. As Deleuze and Guattari observe, those who are expert in finding secrets tend themselves to act in secret: “From an anecdotal standpoint, the perception of the secret is the opposite of the secret, but from the standpoint of the concept it is part of it. What counts is the perception of the secret must necessarily be secret itself: the spy, the voyeur, the blackmailer, the author of anonymous letters are no less secretive than what they are in a position to disclose” (1987: 287). A second observation is that transparency points inevitably to the existence of a domain of activity about which it is thought that information has not yet been or might never be made public, whether intentionally or not (Simmel 1950, Stoler 2009: 3, Gross 2010). Gaps may become apparent between that which is rendered transparent and that which may or may not be widely known but which, it is believed, will never officially become public knowledge. Thus, instead of having the effect of reducing the finite quantity of matters that are not made public, the operations of transparency have the potential to highlight the existence of a vast range of matters that never will be made public (Barry 2006, McGoey 2007, 2009, MacIntosh and Quattrone 2010, Hetherington 2011), including matters that will not even be accessed by the most skilful social researchers (Quattrone 2006). Formal demands for transparency are therefore likely to co-exist with the circulation of rumours and ‘public secrets’ about matters that are not and may never officially become public knowledge, but which are nonetheless widely known (Taussig 1999). In the course of this research I was made privy to numerous such rumours and public secrets, some of which are probably true and many of which are probably not, but which cannot in either case be published. Whereas the information produced to meet the requirements of transparency is traceable, and therefore is expected to render institutions accountable, the origins of public secrets, as well as specific rumours, are indeterminate (Kwinter 2001: 126). The exercise of transparency does not reduce the importance of rumour, but rather gives it a new yet unacknowledged significance. If the virtues of the principle of transparency are widely diffused, the principle is thought to have particular relevance to the extractive industries in general, and the oil industry in particular. Why has the principle of transparency acquired so much significance in relation to the politics and economy of oil? According to many commentators, countries with abundant oil resources have often failed to achieve good or sustainable levels of economic growth (Auty 1993, 2005, Sachs and Warner 2001, Le Billon 2005). Indeed, given the ease with which wealth can be extracted through the production of oil, the governments of oil-rich states have often been able to maintain public acquiescence by increasing state expenditure to unsustainable and spectacular levels in the short term (Coronil 1997, Karl 1997, Bannon and Collier 2003). The possession of this valuable resource has therefore not generally led to broad-based economic development and the establishment of democracy, but has all too frequently been correlated with economic stagnation, state repression, an absence of democratic freedoms and civil war: “the link between natural resource abundance and the propensity for civil strife is now well established” (Auty 2005: 29; Collier and Hoeffler 2005, Humphreys et al 2007). This state of affairs is known as the ‘resource curse’. To be sure, the existence, prevalence and causes of the resource curse are all contested (Rosser 2006: 58, Ross 2001, Haber and Menaldo 2011). For some analysts, the presence of abundant natural resources such as oil leads to irrational behaviour, while for others it leads to what are claimed to be rational forms of economic behaviour such as corruption, looting, or the provision of financial support for coups d’états. According to some writers, an abundance of oil resources fosters foreign military intervention, while others stress how it may lead to rising political risks for foreign investors (Jensen and Johnston 2011) or is likely to weaken state institutions (Karl 1997). Yet whatever the causes and form of the resource curse, most commentators agree that the promotion of greater transparency provides a good way of beginning to address it (Collier and Hoeffler 2005: 632, Humphreys et al 2007, Swanson et al 2003, Le Billon 2005: 24). For if the oil economy can be become more transparent, it is argued, then two critically important and desirable developments will follow: it should prove easier to reduce the level of corruption; and civil society will possess the information required to hold the governments of oil-producing countries to account. In this context, transparency appears to function primarily as a ‘market device’ (Callon et al 2007). It is expected to make possible certain forms of economic calculation, while reducing the likelihood of those non-market forms of economic calculation associated with corruption and violence. The arguments of the economists of the resource curse have been influential as we shall see in the first part of the chapter. However, in the second part of this chapter I argue that, in relation to the extractive industries, the project of transparency – the Extractive Industries Transparency Initiative (EITI) – has been understood to be as much a practical experiment in normative political theory as in economics. The aim of those who promote the virtues of transparency is not just to address the lack of economic information, and to foster the development of a market economy, but also to address the lack of development of civil society. The operation of revenue transparency entails not just the development of literary devices (displays of revenue payments, for example), but also the presence of witnesses, the cultivation of forms of ethical conduct through seminars, guidebooks and forums, as well as the existence of appropriate institutions. At the same time, in relation to both cases, transparency takes the form of a public experiment (Schaffer 2005), in which the witnesses to the experiment are not just economists and political theorists, but also ‘civil society’, ‘stakeholders’, auditors, and the international community. In short, the development of transparency is expected to lead to the formation of a society and, in turn, this society will foster its progressive development in the future. Moreover, particular public experiments in transparency are intended as exemplars which can be subsequently imitated elsewhere. A global society, concerned with the issue of revenue transparency, is formed through the replication and adaptation of a local model (Tarde 2001 [1890], Latour 2005b, Barry 2006). In effect, transparency operates along the borders between economic and political life. On the one hand, the implementation of transparency is expected to affect a form of politicization of the economy that is measured, limited and rational. On the other hand, revenue transparency is intended to channel disagreements towards the specific question of economic calculation. A story that economists tell about natural resources – ‘the resource curse’ – is taken to have profound and wider implications for the public politics of knowledge. Although EITI represents a systematic attempt to render the oil economy more transparent, it cannot be taken as representative of the operation of transparency in the oil industry in general. For while the EITI has been directed towards quite specific, limited and technical issues, the transparency of the BTC pipeline turned out be much more wide-ranging and ambitious, involving a vast range of different experts and forms of knowledge production. Moreover, whereas the transnational experiment of revenue transparency occurred in under carefully controlled conditions, both in Azerbaijan and elsewhere, the transnational experiment in transparency associated with the BTC entailed the formation of a more complex and evolving series of political spaces, stretching across three countries, and along a route 1760km in length. Resource Curse In 2003 a team of economists from Columbia University visited the West African state of São Tomé e Príncipe (STP) in order to consider the impact of oil revenues on the economy.i This visit might seem surprising. After all, São Tomé, a small island state with approximately 160,000 inhabitants had yet, at this time, to receive any revenues from the production of oil. Indeed, following the exploration of offshore fields lying between STP and Nigeria, there was an expectation that oil production might begin as soon as 2012, or even 2010, but by 2007 this expectation had faded (Weszkalnys 2011). Gisa Weszkalnys has argued that, despite having no revenues from oil production, STP might be regarded as an exemplary oil state. Together with Nigeria, STP signed the Abuja declaration (2004), committing both countries to transparency in relation to the countries’ Joint Development Zone. On the advice of the Columbia University economists, the United Nations Development Programme (UNDP), the IMF and the World Bank, STP also adopted a Petroleum Management Law and a National Oil Account in order to invest oil revenues for future economic development. It had, in other words, anticipated the arrival of the oil economy and acted to prevent its potentially negative consequences. The transformation required was more than merely institutional. As Weszkalnys notes, “anticipatory activities have not stopped on the level of the state, the law or institutional reform. What is especially needed… is the creation of civil society and good governance, including a ‘change in mentality’” (Weszkalnys 2007: 3, see also Weszkalnys 2008). While STP has yet to receive any oil revenues, the Columbia University project made it clear that it could, in certain respects, become a model to be replicated elsewhere. As well as the Petroleum Management Law, the project led “to the design and execution of a National Forum, through which to inform citizens about the country's oil revenues and to solicit their views on how they might be spent”. The project also precipitated “the formulation of a plan of action for sustainable economic development” and the publication of a substantial volume (co-authored by, amongst others, the Nobel Prize winning economist, Joseph Stiglitz, and Jeffrey Sachs, Director of the Columbia University Earth Institute) which offered a theoretical and practical guide to other countries with substantial natural resource wealth. The book contained the Petroleum Management Law as a template for others to consider. Central to the claims made for the STP model was the idea of openness. The problem that STP could avoid was clear enough: “The central problem facing resource-rich countries may be easily stated: various individuals wish to divert as much of that endowment as possible for their own private benefit. Modern economic theory has analyzed the generic problem of inducing agents (here government officials) to act in the interests of those they are supposed to serve (the principals, here citizens more generally). Agency problems arise whenever information is imperfect, and hence there is a need to emphasize transparency, or improving the openness and availability of information in the attempt to control corruption.” (Humphreys et al 2007: 26) Although the idea of transparency is widespread, economic analyses of the so-called ‘resource curse’ (Auty 1993, Bannon and Collier 2003) have provided it with an influential justification. In this argument, countries possessing a wealth of non-renewable natural resources (typically associated with the oil, gas and mining industries) experience a series of problems that frequently lead to lower rates of growth than those occurring in countries with smaller endowments of natural resources. The Columbia University authors insisted, in particular, that the presence of such resources induced rent-seeking behaviour on the part of governments and elites. At best, this was likely to lead to a lack of investment and interest in other sectors of economic activity including, for example, agriculture and manufacturing, as well as public services such as health and education. It meant, furthermore, that states would be less reliant on taxation revenues and “when citizens are untaxed they sometimes have less information about state activities and, in turn, may demand less from nation states” (Humphrey et al 2007: 11). Moreover, rentseeking opportunities frequently lead to widespread corruption and, in many cases, violent conflict, as different groups or foreign governments seek to gain control over revenues. Given these opportunities, the conduct of a coup d’état, for example, can be understood as a form of rational economic action. Indeed, one of the Columbia authors identified no less than six distinct mechanisms leading to natural resource conflicts: the ‘greedy outsiders mechanism’, three variants of the ‘greedy rebels mechanism’, the ‘grievance mechanism’, the ‘feasibility mechanism’, and the ‘weak state mechanism’(Humphreys 2005: 533). The Columbia University project was not primarily an analysis of a specific example. Rather, it was a modest and practical intervention, based on the analysis of the resource curse, which formed an element of a much wider series of efforts, also involving the World Bank, intended to improve petroleum governance in STP. In the context of this analysis, the Columbia team had little to say about the colonial and post-colonial political history of STP: history remained outside the frame of economic analysis (Callon 1998b). Commenting on a coup d’état by army officers in July 2003, for example, Ricardo Soares de Oliveira notes that “most analysts gave exclusive coverage to the perceived linkage with the oil contracts (a view aided by the coup spokesman’s constant references to oil and social justice) and all but forgot the country’s coup-prone past and the older grievances of São-Tomean society” (Soares de Oliveira 2007: 239, Weszkalnys 2009). Indeed, recent discussions of STP focus almost exclusively on oil, failing to attend other aspects of political and economic life in the country, or the ways in which the notion of the resource curse itself intersects with draws upon “familiar ideas about, and instances of, illicit wealth, appropriations of state property, or simply seemingly self-perpetuating patterns of social inequality” (Weszkalnys 2011). In short, the strength of the Columbia approach did not derive from its attention to the specificity of STP and its history, but rather from its effort to transform the São Tomean economy into a particular example of a more general problem (the resource curse), and as a test site for a set of devices that were expected to reduce the level of resource conflicts not just in São Tome, but wherever they occurred. In effect, STP was conceived of as something of an ‘island laboratory’ (Greenhough 2006) for natural resource economics, an experimental site that would come to demonstrate the effectiveness of economic analysis in practice (Mitchell 2005: 297). Disclosure São Tomé is not an isolated case, however. It is one of 23 countries signed up to EITI, originally launched by British Prime Minister, Tony Blair, at the World Summit on sustainable development in Johannesburg in 2002. The initiative promoted transparency as central to the solution of the economic and political problems associated with the development of the oil, gas and mining industries in developing countries. Technically, EITI operates according to a principle of double disclosure: governments are expected to disclose what payments they receive from the extractive industries, and the extractive industries disclose what they pay to governments. These payments can be made through a variety of means. For example, EITI reports for Azerbaijan (one of the few countries to have submitted a full report) break down payments into the following categories: monetary inflow as government’s entitlement in foreign companies’ production stream; payments in kind (of both crude oil and gas) expressed in barrels of oil and cubic metres of gas; bonuses; transportation tariffs; acreage fees; royalties; profit taxes; other taxes, as well as taxes paid by local Azeri companies (Moore Stephens 2007). In practice, the payments made under each of these separate headings are aggregated. This means that nothing is recorded regarding payments to specific companies unless there is agreement from both the government and the companies concerned. Moreover, there is no indication as to whether payments in kind (of oil and gas) by companies to the Azerbaijan government resulted in any delivery of actual oil and gas. Published figures do not reveal whether the Azerbaijan government sold oil and gas back to the companies prior to delivery, resulting in an increased cash revenue payment. Moreover, if this were the case, the price paid by the oil companies to the government is not recorded (EITI 2012a). The demands of EITI are, therefore, very specific. They record one set of transactions in the circulation of natural resource revenues according to international accounting standards. They do not say anything either about the expenditure of such revenues by government or about NGOs funded directly or indirectly by the extractive industries. Nor do they record payments (in cash or in kind) along the oil production value chain such as payments to local subcontractors. Furthermore, while auditors provide an account of any discrepancy between the figures provided by governments and companies, this does not necessarily imply that all the figures are accurate or complete. If the aim is to reduce imperfections in the availability of information, then the reduction achieved is real but also quite modest. As a representation of the natural resource economy of a nation-state, the reports provided by the EITI process have been limited.ii Given this observation, a number of countries might stand out as exemplary in their transparency, or in the level of their aspirations to greater transparency in the future. One is Mongolia, which was said by an informant to have produced a particularly clear way of presenting information. Another is Timor-Leste, which has embraced the idea of revenue management as well as transparency.iii A third is Nigeria, which was the first country to “make reporting of payments by all extractive companies and revenues received by government legally binding under national legislation” (EITI 2012b: 2). The extension of the principle of transparency occurs both by enacting a general model and meeting the demands of validation, and also through the imitation and modification of exemplary cases. As we might also say in Tardean terms, invention, a process of political and economic invention in this case, occurs along a pathway of imitative modification (Tarde 2001 [1890], Barry and Thrift 2007). The narrowness and specificity of the Transparency Initiative suggests a number of responses. Harry West and Todd Sanders’, for example, have ventured that “in the globe’s constituent localities, key words such as transparency, conveying notions of trust, openness and fairness, must dance endlessly across the same terrain as vernacular key words expressing suspicion, hiddenness, and treachery” (West and Sanders 2003: 12). Certainly in Azerbaijan it is easy enough to hear stories of oil revenues actually spent by the government. ‘Public secrets’, which may or may not be true, are unsurprisingly common. Ethnographic studies of post-socialist societies have provided rich accounts of the multiple forms of corruption, networking and favours in post-Soviet economic life (Ledeneva 1998, Humphrey 2003). Historical and sociological studies of the Caucasus, in particular, have documented the failure of national governments to exercise control over local elites in Georgia and Azerbaijan during the Soviet era (Suny 1994). Georgi Derluguian argues that, following their appointment during the Soviet period, Heyder Aliev and Eduard Shevardnadze “realized that their primary aim had to be to placate Moscow while consolidating their local power base by appointing local clients” (Derluguian 2005: 201, cf. Hibou 2004). West and Sanders focus on the opposition and relation between transparency and suspicion (or openness and conspiracy). This is, however, only part of the story of transparency. Their essay concentrates on the production and circulation of rumour and suspicion, demonstrating in their words “how tenous, even illusive, trust is… in the midst of the turbulent transformations defining post-socialist societies” (West and Sanders 2003: 11). While this may be true in general, what is striking about the Transparency Initiative is not that its operation necessarily conceals anything, but that it is not expected to reveal much. It does not necessarily hide the truth, but leaves a huge amount unsaid. It allows a vast space of discretion: the realm of what one chooses not to know, does not investigate, or deliberately overlooks. On one occasion before traveling to the Caucasus, I met with some officials working for the Department for International Development in London. As I left the building one of them offered me some words of wisdom: you have to avoid listening to rumour. His advice is one working definition of how to exercise discretion, a necessary feature of transparency. But if transparency is rendered so specific in its focus, it is, therefore, also achievable. One official noted that the Azeribaijan government found little difficulty in signing up to the Transparency Initiative because the Oil Fundiv was already transparent and so did not require any substantial changes in the way in which it operated.v Since then, Azerbaijan, in conjunction with BP and other companies, has taken a leading role in the Transparency Initiative. It was the first country to be validated – and therefore publicly recognized – as transparent by the time of the biannual EITI conference at Doha in February 2009. According to a different assessment, the corruption perception index produced by Transparency International, Azerbaijan was 143rd in the same year (Transparency International 2009). It is quite possible that Azerbaijan, when its performance is assessed in different ways, can both lead the development of practices of transparency and yet, at the same time, not be transparent at all (cf Guliyev and Akhrarkhodjaeva 2009). Assembling Civil Society In any case, the primary issue for the Oil Fund was not how to produce an account of the payments received from international oil companies, which was easy enough, but how to produce the right kind of witnesses, including stakeholders, oil companies, DFID and NGOs who might accept these claims as true.vi This problem was also central to the preoccupations of EITI and its NGO supporters, including the Open Society Institute: “Accountability, transparency, and public oversight require the creation of checks and balances and a separation of powers among an array of institutions established to oversee the overflow of oil and natural gas revenues. They also demand input from civil society and the creation of a powerful sense of public ownership of the revenues… the chances for success of these funds would be improved by strengthening parliamentary oversight, improving budgetary transparency, and establishing independent citizens’ advisory councils to raise public awareness about and conduct monitoring of the countries’ oil and gas revenues.” (Caspian Revenue Watch 2003: 6, emphases added) Viewed in this way, what was central to the Transparency Initiative was not just the publication of information, but the progressive collection of persons who would be able to have input into, monitor and exercise oversight over the transparency process (see also World Bank 2008: 77-78. It implied the creation of a triangular relationship between government, the oil companies — both of whom published information — and NGOs who exercised oversight over what information was published. One Azeri NGO informant expressed the problem in terms of the need to create a space within which public discussion was possible and ‘information sharing’ could take place.vii The problem in Azerbaijan was that NGOs did not necessarily behave in this way. A few took oppositional positions, rejecting the existence of oil industry developments that were already in process. Other NGOs, conversely, were said to be more or less directly associated with the government (cf Wilson 2005). Some were cautious about what they said in public. A few sought to uncover, through their own investigations, what they believed to be the true story of the ways villagers had been deceived by the government, for example by changing land ownership records. Such investigations went far beyond the limited demands of the Transparency Initiative. The difficulty that those supporting the Initiative confronted was how to foster an appropriate form of critical engagement with the problem of how to measure and manage oil revenues rather than, for example, to confront the government directly. In effect, ‘civil society’ had to emerge in a form through which it could perform the specific role expected of it. Moreover, during this period, opposition to the Azerbaijan government was weak. Although reports from the Organisation for Security and Cooperation in Europe (OSCE) Election Observation Missions reported that elections in Azerbaijan failed to meet OSCE standards for democratic elections (OSCE 2003), Western observers argued that there was no credible alternative to the government of Heyder Aliev (see also Cheterian 2010). In Georgia, by contrast, accounts of electoral fraud in 2003 had played a critical role in the Rose Revolution that led to the fall of the Shevardnadze government (Mitchell 2009: 58-62, Companjen 2010).viii Unlike in Azerbaijan, Western governments considered Georgian civil society to be already sufficiently developed for a change of government to be possible. In these circumstances, the principle of transparency could be applied not just to the apparatus of oil revenue payments, as it was in Azerbaijan, but to the apparatus of elections (cf Coles 2004).ix The behaviour, freedom and capacity of civil society are considered critical to the success of the Transparency Initiative. In 2006 it was agreed that countries that had signed up to EITI would, in general, need to be ‘validated’ by 2010. To this end, what was termed ‘a validation grid’ was agreed upon, against which countries would be assessed. This grid set out eighteen validation criteria including, for example: #2 ‘has the government committed to work with civil society and companies on implementation’; #5 ‘has the government established a multi-stakeholder group to oversee EITI implementation’; #6 ‘is civil society engaged with this process’, #8 ‘did the government remove any obstacles to EITI implementation’, #13 ‘has the government ensured that government reports are based on audited accounts to international standards’ (EITI 2006). Each of these grid indicators was expanded on further so that, for example, ‘civil society groups involved in EITI should be operationally, and in policy terms, independent of government or the private sector’ (ibid.: 14). The ‘validation grid’ additionally addressed the need for ‘outreach by the multi-stakeholder group to wider civil society groups… including coalitions (e.g. a local Publish What You Pay Coalition), ‘informing them of the government’s commitment to implement EITI, and the central role of companies and civil society’. On the basis of these criteria, Azerbaijan was judged to have met the requirements for validation. However, the auditors noted that the government had not fully established a regular multi-stakeholder group (#5): “In taking a view regarding Azerbaijan’s compliance with this indicator, we have considered the wording of this IAT very carefully and considered the historical context of the EITI process in Azerbaijan. We believe that whilst Azerbaijan’s previous institutional structure for EITI implementation enabled the achievement of the EITI’s key objective, namely the regular publication of EITI reports without unexplained discrepancies, the formation of a permanent MSG will enable stronger multi stake holder engagement in overseeing the strategic development of the EITI in Azerbaijan” (Coffey 2009: A1-1). Three observations follow from this. First, the validation process makes clear that the Transparency Initiative is expected to be performative. It is intended to foster the creation of the kind of civil society or public sphere imagined by Western social and political theorists such as David Held and Mary Kaldor (e.g. Held and Koenig-Archibugi 2005). Writing on the Azerbaijan-Armenian conflict over Nagorno Karabakh, Kaldor argued that civil society and transparency provided the solution to the problem of conflict resolution: “[international organizations] could strengthen civil society to a much greater degree in the peace process so as to stimulate public discussion and mobilize greater public support” (Kaldor 2007: 179). A similar logic is embodied in EITI. It is a device intended to foster the formation of a civil society prepared to engage in public discussion. According to a high-level panel set up to advise BP on the development of Caspian oil, BP's transparency could have an "important and positive impact" on the "free exchange of ideas" in Georgia and Azerbaijan (BTC/CDAP 2003: 13). In this context, transparency turned out to be a political device as well as an economic one. Kaldor and Held’s notion of civil society derived not from natural resource economics but, at least in part, from relations with civil society organisations in Eastern Europe in the 1970s and 1980s and the theoretical resources of post-Frankfurt school critical theory (Habermas 1990). Secondly, although it is concerned with a wide set of issues such as civil society engagement, and the existence of government ‘obstacles’, the validation process addresses these issues in a particular way. Validation was conducted by auditors whose names were chosen by the Azerbaijan government from a list drawn up by the EITI secretariat and board, which did not include any Azerbaijani nationals. In this way, the validation process would not be contaminated by too much knowledge of local complexities, prejudices or conflicts of interest. In Azerbaijan I carried out research in conjunction with an anthropologist, Farideh Heyat, who already had conducted her own ethnographic fieldwork in Azerbaijan (Heyat 2002) as well as a number of interviews with NGOs interested in the development of the oil industry. In these circumstances, I immediately gathered the excess of detail that is typical of field work. Once, after a long interview with a member of an NGO, Heyat criticized me for not asking more probing and critical questions about the personal connections between the NGO and the Aliev government. For the anthropologist, what was external and hidden (the ‘realm of suspicion’ to use West and Sanders’ term) was of greater interest than what was in the open and merely presented to us. What was performed for our benefit pointed to the existence of social relations beneath (Strathern 2000). Our research highlighted the existence of things that were difficult to make public (Quattrone 2006). Thirdly, if the validation process has a quasi-Habermasian logic, seeking to forge a space within which rational debate concerning matters of public interest can occur, the existence of that space is confirmed in a particular, technical way. In conducting the validation process quickly and without substantial local knowledge, validation will leave much unknown, and therefore unreportable. Seen in this context, the audited accounts produced by the Transparency Initiative are arguably less important than the political assembly that needs to exist for these figures to be examined. The logic of the Transparency Initiative, for many of those associated with it, is that this political assembly or civil society forum will progressively learn to ask the right questions, gradually demanding more information about other matters beyond the narrow remit of EITI itself (concerning, for example, production sharing agreements, concessions, taxation, bonuses and so on). The technicality of the issues that civil society needs to be concerned with are important, partly because they are technicalities and civil society, if it is to properly function as such, needs to concern itself with technicalities (Schulz 2005). There is an echo here of an argument put forward by the late nineteenth-century French sociologist, Gabriel Tarde. In L’Opinion et la Foule, Tarde looks forward to the day when the public would read and digest social statistics rather than indulge in the highly contagious imitative and affective forms of behaviour characteristic of street demonstrations “ irresistibly drawn by a force with no counterbalance” (Tarde 2006 [1901]: 16). The Transparency Initiative embodies this political logic. It is expected to provide a technical solution to the management of affect, a preventative cure to the contagious forms of imitative behaviour that Tarde saw in the late nineteenth-century urban crowd (Salmon 2005, Toscano 2007, Borch 2012). Transparency, in effect, is a device intended to foster the formation of a rational civil society and a rational government, albeit in embryonic form. Conflict resolution between government and civil society is expected to occur not by opening up a potentially uncontrollable space of antangonism resulting in the kinds of violent clashes between police and demonstrators that have occurred on the streets of Baku, but by focusing protagonists on the mundane problem of how to generate and verify particular matters of fact (Shapin and Schaffer 1985). In effect, transparency both addresses an on-going political situation and is intended to contain and manage it in a particular form. Debate should begin, in this view, through the examination of particular and limited details, not with wider demands for social justice and the redistribution of wealth (Rancière 1998, 2006). The enactment of revenue transparency would not reveal that much in the short term, but it would be the basis, it was claimed, for a different political future. A Public Experiment Talk of the importance of transparency has certainly become pervasive, not least in relation to discussions of the extractive industries. Yet it would be a mistake to equate transparency, as Christopher Hood suggests, with an all-encompassing regime of surveillance (Hood 2006: 8-9). And Stephen Collier argues persuasively that the same could be said of neo-liberal economic reform programmes in the post-Soviet period: “The tools of the new economics of regulation were invented precisely as a new form of critical visibility through which intransigent things, embedded norms, and patterns of social provisioning could be brought into view, down to minute technical details, as the product of a prior governmentality that had to be rationalised. And this rationalisation is designed to take shape precisely through the selective and in some cases quite limited deployment of… microeconomic devices” (Collier 2011: 242, emphasis added). Collier’s observation could also be made about the principle of revenue transparency; indeed what is striking about the operation of EITI is that it appears to reveal rather little. Yet if we focus not on what the implementation of revenue transparency is expected to reveal but on what it is expected to perform or do, then this remark becomes less of a paradox. Three observations follow. First, it is important to recognize that the implementation of transparency in the extractive industries takes an evolving and experimental form. As an experiment, revenue transparency is intended not only to effect a progressive transformation in the world within which it is conducted, but also to persuade others that the results of this experiment are both true and valuable. It is precisely in its lack of transparency, as we have seen, that Azerbaijan has provided a particularly suitable location for the experimental application of transparency in practice. Secondly, and at the same time, oil turns out to be not just another industry whose operations can and should become transparent, but one that is perceived to be acutely in need of or receptive to transparency; for it is the lack of transparency of the oil economy that is thought by some economists to be at the root of the economic problems of many oil-producing states. Thirdly, transparency implies not only the publication of specific information but also the formation of a society, a public, that is in a position to recognize and to assess the value of – and if necessary to modify – the information that is made public. The operation of transparency is addressed to local as well as global witnesses, yet these local witnesses are expected to be properly assembled, and their presence validated. There is thus a circular relation between the constitution of political assemblies and accounts of the oil economy: one brings the other into being (Mitchell 2011). Extractive industry transparency is not just intended to make information public, but to govern the constitution of a public that is interested in being informed (see Chapter 5). While there has been a great deal of interest, especially on the part of economists, in the potential value of transparency as a solution to the problem of the resource curse, the significance of transparency for any account of the contemporary politics of oil is much wider than this. In part the progressively increasing desire for transparency has been driven by the conjunction of intersecting and competing demands made by international organisations, institutional investors (Clark and Hebb 2005) and multinational companies, as well as civil society organizations such as Revenue Watch and the Open Society Institute. In part it has been governed by the enactment of a growing range of national and international principles, conventions and regulations, as well as national legislation (Abbott and Snidal 2000, Agrawal 2005, Fairhead and Leach 2003, Djelic and Sahlin-Anderson 2006, Jessop 2008). A number of international agreements and principles that demand certain degrees of transparency have come to have special importance to the politics of oil. In addition to the EITI (2003), they include the Åarhus convention on public information disclosure (1998), the OECD guidelines on Multinational Enterprises (2000),x the Equator Principles (2003)xi and the UN declaration on the Rights of Indigenous Peoples (UN 2007). Moreover, projects supported by International Financial Institutions such as the World Bank and the European Bank for Reconstruction and Development (EBRD) are expected to conform to the operating principles and guidelines of these institutions, which also enshrine the principle of transparency. This evolving nexus of guidelines, principles, agreements, laws and codes of practice constitute an overlapping and uneven series that both modify and supplement existing national legislation, and that in practice may either contradict or complement each other.xii Having explored the operation of EITI in relation to the specific question of revenue transparency, from Chapter 5 onwards I turn to consider how the development of the BTC pipeline was subject to a much wider set of expectations for transparency. The contrast between the narrow range of information made public through the development EITI and the vast quantity of information made public in the period prior to and during the construction of the BTC pipeline was remarkable. The BTC pipeline, as we shall see, was to be materially invisible, but the invisibility of the pipe itself, following construction, coexisted with its informational visibility. Whereas the political experiment of revenue transparency took place under carefully controlled conditions in Azerbaijan, the political experiment of BTC was, in comparison, conducted across a more heterogeneous and less well regulated space, stretching across three countries. Before examining the transparency of the BTC project in greater detail in later chapters, I turn in Chapter 4 to consider a further dimension of its politics. This revolves around the broader concern, which flourished from the mid 1990s on, with the ethical conduct of the oil industry, and especially its social and environmental responsibility. I highlight, in particular, how social and environmental responsibility came to be understood during this period as something that had to be demonstrated in public in order to be guaranteed. At the same time, I contrast these performances with the work of radical critics who focused their attention on what they took to be specific instances of unethical or irresponsible conduct on the part of the industry, while expanding the politics onto a larger plane. http://www.earthinstitute.columbia.edu/cgsd/STP/ One response to this limitation is to gather more information and associate EITI with a wider range of interventions. This is the approach, termed ‘EITI++’ proposed by the World Bank. “[This] will provide governments with a slate of options including technical assistance and capacity building for improving the management of resource-related wealth for the benefit of the poor. Through technical assistance, EITI++ aims to improve the quality of contracts for countries, monitoring operations and the collection of taxes and royalties. It will also improve economic decisions on resource extraction, managing price volatility, and investing revenues i ii effectively for national development”. World Bank press release 2008/269/AFR, Washington 12 April 2008. iii http://eiti.org/TimorLeste (last accessed March 2013) That is, the fund set up to receive revenue payments. A substantial fraction of payments made by oil companies to the Azerbaijan government takes the form of tax, which is not recorded. v Interview, Baku, June 2004. vi Interview, Baku, June 2004 vii Interview, Baku, June 2004. viii For an account of the history of corruption and organised crime in Georgia during in the postSoviet period, see Kukhianidze (2009). ix Interviews and field notes, Tbilisi, March 2004, Baku, June 2004. x The guidelines contain numerous references to the need for transparency as a means of preventing corruption and bribery, for example: http://www.oecd.org/dataoecd/43/29/48004323.pdf xi The equator principles are described as, “A financial industry benchmark for determining, assessing and managing social and environmental risk in project financing”. Those institutions that adopt the principles, “recognise the importance of transparency with regard to the implementation of the Equator Principles (EPs)” http://www.equator-principles.com/ xii In principle, it would be possible to trace some of the negotiations and compromises that have led to this particular body of international agreements and laws— in other words, to demonstrate its relation to politics. Yet in practice firms, investors, international institutions and NGOs tend to treat this evolving regulatory constellation as the non-political foundation which governs, but does not determine, what should or should not be rendered transparent. Nonetheless, the provisional quality of such guidelines and laws means that the distinction between law and politics may be hard to sustain. In this respect, this body of law and soft law appears quite different from the specific case of administrative law analysed by Bruno Latour (2009). On the relation between legal and political disagreement, see Waldron (1999b). iv