The Extractive Industries Transparency Initiative (EITI), an international coalition promoting better governance of resource-rich countries, has suspended Azerbaijan for failing to ease its crackdown on civil society groups.

Following years of scrutiny, and several warnings, the EITI decided Azerbaijan had failed to make progress on promises to reform laws shackling the country’s nongovernmental groups. Azerbaijan responded by cancelling its EITI membership.

Oil derricks are silhouetted against the rising sun on an oilfield in Baku, on January 24, 2013.

The EITI, a coalition of governments, companies, and nongovernmental groups, fosters open public debate about the use of oil, gas, and mining revenues. The EITI requires member governments to foster “an enabling environment for civil society” and to “refrain from actions which result in narrowing or restricting public debate in relation to implementation of the EITI.”

Azerbaijan once touted its achievements in the EITI as the first fully-compliant country in the initiative since 2009. But in the past few years, Azerbaijan has systematically dismantled the country’s once vibrant civil society through the arrests and convictions of many activists, human rights defenders, and journalists on bogus politically motivated charges, as well as by laws and regulations restricting the activities of independent groups and their ability to secure funding.

Recognizing that the government’s crackdown on independent groups ran contrary to its EITI commitments, the initiative downgraded Azerbaijan from a full member to a candidate country in April 2015. And in October 2016, EITI gave Azerbaijan four months to eliminate legal and bureaucratic obstacles inhibiting civil society engagement in the initiative.

Although in January 2017, Azerbaijan undertook some superficial regulatory changes, it failed to address fundamental issues, leading to its suspension.

The authorities have continued to repeatedly harass and jail activists who advocate for good governance and transparency. Earlier this month, Azerbaijan imprisoned one of the country’s most popular journalists, Mehman Huseynov, who exposed high-level government corruption.

Azerbaijan’s decision to quit the EITI is regrettable, but it underlines Baku’s lack of genuine commitment to the governance principles, especially regarding civil society, embodied in the EITI. The decision should also raise red flags for international financial institutions – World Bank, European Bank for Reconstruction and Development, European Investment Bank, Asia Development Bank, and others – which have publicly endorsed the EITI and committed to participation, transparency, and accountability.

In this environment of no effective public scrutiny, they should not fund projects benefiting Azerbaijan’s extractive industry or fund the government except for projects designed to directly address the urgent social and economic needs of the people. Otherwise, at best, they will be turning a blind eye to Azerbaijan’s crackdown. At worst they will be acquiescing to it.