The human rights group said Friday Ethiopia should be banned from becoming a member of the Extractive Industries Transparency Initiative - EITI.
HRW's senior business and human rights researcher, Lisa Misol, said Ethiopia's "harsh repression" of independent voices is "utterly incompatible" with the global effort to increase public oversight over government.
EITI was founded to strengthen governance by increasing transparency over revenues from the oil, gas and mining industries. It is expected to make a decision on Ethiopia's candidacy next week at a meeting in Oslo.
Ethiopia attempted to join the transparency group in 2010, but was rejected.
HRW said that membership bid was rebuffed because of concerns about what the rights group described as a "draconian" 2009 Ethiopian law, which is still in effect. HRW says the Proclamation on Charities and Society Law "sharply limits" the activities of independent groups.
Supporters of Ethiopia's EITI membership want the group's board to overturn its 2010 decision.
HRW's Misol say that move would be absurd. She said if Ethiopia is granted membership, it would be "a reward for Ethiopia's effort to dismantle and silence civil society, providing a perverse incentive for other governments to do the same thing."