Momentum towards mandatory disclosure by companies is growing. Writing to development agencies last week, George Osborne affirmed his support for mandatory reporting requirements for oil, gas and mining companies.
The UK Chancellor wrote:
You may have seen that I called on the G20 Finance Ministers to support new international transparency requirements for extractive companies. I strongly believe it is in everyone’s interests that mining companies and others operate to the highest standards. That way we can ensure some of the world’s poorest benefit from the wealth that lies in the ground beneath them. The UK will actively support the introduction of binding disclosure regulations on the extractive industry at the EU level.
This position is clear and very encouraging. The next questions are timing and scope.
This week Henry Banyenzaki, Ugandan MP and Chair of the Parliamentary Forum on Oil and Gas wrote to Shell’s Peter Voser, responding to the Chief Executive’s comments at the EITI conference. Mr Banyenzaki highlighted why listing rules in the US and the EU requiring disclosure of payments on a country-by-country basis are vital if Uganda is to benefit from its recently discovered oil reserves:
Breaking down payments to the project level reduces the opportunities for corrupt accounting and gives local people a better understanding of the assets that exist in their communities. That’s why I am urging European leaders to act swiftly to implement their version of Dodd-Frank. Click here for the full letter
The French Government has already signalled that it wants to move quickly and the European Commission is currently developing proposals following its consultation on country-by-country reporting at the beginning of this year. That consultation has provided a useful opportunity to examine what “our version” of reporting requirements should look like – largely replicating the US legislation and or developing a more coherent approach to country-by-country disclosure which would include the very largest multi-national companies from other sectors as well as all listed extractive companies. Sustained political will from Member States will be key to ensuring that these important changes in EU transparency regulation are debated and adopted promptly.