At a press conference yesterday in Strasbourg, Commissioner Barnier unveiled proposed changes to EU transparency and accounting laws which will help local organisations in countries such as Zambia, the Democratic Republic of Congo, Cambodia and Peru. Under the proposals announced by the European Commission, companies listed on European stock exchanges which are active in the extractive or forestry industries and large non-listed EU companies from these sectors will be required to publish their payments to governments for each country where they operate.
This represents a significant breakthrough for the global Publish What You Pay campaign which CAFOD has been part for almost ten years. Many of the countries where our partner organisations work are rich in minerals, oil and natural gas but have been unable to convert these resources into development gains. In the DRC, Angola and Sudan mineral wealth has triggered or prolonged conflict.
The sums involved are huge. Research by Publish What You Pay Norway suggests that just ten global oil, gas and mining corporations generated together annual revenues of US $1,824 billion and made annual net profits of US$ 144.7 billion.
In July last year the United States adopted the Dodd-Frank Act requiring companies with extractive activities to report by country and by project. This increased the pressure on European governments to ensure that their corporate transparency and accountability requirements were at least as demanding. From April to July 2011 thousands of CAFOD supporters sent postcards to UK Chancellor George Osborne, pressing him to champion strong disclosure requirements for companies at EU level. Hundreds of activists took part in the Tea Time for change mass lobby of MPs on June 9th this year.
We welcome the proposals to give citizens of resource-rich countries access to data about what companies are paying for their oil, gas, minerals and forests. To reduce the risk of corrupt deals and increase accountability, the Commission has proposed a standard of reporting with a breakdown by both country and project. We are also pleased that the proposals address forestry as well as oil, gas and mining companies.
However there are potential loopholes in the current proposals which need to be addressed and definitions that require tightening up to make sure that the information actually reported is comprehensive and comparable.
Additional financial data that PWYP has requested is not included in the proposals. As well as reducing the risk of corruption and giving citizens the chance to hold their governments accountable, we also need to look at who is profiting. That is why CAFOD continues to champion full country-by-country reporting. This includes requiring companies to provide data on profits, sales, production levels and reserves, as well as payment information, which will allow citizens to work out if they are getting a good deal for their natural resources.
There is still a long way to go of course. These proposals have to go next to the European Parliament and the Council. As the draft law is discussed in the months ahead, it is vital that MEPs and Governments tighten up definitions, close potential loopholes and don’t allow industry interests to water down the value of the information companies have to report.
After years of campaigning, we are seeing results. As Cambodian partners have said, “This is important not only for us but for all resource-rich countries.”