Global Witness, at Ethical Corporation’s extractive industry sustainability conference today in London, says very significant new rules on transparency for extractive companies are coming in during 2012 in both the EU and USA.
Disclosure of payments to governments by extractive companies will be mandated in annual reports very soon.
Some extractive companies say in response they are concerned about the breaking of local laws on disclosure.
However studies by companies and academics, say Global Witness, which looked at laws in over 100 countries, says no such laws exist.
If exemptions are made, they argue, that will simply encourage governments to pass laws outlawing transparency efforts by companies.
Project level reporting is apparently key. Data on where money is going within countries is seriously lacking, says Global Witness.
For example: not a single state in the DRC has collected their full due amounts as yet because of a lack of clarity.
This has led to tensions and even ad hoc tax collecting.
Global Witness therefore argues that project based reporting is in the interests of companies.
There’s been lots of debate on these kinds of points, says Global Witness.
The arguments used to slow down the debate have been answered in full, they say, noting that the Financial Times agrees there will be no commercial disadvantage to firms.
The American Petroleum Institute is doing its best to slow down or gut the transparency aspects of the Frank-Dodd act.
GW says the perceived foot dragging by companies and their associations is damaging the image of the extractive sector overall.
Their view is that openness demands are going global and so holding back the tide is going to be impossible in the long term.
The challenge ahead for the industry is to take the lead on transparency for the sake of their own legitimacy.
The stage now seems set for serious change in 2012 as the EU Transparency Directive and elements of Frank-Dodd Act take hold.
How leading oil, gas, mining and other natural resource firms react may be hugely significant for a variety of reasons.
Reputation, political stability, global governance changes and economic development are all in play here.
For interested readers, a Google search alert on “revenue transparency” or “Extractive Industry Transparency Initiative” might be a useful way to keep track as events unfold.