Oil and mining transparency revolution continues across the Atlantic

By jforres

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Washington, DC – International relief and development organization Oxfam America applauds the European Parliament for following the US lead and voting in favor of European anti-corruption legislation, which would require oil, gas and mining companies as well as the logging industry to report what they pay to governments in countries where they do business.

The vote comes weeks after the United States implemented similar legislation, but in Europe the vote goes further by requiring both public and private companies to report their payments. Both laws require project by project reporting, do not allow exemptions and establish a payment threshold of €80,000 and $100,000. While the law has already gone into effect in the United States, the vote by the European Parliament’s Legal Affairs Committee (JURI) sends a strong signal for future negotiations between the Member States and the European Parliament to adopt a bold final law.

Ian Gary, senior policy manager with Oxfam’s oil, gas and mining program, said:

“The revolution for transparency in the oil, gas and mining industry is continuing across the Atlantic,” said Gary. “European Parliament’s action today coupled with the US law represents a real step forward in the fight against corruption and the resource curse in developing countries.

“Members of European Parliament and the United States have set bold examples by adopting positions that will champion the rights of the resource-rich poor by giving them project-specific information that will help them hold their governments to account,” said Gary. “Oil and mining companies should see this as an opportunity to push other countries to adopt similar legislation and work with civil society groups to ensure the transparency net is cast far and wide.”

Catherine Olier, Oxfam’s EU development expert, said:

“Members of the European Parliament have shown that they are serious about increasing transparency in all sectors by proposing to extend the legislation to the banking, construction and telecommunication industries. This boost in transparency is desperately needed to ensure that citizens of poor countries can finally start to benefit from the resources that have cursed them for so long.”

Notes to Editors

In 2008 Africa’s oil, gas and minerals exports were worth roughly 9 times the value of international aid to the continent ($393 billion vs $44 billion). And yet many countries have failed to turn natural resource wealth into lasting benefits.

• $300bn - $400bn: this is the amount of money from oil extraction that has been stolen or wasted over the last 50 years in Nigeria, according to Nigeria’s corruption agency.

• $86,000: this is all that the Democratic Republic of Congo’s treasury received from mineral rights in 2006, despite an estimated $1 bn of mineral exports each year.

• Only half of the mining companies paid corporate tax in Zambia in 2008
Source: Eurodad report “Exposing the lost billions”

Examples of how ‘country by country’ reporting would help address tax dodging:
• Swiss mining company Glencore operating in Zambia (Mopani Copper Mine), page 29
• UK brewery SABMiller, operating in Ghana, page 31

Oxfam welcomed the US Securities and Exchange Commission (SEC) for finally publishing the rules, under the Dodd-Frank Act, a few weeks ago. These rules will provide important information to investors and citizens and help stem corruption in resource-rich countries. Citizens will be able to use this information to hold their governments accountable. The new US law requires over 1,100 oil, gas and mining companies – including many European-based companies such as Shell, BP and Total – to report how much they are paying not only at the country level but for specific local projects.