British PM David Cameron joins call for Europe to introduce mandatory financial reporting standards

Delivering a speech at Lagos during a state visit to Nigeria, British Prime Minister David Cameron joined the call for Europe to introduce mandatory financial reporting rules for extractive companies.

As he emphasized that ‘mineral wealth should be a blessing, not a curse’ the Prime Minister referred to US legislation which requires extractive companies to divulge financial information on a country-by-country and project-by-project basis, before calling on Europe to ‘do the same’. This US legislation – section 1504 of the Dodd-Frank Act – in fact celebrated its first year anniversary on 15 July 2011, though the SEC have yet to publish the exact rules for this provision. PWYP has called on the SEC to issue these as soon as possible.

By publicly calling for Europe to implement these measures, David Cameron added his voice to an already supportive British administration. In February 2011 Chancellor George Osborne and Secretary of State for Business, Vince Cable, committed to championing such legislation at the EU and several prominent politicians – including the Secretary of State for International Development Andrew Mitchell – have underlined the importance of transparency in the extractive sector. The British backing is, in turn, part of a wider movement as French President Nicolas Sarkozy, European Commissioner Barnier and European Commission President Barroso among others have all stated their intention to work towards introducing financial mandatory reporting standards for extractive industries.

Simply put, with these measures companies engaged in extractive activities would have to publish what they pay in the countries in which they operate. Citizens from resource-rich countries will be able to see – sometimes for the first time – what funds their government receives from extractive companies. This will help citizens hold their governments accountable and ensure that their natural resources benefit the whole population rather than the few.