Large Extractive Corporations Operating in Kazakhstan To Disclose Their Payments

The Dodd-Frank Wall Street Reform and Consumer Protection Act passed by the U.S. Senate on July 15, 2010 will now allow for Kazakhstani citizens to learn about the payments made by the large extractive corporations operating in the country.

The Act, signed by President Barack Obama on July 21, 2010, requires that the extractive corporations registered with the U.S. Securities and Exchange Commission will be obliged to publish information on the amount of taxes and other fees they have paid not only to the federal government of the United States but also to the governments of other countries where they operate. The relevant provision was added during the consultations on the reform of the U.S. financial sector. It is based on the Energy Security through Transparency Act (S. 1700), which was proposed to the U.S. Senate by a group of legislators led by Senators Benjamin Cardin and Richard Lugar. The Act obliges SEC to update its regulations by April 2011 to accommodate new requirements to resource extraction issuers.

Some large extractive corporations including ArcelorMittal, ENI, Sinopec, Repsol, Rio Tinto, Shell, Statoil, Total, ExxonMobil, Chevron and others operating in Kazakhstan are currently registered with the Securities and Exchange Commission. This means that through the SEC website (www.sec.gov) Kazakh citizens will have a chance to see the amounts of the individual payments made by these corporations in Kazakhstan.

“This is a great victory for the Publish What You Pay coalition, which our Foundation is a member of”, says Anna Alexandrova, the Chair of the Executive Council of Soros Foundation-Kazakhstan. “The adoption of this Act ensures that citizens of resource-rich countries can access information on extractive sector revenues. We hope that disaggregated reporting and its publication will be the next step towards greater revenue transparency in Kazakhstan as part of its engagement in the Extractive Industries Transparency Initiative (EITI) in Kazakhstan.”

Kazakhstan has been implementing EITI since 2005. To date, four reports covering the payments of several extractive corporations in Kazakhstan for the period between 2005 and 2008 have been published under the EITI.

Anton Artemyev, Director of Public Finance Transparency Program of Soros Foundation-Kazakhstan and a former member of the International EITI Board, notes: “In Kazakhstan, EITI reports are published without detailed information on the payments from each extractive company which significantly restricts the use of the information by citizens. The adoption of this law will allow the concerned parties to return to the issue of the need for providing company-by-company reporting.”

For more information please contact:
Anton Artemyev, Program Director, Public Finance Transparency Program, Soros Foundation-Kazakhstan
Mobile tel.: +7 777 230 22 84
E-mail: aartemyev@soros.kz

About the Public Finance Transparency Program of Soros Foundation-Kazakhstan
The Public Finance Transparency Program is a successor program of the Kazakhstan Revenue Watch (KRW) of Soros Foundation-Kazakhstan, which operated from 2004 to 2009, and the Budget Transparency and Public Accountability program. The two programs were merged into in 2010. Within the framework of the Program, comprehensive projects are implemented for the purpose of transparency and accountability improvement along the entire chain of generation and allocation of revenues of extractive industries: from contracts and subsurface use licenses to the budget expenses related to the implementation of socio-economic development programs. (For details please see www.soros.kz, www.budget.kz, www.krw.kz)