Ghana: Public Agenda's Editor Addresses EU Parliament

Source: All Africa
Date: 2 May 2022

The Acting Editor of Public Agenda, Dr Steve Manteaw on Thursday, addressed the Legal Affairs Committee of the European Parliament as industry lobby moved to water-down draft EU legislation on Transparency and Accountability in the operations of extractive sector companies.

Sharing the platform with Alexander Woollcombe, Acting Director of the ONE Campaign office in Brussels, and industry barons, Dr. Manteaw argued fervently in favour of strong legislation. He provided the empirical basis for urging EU Parliamentarians to persist in their efforts at “making Country-by-Country, and Project-by-Project reporting the cornerstone of the intended legislation.

He asserted that, the constraints that citizens on the African continent face in accessing information that is critical to holding their governments accountable for the management of revenues from the extractive sector, provides a strong basis for international legislations such as being contemplated by the European Parliament.

The EU legislation will provide alternative, unrestricted source of information to citizens of natural resource dependent countries regarding the income and payments of companies on Country-by-Country and Project-by-Project basis, but European companies are unenthused about the initiative, arguing among others that their compliance with such rules will be costly for their operations and would render them uncompetitive. They also argue that Project-by-Project data will be of little or no use to anybody in the industry and should therefore be scrapped.

But Dr Manteaw disagrees. He told the Legal Affairs Committee that, Project-by-Project reporting is critical for informing the demands community people make in terms of their share of revenues. “Because most social tensions and conflicts around resource exploitation emerge from the local level, project level data will give community people a fair idea of how much revenue is generated from their communities, and guide them in their demand for equitable share of development;” he stressed.

On country-by-Country reporting, Dr. Manteaw argued that such data will be useful not only for holding governments to account but also for improving the quality of citizens’ engagement in the national budget processes.

Dr. Manteaw invited the Committee to reconsider the suggestion to include an exemption for governments that do not want their receipts disclosed pointing out that such suggestion is counter-productive to the whole purpose of the law. “Such exemption will set back progress on transparency in Africa…It would create a perverse incentive for opaque governments to pass new secrecy laws,” he posited.

Responding more directly to the concerns of industry in terms of the potential impacts of the legislation, Alexander Woollcombe pointed out that the additional costs that will arise as a result of complying with the new rules would be minimal. He argued that given that Shell’s global audit bill for 2009 was only 0.16% of pre-tax profits the additional accounting lines that might be introduced into its reporting as a result of the new legislation will not be damaging to its fortunes; and again, the Directive will not adversely affect European SMEs because these are exempted from reporting as per article 37(1) of the EC proposal.

On competitiveness, he indicated that he was not persuaded that the new rules would harm European companies. Citing an article in the Financial Times of April 24 2012, authored by the former Chief Executive of BP, Lord Browne, Mr Woollcombe explained that companies don’t lose business by being transparent, and also that the new rules will not force disclosure during negotiations, or before contracts are signed, a period Lord Browne considers most sensitive period for dealings between a company and a host government. The essence of the legislation, Mr Woolcombe argued, is to provide European investors with better information on the operations of extractive companies and to enable them to judge risks appropriately.

Growing wave of support

Meanwhile, several groups from across Europe and beyond have expressed support for strong EU legislation on Transparency and Accountability. A statement issued by a group of Bishops of the Catholic Church from Europe, Africa, Latin America, and supported by the International Alliance of Catholic Development Agencies, titled “We need transparency to fight corruption and tax dodging” said multinational companies deprive developing countries of nearly 125 billion Euros every year, and while initiatives such as the Extractive Industries Transparency Initiative (EITI) is a welcome step towards reversing the trend, progress has been modest because of its voluntary nature. The statement therefore called for the establishment of a more ambitious and binding rules to promote transparency of all stakeholders in the extractive sector and in all countries.

Another statement issued by Global Witness on Tuesday April 24, in the run-up to the Legal Affairs Committee Hearing, disclosed that the exemption clause in the Directives was introduced by the European Commission following pressure from industry lobbyists, who claimed that disclosing revenue information may violate laws in producer countries. Global Witness says it challenged industry to produce a credible example but so far, none have been forthcoming.

“Dictators and corrupt officials around the world will be cheering if the European Union gives in to pressure from oil and mining companies and allows exemptions to the EU’s transparency law,” said Simon Taylor, a Founding Director of Global Witness.

Publish What You Pay

Dr. Manteaw was invited by the Juri-Secretariat of the EU Parliament in his capacity as the current Chair of the Africa Steering Committee of Publish What You Pay (PWYP), to share his perspectives on the new directives and their ramifications for natural resource dependent countries in Africa.

PWYP is a global campaign for increased transparency and accountability in the generation and use of extractive industries revenues. The Campaign has been at the fore of the struggle to bring about fundamental changes in natural resource governance globally since the Global Witness report: “Crude Awakening” was published in 2002 and which gave cause to the Campaign. The Africa chapter brings together over 24 national coalitions.

The Legislative Process

There are two tracks to the European legislative process - the Council of Ministers where each of the 27 member states are represented, and the European Parliament where directly elected Members of the European Parliament sit. Each is considering the same proposal from the European Commission. Traditionally the Council takes a more conservative position on new legislation than the Parliament, but the two agree a compromise position in a process of ‘trialogue’.

In the Council, Denmark holds the Presidency and is chairing the discussions. There has been one meeting at ministerial level and several technical level meetings. At the first Ministers’ meeting a majority of countries supported the intent of the legislation but opposed key details in the European Commission’s October 2011 proposal, including project-by-project reporting and a proposal to lower the threshold for reporting. The Danes have presented a number of compromise texts and are seeking a consensus position in the Council by end of April.

Meanwhile, Parliament’s Legal Affairs Committee is considering possible amendments to the EC proposal, and Dr. Maneteaw’s submissions, along with those from the Brussels office of ONE, Shell, and Rio Tinto are crucial in firming up Parliament’s position on key clauses.

Alignment of interests to the issue on the table

United Kingdom: Leading politicians are on record to be in favour of the European legislation but behind the scenes, the U.K. has not been as strong as expected. The U.K. has proposed a new system of reporting payments that is likely to win the Council’s support, but does not result in payments being reported against individual projects. The U.K. blames ‘difficult politics’ in the Council for its new positioning.

France: One of only two countries to vote against the U.K.‘s new system on the grounds that it did not provide for project-by-project reporting. France continues to aim for ambitious legislation at the EU level and have also been pushing the issues in the G8 and G20 processes. President Sarkozy, in a letter to ONE, sent last week in response to the ONE VOTE campaign, explicitly says he wants the legislation to be more ambitious than what is currently being proposed and that France will use “all its weight” to convince other European countries to do same.

Germany: Instincts are to oppose the legislation. The Ministry of Justice is in the lead and has been influenced by the Ministry of Economics, which together with German industry fear that country-by-country reporting in the extractives is a stepping stone to the introduction of similar reporting requirements for other industries.

Denmark: The Danes have a progressive outlook on the proposal, but appear unable to be proactive and assertive enough from the chair. Denmark has co-opted the U.K. to try and find a compromise position.

All Africa