Letter to The Financial Times

Sir, The Prime Minister’s leadership of a worldwide initiative to improve transparency of revenue payments by oil, gas and mining companies to governments is to be welcomed. The government is right to recognise that accountability for revenue flows is central to poverty reduction in resource rich developing countries. CAFOD, as a member of the Publish What You Pay coalition, is very pleased to be a signatory to the WSSD Joint Statement on Transparency of Payments Initiative for the Extractives Industry. We are committed to working with the other signatories to deliver public disclosure of revenue information and to promote democratic debate over the management of resource revenues.

Experience shows that voluntary solutions to the problem of revenue transparency will fail: BP’s attempt at voluntary transparency in Angola was immediately doomed by vested interests there threatening retaliation. Consequently, we believe that a regulatory framework must be put in place. Natural resources companies should be required by rules for listing on regulated markets, such as the London Stock Exchange, to disclose revenue payments to national governments. The existing additional rules for natural resources companies in Chapter 19 of the UK Listing Rules offer an obvious location for such a requirement. CAFOD urges the government to consider this proposal with the UK Listing Authority and to press for the inclusion of a requirement for disclosure of revenue payments in European securities law.

Mr Blair has the opportunity to improve the lives of millions of the world’s poorest people through this initiative. I hope that, by focussing on a regulatory approach to transparency, he will give it the chance to succeed.

Yours sincerely,

Julian Filochowski
Director
Catholic Agency for Overseas Development (CAFOD)