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Publish What You Pay, the global civil society coalition working for transparency and accountability in the world’s extractive industries, welcomed today’s historic plenary vote in the European Parliament in favour of new EU Transparency and Accounting Directives. The coalition also welcomed Canada’s announcement that it will establish new mandatory reporting standards for Canadian extractive companies.
The MEPs’ vote creates a binding legal requirement for EU-listed and large privately owned oil, gas, mining and logging companies to publish – country by country and project by project – all payments over €100,000 to governments wherever they operate. This follows agreement between the European Parliament, Member States and Commission after months of negotiations, and brings the EU finally into line with similar extractive industry transparency rules that take effect this year in the US under the 2010 Dodd-Frank Act.
Responding to the European Parliament vote and the Canadian government announcement, Marinke van Riet, Publish What You Pay International Director, said: “Civil society applauds the European Parliament for its commitment to enabling citizens in resource-rich countries developing to hold governments and companies accountable for the revenues generated by oil, gas and mining extraction. Extractive sector transparency is essential to ensure that non-renewable natural resources are a blessing rather than a curse. We especially appreciate the efforts of those MEPs who have championed this European legislation and worked so hard to bring it to fruition.”
Together, the EU and US laws mark the establishment of a new mandatory global transparency standard for the extractive industries. They cover 65 per cent of the value of the global extractives market, including most international oil, gas and mining majors, as well as Chinese, Russian, Brazilian and other state-owned companies, and complement and strengthen the voluntary Extractive Industries Transparency Initiative (EITI) set up in 2002.
African campaigners also welcomed the European Parliament vote. Marc Ona, Executive Secretary of Brainforest-Gabon and Coordinator of Publiez Ce Que Vous Payez Gabon, said: "The EU rules will make public the information necessary for us to hold our governments to account, so that revenues from our natural resources benefit the whole population in the fight against poverty."
The EU Directives have won support from political groupings across the European Parliament, including ALDE, the EPP, the Greens, and the Socialists & Democrats. Publish What You Pay was keen to recognise the contribution of Arlene McCarthy MEP, whose work on two parliamentary committees had been crucial to securing Parliament support.
Arlene McCarthy MEP commented: "This tough new law will be a major weapon in the global fight against corruption. After working closely with NGOs and the umbrella group Publish What You Pay, we now have an agreement that shows how effective cooperation between legislators, citizens and action groups can deliver real change for communities in countries that are rich in natural resources but whose citizens are trapped in poverty."
The EU vote comes after more than a decade of campaigning by Publish What You Pay. The coalition now wants to see prompt implementation of the Directives by EU Member States to match reporting required under Section 1504 of the US Dodd-Frank Act for all US and foreign companies reporting to the US securities regulator, the Securities and Exchange Commission. The first reports required under US law will be publicly available in 2014.
“Natural resource revenues have transformative potential for countries around the world, but too often these revenues have not been disclosed and have been diverted or wasted,” said Ian Gary of Oxfam America, who represents North America and the EU on Publish What You Pay’s Global Steering Committee. “The fact that both the US and now the EU require oil, gas and mining companies to publish what they pay is a landmark victory in our campaign for natural resource transparency. This information coupled with more information on extractive deals and government budgets will give citizens a fighting chance to hold their governments to account. Resource-rich governments must respect the rights of citizens and groups to use this information in practice.”
Grégoire Niaudet of Publiez Ce Que Vous Payez France added: “It is essential to broaden the scope of transparency to ensure that the amounts received by governments are consistent with what the extractive companies should have paid. This requires contract transparency and an extension of transparency to tax havens into which companies often divert profits to minimise their tax obligations. The EU has agreed to extend country-by-country reporting to banks, and further extension to other sectors such as construction, transport and telecommunications is also essential. We currently have a major opportunity to achieve this, with politicians very aware of the costs to society of companies’ tax evasion and aggressive tax avoidance.”
Note to editors:
EU Member States are required to transpose the EU Transparency and Accounting Directives into domestic law within two years of their entry into force, following the Directives’ publication in the Official Journal of the European Union.
European Parliament vote result: http://www.europarl.europa.eu/sed/votingResults.do
EU process and documents:
Transparency Directive: http://www.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2011/0307%28COD%29&l=en
Press conference 12 June 2013 at 14:00 CET, following the European Parliament vote:
http://www.europarl.europa.eu/ep-live/en/other-events/ (after event)