UK backs tough oil, gas anti-corruption law

Source: Reuters
Date: 11 Oct 2021

Britain will support tough legislation for energy, mining and forestry companies to declare payments made to governments for extracting natural resources - strengthening prospects Europe will adopt rules at least as rigorous as those in the United States.

Deputy Prime Minister Nick Clegg said on Thursday that his government supports strict new rules as a way to combat corruption in resource-rich countries plagued by poverty. A day earlier France also signalled it favours tough rules.

"Shining a light on where this money is actually going will help people hold their governments to account over how this money is actually spent," Clegg said after meeting on the issue with Bono, the pop star and campaigner against poverty in developing countries.

"The best way to minimise the impact on business, while simultaneously increasing transparency and cracking down on corruption, is to ensure that the EU introduces rules similar to the high standards already introduced by the U.S.," Clegg said.

Championed by humanitarian organizations, the rules aim to combat bribery by companies and kleptocratic leaders from bleeding countries of their wealth. But industry groups have argued the rules are far too costly and would give rivals sensitive business information.

EU leaders are due to take up the issue next month. An European parliamentary committee in September has adopted legislation that would require companies to file detailed reports to regulatory authorities on what they pay for natural resource contracts.

Every project valued at 80,000 euros $105,100 (65,511 pounds) or more, almost the same as the U.S. threshold of $100,000, would have to be disclosed. But some resource firms have said project-by-project reports would be too onerous, and they have lobbied for a minimum reporting threshold of million dollars.

Meanwhile, they are contesting the U.S. rules.

The American Petroleum Institute, the U.S. Chamber of Commerce and two other business groups this week filed suits against the Securities and Exchange Commission, alleging its rules adopted in August misinterpreted the mandate from Congress and failed to properly weigh the costs and benefits.

Clegg said that the impact on business would be lessened if Europe and the United States adopted similar requirements.

Publish What You Pay, an activist group campaigning for disclosure, hailed the U.K. government's decision.

"Project by project reporting is vital as it is the only way that communities which are affected by natural resource extraction can track their entitlements and hold their own governments to account for the use of revenues," said Joseph Williams, its senior advocacy officer.

"A low disclosure threshold and no exemptions would mean that key information for citizens around the world will no longer be hidden from view and can empower those citizens to demand accountability over the exploitation of their own natural resources," he said.

France on Wednesday said that it "actively supports adoption of an ambitious European directive." The United Kingdom and France are home to the largest European extractive industry companies. Germany however has said it favours a less rigorous rule whereby companies could file one report per country, rather than on each project.

By Stella Dawson