Towards Transparency

‘Towards Transparency’ looks at what the industry and geographical scope of the ALP policy the impacts the introduction of this legislation would have for transparency and accountability in Australia and globally.

The report finds that of the 802 companies listed on the ASX who are involved in commercial production in the mining, oil, and gas sectors, 67 companies would be required to report under the proposed ALP mandatory disclosure law. Six of those 67 companies already report under a mandatory disclosure law, as they are listed on either the London Stock Exchange (LSX) or the Toronto Stock Exchange (TSX) leading to new disclosures from 61 companies; includes Australian incorporated companies such as Iluka Resources, Woodside Petroleum and Santos Limited, and overseas incorporated but ASX listed companies from major global extractive companies not currently reporting under any other jurisdictions mandatory disclosure law, including AngloGold Ashanti and MMG Limited.

The 67 publicly listed companies had a combined market capitalisation of approximately $320 Billion AUD as of May 2018. The companies captured operate in 43 countries and would cover payment information from approximately 150 separate projects. Australia is the most represented country with 49 companies reporting operations with new disclosure coming from 18 countries who currently have no EITI or mandatory disclosure laws where this level of disclosure would be the first of their kind by extractive industry companies.

Access the data set used here.

Read the media release here.

A transparent mining and oil industry is one step closer: Publish What You Pay Australia welcomes ALP commitment on mandatory disclosure

Publish What You Pay (PWYP) Australia, a coalition of Australian civil society organisations campaigning for greater transparency in the mining, oil, and gas sectors, welcomes the Australian Labor Party commitment, announced today, to introduce a mandatory reporting regime for the extractives sector.

Australia enjoys a strong and positive international reputation for mining expertise. However, our leadership and reputation are clearly lacking when it comes to transparency and accountability standards for the sector.

“This is an important step towards a transparent oil and mining sector in Australia, and brings us one step closer to meeting the global reporting standard. Australia’s position as a world leader in mining, oil and gas activities should be matched by reporting standards that make us a leader in the fight against corruption and mismanagement in the extractive sector.” said PWYP Australia’s National Coordinator Jessie Cato. “Labor’s announcement is a huge step for transparency and accountability in Australia, and one that is long overdue for the notoriously opaque extractive sector.”

Mandatory disclosure reporting under Labor will require large Australian mining, oil, and gas companies to report all their payments to governments related to extraction on a country-by-country and project-by-project basis. Similar laws are already in effect in Canada, Norway, and the European Union.

Australia does not currently have a project level reporting requirement. A recent report by PWYP Australia, ‘Abundant Resources, Absent Data’, found 717 ASX listed extracting companies present in 105 countries. Outside Australia, ASX listed extractive companies are concentrated on the African continent. However, there were massive differences in project figures found by PWYP Australia from company reports to the figures quoted by the Australian Government, which could not be reconciled by PWYP Australia due to poor data quality or absence of data.

“Australia’s data problem is blatantly obvious when trying to observe our mining, oil or gas activities domestically or abroad.” Said Ms Cato. “Mandatory reporting not only provides us with accurate, timely, and publicly accessible information on where our companies are operating, but it is at the project level that a community can properly establish whether they are getting a fair deal for the extraction of their natural resources.”

PWYP Australia believes that Australian policy can and should support the sustainable development of natural resources in the countries we operate in, and in Australia.

“A global transparency standard has emerged, providing Australia with a clear path forward to step up. PWYP Australia congratulate Labor on taking this first step.”

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IMMEDIATE RELEASE: October 31 2017
Contact: Jessie Cato, National Coordinator
Jessie.Cato@victas.uca.org.au 0499 479 293
Download the release here.

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About Publish What You Pay Australia
Publish What You Pay Australia is a coalition of humanitarian, faith-based, environmental, anti-corruption, research and union organisations campaigning for greater transparency and accountability in the extractive industries. PWYP Australia works with the global Publish What You Pay coalition, a network of over 700 member organisations in more than 42 countries around the world, united in their call for an open and accountable extractive sector, so that oil, gas and mining revenues improve the lives of women, men and youth in resource-rich countries, including through advocacy for the mandatory disclosure of all payments made between extractive industry companies and governments on a country-by-country and project-by-project basis.

The current members of Publish What You Pay Australia are: Action Aid Australia, Aid Watch, Australian Conservation Foundation , Australian Council for International Development, A Billion Little Stones, Burma Campaign Australia, Caritas Australia, Catholic Mission, ChildFund Australia, Columban Mission Institute, Conservation Council of Western Australia, CFMEU – Mining and Energy, CAER – Corporate Analysis. Enhanced Responsibility, Economists at Large, Friends of the Earth Australia, Global Poverty Project, Greenpeace Australia Pacific, Human Rights Law Centre, Jubilee Australia, Mineral Policy Institute, Oaktree Foundation, Oxfam Australia, Search Foundation, SJ Around The Bay, Tear Australia, Transparency International Australia, Union Aid Abroad – APHEDA, Uniting Church in Australia – Synod of Victoria and Tasmania and World Vision Australia.

Abundant Resources, Absent Data

Australian companies have a long history in extractives, particularly in the mining sector, both domestically and abroad. Australia’s global presence far exceeds its size and it is one of the leading extractive industry players globally, with over 700 Australian Stock Exchange (ASX) listed companies operating in more than 100 countries. Australia also enjoys a strong and positive international reputation for mining expertise and governance.

This report analyses publicly available data in an attempt to draw a comprehensive picture of Australia’s extractive presence – by company, country and project. It shows stakeholders a regional snapshot of what a mandatory disclosure law would cover in the Australian context and how this would enable citizens and governments to ensure that they are receiving a fair deal for the extraction of the natural resources. It also demonstrates how Australian policy can support the sustainable development of natural resources in the countries it operates in. Using data, it argues for the introduction of a mandatory disclosure law which would align Australia with the global reporting standard set by the 30 countries who have already implemented it.

A copy of the dataset which accompanies the report can accessed here

PWYP Australia proudly releases this report through the PWYP Data Extractors programme. It demonstrates how important open data is to increasing transparency in the extractives sector, building evidence based policy, and ensuring citizens and governments around the world are benefiting from the extraction of their natural resources.

Opening Australia’s extractive data for development

Tracking Australian mining, oil and gas companies around the world is challenging. Australia has one of the largest global footprints of extractives companies operating abroad. Research by Publish What You Pay (PWYP) Australia and ESG research house CAER in September 2016 found that the 22 Extractives Industries Companies on the ASX 200 had a presence in almost 50 countries. Trying to trace the payments between these companies and the governments of the countries in which they operate is difficult. But it could be done, and reasonably simply, if Australia introduced a mandatory disclosure reporting requirement that legally required ASX listed extractives companies to make public their payments to government in every country in which they operate.

Legislation for mandatory disclosure was introduced in 2013 in the EU, and 2014 in Canada. The reporting requirements in both Canada and the UK have been in effect coming up to one year, and have already shown payments of $150bn to governments of over 100 countries — including to countries recognised as suffering from the ‘resource curse’, and payments to countries where Industry opponents to this legislation challenged their legal ability to report, such as Qatar and China. Even with just a single year data set to work from, civil society is already making use of this information in multiple ways. Some have used it to show how the UK reports are providing a new standardised data source for oil prices, while others are using it for global advocacy.

A case study by PWYP UK used payment data released under the UK legislation from Royal Dutch Shell in Nigeria; BG Group (now part of Shell) and Petrofac in Tunisia; BP and Shell in Indonesia; and Shell and BP in Iraq. PWYP UK then created infographics for 3 countries and a data summary for the fourth which were then shared with the PWYP Coalitions in these countries for their advocacy. It demonstrates how this data can be used by local civil society in their efforts to keep their governments accountable, and the global collaboration this data facilitates.

Ideally, that should be where the discussion stops; that Australia legislates to empower communities where Australian companies operate, and increase fiscal accountability and transparency of Australian companies. Unfortunately, there exist more concerning reasons why Australia requires this legislation. The recent ICIJ report A Fatal Extraction highlighted the high number of deaths linked to Australian extractives companies or operations in Africa. We have seen numerous allegations of corruption and bribery in the sector featuring Australian companies or subsidiaries, and the legal but unethical fiscal deals and tax breaks between Australian companies and African Governments which result in countries losing millions. Mandatory disclosure legislation in Australia wouldn’t automatically solve every single one of these issues, but none of them can ever be sufficiently addressed without it.

Domestically, the recent Petroleum Rent Resources Tax (PRRT) inquiry is a result of civil society organisations finding limited public information, using freedom of information requests to obtain additional data and exposing the declining revenue while Australia is in the midst of an LNG export boom and on the verge of becoming the world’s largest exporter of LNG. Had Australia had a mandatory disclosure regime in place, it would have made this issue more readily identifiable by civil society and the Commonwealth, as the data would have been publicly accessible.

Even if we remove the ethical impetus, there is a strong business case for this legislation. Increased openness in company reporting makes good business sense, it increases social license to operate, makes investment more attractive and complements work towards the emerging global reporting standard. It’s why Canada’s peak mining body, the Mining Association of Canada, was an active advocate for, and has remained strongly supportive of this legislation, and also why Australia’s two largest extractive companies, BHP Billiton and Rio Tinto, who are captured by the UK legislation, also publicly state their support.

Of course, there are companies more comfortable in opacity. Introduction of this law domestically will create significant push back from some companies, and the influence and power of extractives industries globally or domestically is not underestimated by anyone. We only have to look to the US to see how the same specious arguments some industry members continually regurgitate to keep their payments overseas secret – arguments civil society and Industry supporters not only dispute, but have proven false – resulted in the equivalent US requirement, the Cardin-Lugar provision, having been vacated as one of President Trump’s first actions.

Australia announced its intention to join the Extractives Industries Transparency Initiative (EITI) in May 2016. EITI is a leading global initiative that aims to increase transparency in the extractives sector through a voluntary domestic reporting system. 51 countries are currently implementing the EITI. EITI is a great step towards transparency for Australia, and an overdue one for a country that has long been one of the initiative’s largest financial supporters. But for a country with the global presence as large as Australia, it’s not enough. EITI complements mandatory disclosure, but cannot replace it, a position that is supported by the EITI Secretariat. Nor can supporting the development of countries’ natural resources sector be achieved solely through our aid programme. It demands policy intervention and leadership from the Australian Government, and it needs the support of the Australian extractives industry. We cannot continue to claim we are world leaders in mining if we refuse to meet the emerging global standards and do nothing to address our role in the lack of fiscal transparency in the global extractives sector.

As Australia moves towards increasing openness through EITI and by joining the Open Government Partnership, the time is right to discuss a mandatory disclosure reporting regime. Australia has largely benefited enormously from its natural resources, and we have done so in a transparent environment fundamentally free of corruption; we owe it to other countries to allow them the same opportunity.

Jessie Cato is the National Coordinator for Publish What You Pay Australia.

Australia to move ahead with implementation of the EITI standard

Since becoming PWYP Australia’s National Coordinator almost a year ago, I have been frequently been asked ‘What on earth is happening in Australia?’ It’s a fair question for many of my overseas colleagues; in fact it’s a question that has been echoed by many Australians. In just five years we’ve had four Prime Ministers, numerous ministerial reshuffles, and a policy agenda that at best could be described as ‘variable.’ So it is with great pleasure that I can write this post as it’s has been a long time coming.

Australia first committed to pursuing implementation of the EITI standard in 2011, when a pilot of the program was announced by the then Labor Government. Foreign Minister Kevin Rudd (former Prime Minister) at the time of the announcement stated “Given Australia’s very significant mining sector, we hope this decision will encourage other countries to adopt EITI.” Australia is a long-time advocate for the EITI. Our government has always been proud to trumpet that we are one of the largest financial donors to the EITI program, contributing as much as $18.45 million AUD between 2006 and 2015, and that our commitment extended to hosting the 2013 EITI Global Conference in Sydney. We have a history of strong support for the EITI, just not always within our own borders.

To deliver on its EITI commitment, a Multi Stakeholder Group (MSG) was established, as per the EITI protocol, and the pilot went ahead in three Australian States, with those, the Australian Government and eight extractives industries companies agreeing to report. The pilot ran until 2014 and in May 2015 the MSG released its report to Government, with the recommendation that Australia to move ahead with implementation.
To get back to the question asked of me so often then, what happened? Well, politics happened. The continual changes in leadership meant that the political will to progress with implementation of the EITI ebbed and flowed, dependent on which Minister had carriage of the issue. By the time the MSG had reported, Tony Abbott had become Prime Minister, the appetite for implementation was lacking, and the Government appeared to have shelved the EITI for the foreseeable future.

In keeping with style of the previous five years however, by the close of 2015 we had a new Prime Minister, Malcolm Turnbull. For Australian Civil Society who campaign in the transparency and anti-corruption space, this was a welcome change, and one that brought Government action to an area that for many years had been largely avoided.

Under the Turnbull Government, Australia has recommitted to joining the Open Government Partnership (OGP), and is currently in the processes of finalising its first National Action Plan (NAP), a process which PWYP Australia took an active part in. The recent Federal budget saw the introduction of strengthened whistle-blower protections, and the introduction of a Diverted Profits Tax (DPT), also known as a ‘Google Tax’. This is similar to legislation introduced in the UK and targets multinationals attempting to shift profits offshore to minimise Australian taxation. EITI implementation was announced as part of a package of commitments to coincide with Australia’s attendance at the London Anti-Corruption Summit last week, which also included announcing a consultation process on establishing a public beneficial ownership register for companies.

These are significant announcements for Australia. For many organisations, including PWYP Australia, these are the outcomes that years of campaigning and advocacy have been working toward. But we are aware that it is only the beginning. Policies are easy to announce, much harder to implement, and as Australia heads to election on July 2, we are faced with the possibility of yet more political change. For EITI implementation however, the future seems more stable. EITI importantly enjoys both bi partisan political support, and support from the formidable Australian extractives sector. Combined with PWYP Australia, and numerous other Civil Society actors, we have the successful collaborative combination for progressing with EITI candidature, regardless of election outcome.

It will be a process not without its challenges, and though we may not have the privilege of being the world leaders in extractives sector transparency, we do have the opportunity to learn from those who have gone before us. EITI also gives us a stronger platform to campaign from as PWYP Australia continues to advocate for the introduction of mandatory disclosure regulations that would bring us in line with many of our Northern counterparts. Australia continues to increase its presence in the overseas extractive sector, most notably on the African continent, and the need for oversight of Australian companies’ activities aboard has been highlighted by numerous organisations, including the International Consortium of Investigative Journalists (ICIJ). The ICIJ is the organisation behind the recent ‘Panama Papers’ expose and authors of the 2015 investigation into Australian mining in Africa, ‘A Fatal Extraction’. While a number of Australian companies have, or will soon, report under mandatory reporting regimes in other jurisdictions, many more are not captured under other jurisdictions reporting regimes. It is vital that Australia introduce these laws within our own country to ensure that we have true accountability of Australian companies’ activities overseas.

This is an exciting time for PWYP Australia. We are ready to contribute to the EITI process and continue to work with the Australian Government on mandatory disclosure. I wrote a blog in November 2015 for the PWYP website where I stated that ‘Australia is currently in the midst of some of the biggest transparency and anti-corruption conversations we’ve had as a nation. Unfortunately these have translated into minimal tangible changes.’ I’m pleased that I can now say that we are starting to see these changes. EITI is our first step, but it is an important one for Australia.

Australian Government commits to implementation of the Extractives Industry Transparency Initiative (EITI)

Publish What You Pay (PWYP) Australia welcomes the announcement by the Australian Government to implement the Extractives Industry Transparency Initiative (EITI).

“This announcement sees Australia take a positive and long overdue step to addressing transparency in the extractives sector” said PWYP National Coordinator, Jessie Cato. “PWYP Australia believes disclosure of payments made to governments is a central part of ensuring an environment of openness that benefits Australian communities.”

As we head into a Federal election, PWYP Australia calls for bipartisan support for both the EITI and mandatory disclosure to bring Australia in line with other jurisdictions such as the EU, US and Canada.

To date there has been no Australian legislation or policy that addresses the opaqueness of payments by oil, gas and mining companies to government. By not endorsing voluntary or mandatory disclosure, Australia has been continually out of step with the global trends on tax transparency.

The EITI is a voluntary mechanism of reporting in which extractives industry companies report their payments domestically. Australia undertook a pilot of the EITI in 2011, which was overseen by a Multi Stakeholder Group (MSG) of Government, Industry and Civil Society representatives. The MSG released its findings in May 2015 and concluded that Australia’s implementation of the EITI should progress.

“The EITI announcement is an important step in Australia’s process of establishing more transparent reporting mechanisms, and will complement the recently announced establishment of a beneficial ownership registry.” Ms Cato said. “However, as a voluntary domestic scheme, it can only reveal so much. True transparency will only be achieved with the introduction of a mandatory disclosure regime that accounts for companies’ payments to governments here and abroad is in place for the extractives sector”

PWYP Australia looks forward to working with the Australian Government as they progress through the steps of EITI candidature and reaffirms its calls on the Australian Government to include the introduction of mandatory disclosure legislation as a priority in the tax reform agenda.

PWYP Australia Media Release – 6 May 2016

For further information contact: Jessie Cato – Publish What You Pay Australia National Coordinator on +61 (0) 499 479 293.

Appetite for transparency in Australia

Since Publish What You Pay Australia was formed in 2011, Australia has had four Prime Ministers, including one who came back for a second (unsuccessful) go. For campaigners, the constantly changing political landscape has been challenging. However, there is much hope in civil society that stability is returning, and with it, an appetite for reform. Australia is currently in the midst of some of the biggest transparency and anti-corruption conversations we’ve had as a nation. Unfortunately these have translated into minimal tangible changes. Australia still has no mandatory disclosure legislation, and following a pilot of the EITI, has made no further steps towards implementation of its standard.

It is within this environment that PWYP Australia has been advocating to ensure that the Australian Government understands that mandatory disclosure and the implementation of the EITI are an integral part to any policy or legislative amendments aimed at increasing transparency and curbing corruption. To do that, PWYP Australia has been joined in its campaign by a visit from PWYP International Secretariat’s Advocacy Officer, James Royston. James and I have recently spent a week travelling Australia to engage with political, private sector and civil society members.

We began in Australia’s capital, Canberra, where we spent a hectic but productive day catching members of parliament between sittings. We were able to meet with representatives from Government and the opposition, and also from the Australian Greens, who currently have a Private Members Bill in the Senate on mandatory disclosure. It was heartening to see how many people were interested in meeting with us and learning more about how mandatory disclosure has come about in the EU and how this could be replicated here. Change won’t happen overnight, but at least the political will to have these conversations has returned to Canberra. PWYP Australia has made it very clear that we are ready and willing to support the Government in its work moving towards transparency.

Traveling to the other side of the country we spent a day in Perth, where amongst meetings with State Government, the Australian African Minerals and Energy Group (AAMEG) and coalition members, we hosted a roundtable at BHP Billiton. Attended by current and former representatives from organisations including BHP Billiton, South 32, Paladin and KPMG, a robust yet respectful conversation was had about how mandatory disclosure could work in Australia.

Importantly, we also spent time in Canberra, Perth, Melbourne and Sydney meeting with our coalition members. PWYP Australia is lucky to be supported by a coalition of some of Australia’s most active campaigning NGOs. Australia is geographically a large country, and face to face meetings can often be difficult to arrange, so it was great that so many members made an effort to meet with us.
While it was a busy trip and one with unseasonably cool and wet weather, which James seemed to have brought with him from the UK, it was a week that was of enormous benefit to the campaign. No doubt, there are obstacles ahead as Australia continues to move towards global standards, but with persistence, education and conversation, we are creating change.

This is the first blog in the series Life of a PWYP Coordinator.

Australia

Launched in 2011, PWYP Australia brings together a wide range of organisations, including human rights, aid, faith-based, anti-corruption, union and environmental groups. The coalition works with civil society, government and industry to fully implement the EITI, following the Australian government’s commitment to the initiative in 2016. Several members represented civil society in the country’s pilot’s EITI multi-stakeholder group, helping improve accountability Australia’s extractive industries and strengthen the EITI as the global standard for transparency in the sector.

Following Canada’s adoption of mandatory disclosure laws, Australia is the last major developed country yet to commit to such regulations. The coalition is working with the Australian government for laws obliging companies listed or based in Australia to publish what they pay to governments in countries where they operate.

Through the PWYP Data Extractors programme, the Australian coalition published Abundant Resources, Absent Data in September 2017. The report demonstrates the importance of open data to transparency in the extractives sector, building evidence-based policy and ensuring citizens and governments worldwide are benefitting from their natural resources.

Claire Spoors

We need to deal with the systemic causes of poverty and inequality and the extractives sector is the obvious place to start. The extractives sector needs to be accountable, not just in terms of the use of its revenues but also regarding its impacts on human rights, the environment and society for instance. Transparency is about pulling back the curtain to find out what’s happening, expose this to the world and hopefully improve the lives of people on the ground.

I’m really passionate about climate change and – although that may seem a strange link – I believe we can make better strategic choices if there is greater transparency around the economic benefits of mining (or lack thereof). We need to use natural resource revenues to prepare for a future once these resources run out.

Transparency can also be a way to begin to mitigate the chances of conflict occurring. Transparency is not the answer to all these issues but it is certainly part of the solution.

Testing the PWYP coalition model

The Overseas Development Institute carried out a study testing PWYP’s coalition model. Below is the introduction, click here to read the full report.

Introduction

Since its inception in June 2002, the PWYP campaign coalition has grown from a few UK-based organisations to become a global network of more than 700 organisations in almost 60 countries organised into a fairly loose alliance of affiliated national coalitions. Some of these coalitions share the same PWYP brand and logo, while others have distinct and independent identities. All, however, share the same status of affiliation, without differentiation.

With the growth and evolution of the global campaign has come two particular challenges. Firstly increasing demands on the international secretariat for coordination and support to national coalitions far outstrip its current capacities. Secondly, despite the important achievements of the campaign at the international level, national coalitions continue to face numerous operational challenges, which undermine their effectiveness to advance the advocacy agenda at national level. These problems are to be found at different levels and to differing degrees, though they are present in almost all coalitions in the resource-rich countries.

With this in mind, this study has two primary objectives:

1.     To test the organisational theory of change (“the coordinated, collective actions of a diverse coalition of organisations will be most effective in driving policy change for greater extractive industry transparency”) and assess the extent (and where, why and how) to which this theory has been proven at national level (or not).

2.     To assess the operational difficulties of coalitions and to recommend good practices for how coalitions can best be managed and supported.

The study began with a review of 10 country coalitions, selected in consultation with the International Secretariat: Ghana, Niger, Mongolia, Kyrgyzstan, Nigeria, Chad, Indonesia, Australia, US and UK. Of the ten countries, field trips were conducted in first four while the remaining six were studied remotely through telephone interviews. 

After preliminary analysis of the country reviews, a number of common themes were identified.  These were tested across a wider sample of opinion through a Delphic consultation conducted through two mechanisms at the PWYP conference in Amsterdam in 2012 – an instant vote system of up to 100 delegates within a session at the conference, and distribution of a paper questionnaire to all participants who were then able to answer on paper or online. The survey received 54 responses.

Read the rest of the report.