Why is Tax Justice central to the accountability agenda in the extractives sector?

On 20 April 2018 PWYP hosted a webinar on tax and extractives as part of our ongoing engagement with PWYP members around the world to inform the PWYP 2020-2025 global strategy.

Kwesi Obeng kicked off the conversation with a presentation of the key ideas in his discussion paper, with respondents Daniel Mule (Senior Policy Advisor on tax and extractives at Oxfam US) and Mona Thowsen (Secretary General PWYP Norway) picking up and exploring some of those themes in the context of their work at national and global levels.

Following the webinar, Elisa Peter, Executive Director and Stephanie Rochford, Director of Member Engagement, sat down to discuss what we learned and how some of the discussion might be reflected in PWYP’s strategic planning for 2020 to 2025.

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Stephanie: Tax Justice is an umbrella concept that covers a wide range of issues – from the misguided use of tax incentives by governments to attract investment, to the need for cost-related data disclosure (in addition to payment data), to the use of tax havens by multinational companies that divert potential tax revenues, to questions relating to mineral quality and quantity, to the rights of communities (who are the ones most impacted by extractive activities) to access services and livelihoods. What are the themes that you felt resonated most strongly with our members during the discussion?

Elisa: Well it’s clear that members already see PWYP’s work to date as a contribution to a broad Tax Justice movement, given PWYP’s mission to ensure that any benefit (including tax revenues) derived from resource extraction is shared sustainably and equitably. I think that really came out clearly in this conversation – PWYP’s work at national and global levels is happening in the context of a Tax Justice agenda. This includes not only our flagship PWYP campaign on payment disclosure, but also the more recent push for beneficial ownership data, including through the EITI Standard; as well as the calls of many of our coalitions in the ‘home’ countries of multinational extractive companies for more transparency on tax through extended country by country reporting, as Mona from PWYP Norway pointed out. So, really, the question is not so much if but rather how PWYP can situate itself more strategically to work with other actors in the Tax Justice movement in a way that will enhance our respective impact and build on PWYP’s strengths as a global network of civil society activists.

Stephanie: Yes, PWYP’s strength and unique value absolutely lies in our member organisations – and many of them are human rights defenders. To what extent do you see an opportunity for PWYP to bring the rights of communities to the fore by incorporating aspects of the Tax Justice agenda more explicitly into our global strategy?

Elisa: That’s something that I think is becoming more evident: there’s a clear demand to look not only at the revenue collection aspect of a fair tax system but also how those taxes are then spent in a way that meets the needs of citizens, acknowledging that those needs will be very different depending on gender, class, poverty levels and many other factors. The example of Oxfam’s “Even it up” campaign can be a really useful one for PWYP to take inspiration from! Even if a country is able to capture the fair share of revenues generated by extraction through a solid fiscal regime, it is essential that the spending of these revenues is then managed effectively to alleviate poverty and end extreme inequality. Only when all these pieces are in place can natural resource exploitation be a force for good.

Stephanie: On that note, the question of the explicit link between tax and gender equality was posed during the discussion. Maybe that’s an angle where PWYP can add value at a global level?

Elisa: I was really pleased that this question of how tax relates to gender came up, particularly in light of the recent launch of our gender and EITI pilot project, which recognises that the transparency and accountability movement as a whole has not paid sufficient attention to the different ways in which women and men are able to participate in calling for and using extractives data. Kwesi’s response clearly highlighted that tax is absolutely gender discriminatory: for example, when tax breaks are offered for the benefit of corporations and their investors, the result is a reduced provision of the services that women tend to rely heavily on (such as healthcare, etc). So I definitely would like to see us continue to reflect on how we can do more as a movement to recognise and address the specific ways in which women are impacted by seemingly far removed macroeconomics decisions like tax policies.

Stephanie: Mukasiri Sibanda from PWYP Zimbabwe was unfortunately not able to join the webinar today, but he has eloquently expressed the need to ensure that the focus of PWYP’s work, as well as that of the Tax Justice movement, should be rooted in the rights of communities in resource rich countries to access services such as education, healthcare, infrastructure etc.

Elisa: Yes, and Daniel noted that greater participation in, and oversight of, expenditure of extractive revenues is a critical aspect of PWYP’s larger theory of change; but there are also a lot of challenges for PWYP members when it comes to looking at extractive revenues.

Stephanie: That’s true – unlike the issue of tax administration and collection, questions relating to expenditure of extractive revenues ultimately move into the realm of public financial management more broadly, since it’s rare to see ring-fenced budgets which would allow extractive revenue expenditure to be tracked. So the question of accountability here goes beyond extractives.

Elisa: I don’t think there’s a clear answer on how to handle this challenge – as a movement we will need to wrestle with the extent to which PWYP should, or is in a position to, focus our efforts on wider questions of public financial management.

Stephanie: And we have an all too timely example of why that’s not a conversation that PWYP can shy away from…

Elisa: Yes, the arrest of PWYP Niger national coordinator and Board member, Ali Idrissa, came about as a result of peacefully protesting against a finance law that they argue will foster corruption and facilitate tax breaks for the elite. Ali’s arrest brings home the realities of the powerful interests at play when it comes to natural resource extraction, and that accountability – natural resource justice – is not yet achieved and is going to be a hard won battle.

Stephanie: Yes, and this is something that we hope our new strategy will reflect as well – how PWYP members can create spaces to hold those powers to account. In terms of where we go next with our strategic planning in the context of Tax Justice in particular, what are some of the ideas that we want to bring to the PWYP Global Council when they meet in a couple of weeks to refine the 2020-2025 strategic priorities?

Elisa: There were a few key ideas from each of the participants that I found really exciting. For example, thinking about how we can leverage the power of the PWYP collective to tackle issues relating to tax incentives (something that Don Hubert clearly identifies as an entry point for engagement in the PWYP Canada report, “Many Ways to Lose a Billion”). Equally, there seem to be a few windows of opportunity to engage with corporate actors (for example, building on the work of the BTeam to develop responsible tax principles); or with multilateral institutions like the World Bank who are in a position to influence discriminatory tax systems. And there was a suggestion to develop more case studies that evidence the ways in which tax evasion and abuse in the extractive sector is facilitated, and the impact it has.

Stephanie: I agree, those were all really interesting aspects to consider. In addition, there was a clear message on the webinar that we need to capitalise on PWYP’s work over the past 16 years to make payment and contract information available, and to equip our members to use that information to make the evidence-based case for the equitable and sustainable management of the extractive sector.

Elisa: Absolutely – and we will continue that call for transparency which is what provides us with the evidence base to push for change.

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Thanks to all those who joined the webinar and contributed your questions and comments. You can find a summary of the first webinar on The Future of Extraction here.

And if you missed the webinar you can catch up by watching the recoding below:

Further webinars on tax and extractives are taking place in French and Russian this week.

Further reading:

Beyond Transparency Investigating The New Extractive Industry Disclosures

Originally posted on Oxfam’s website

In 2016, French companies extracting natural resources in developing countries made their payments to the governments of these countries public for the first time, detailing the payments for each of their projects. This is a significant step forward in terms of transparency in a notoriously opaque sector.

Nevertheless, while the stated objective of these measures is to facilitate public understanding and monitoring of the activities of companies exploiting natural resources, this report reveals various limitations, such as regarding access to the new data, which remains complicated, particularly for non-specialists. Lack of contextual data surrounding the disclosure of payments makes understanding the data even more difficult. Furthermore, loopholes in the Directives and their transposition into French law also limit possibilities of studying and comparing the different payments.

However, the disclosure of payments to governments shows that the governance of the sector is improving. This report demonstrates how the disclosure of this new information helped inform analysis of the activities of the French oil company Total in Angola and the French uranium giant Areva in Niger.

Case study: Sapin II: a very opaque transparency bill in France

Between 2012 and 2014, France was considered a champion of corporate transparency by its European peers. In 2013, the French Parliament passed a law setting a public country-by-country reporting (CBCR) for banks which likely influenced the vote for the EU Capital Requirements Directives (CRD) a few months later. Public CBCR is widely seen as an efficient way to monitor tax strategies of multinational companies, forcing them to disclose information on their operations (turnover, profits, taxes, subsidiaries, etc) on a country-by-country breakdown (including tax havens). In 2014, France was one of the first countries to transpose the EU Transparency and Accounting Directives, setting up public reporting for extractive companies, different from CBCR but equally useful, commonly known as Payment to Government reporting (PtG reporting).

However, despite promises from various government members and President Hollande himself, the extension of public CBCR to cover all large multinationals was never voted in Parliament. In mid-2016, in the aftermath of the Panama Papers, the French government introduced a new bill on transparency, the anti-corruption fight and the modernisation of economic life, commonly known as the “Sapin II bill”. Initially reluctant to establish a public CBCR, the government eventually backed down and introduced a watered down version of the measure.

In this case study, part of the PWYP Data Extrators, PWYP France Coordinator Quentin Parrinello used data-driven stories to outline how proposed changes to Payment to Government reporting would have allowed companies such as Total to hide a large part of their activities.

Open Letter to the French Minister for the Economy and Finance on Open Data

Read the signed pdf version here

Mr Michel Sapin,

French Minister for the Economy and Finance,

139, Rue de Bercy

75012 Paris

Dear Minister,

As Publish What You Pay ‘Data Extractors’, we are writing as a group of civil society
activists from around the world, united in our desire to use data from the oil, mining and
gas industries to hold governments and companies to account, and to ensure that citizens
in each of our countries are well-informed about, and involved in, decision-making
processes around natural resources. We have spent much of the past year examining
different sources of extractives data, and working on the application of a range of data
tools to make the data more publicly accessible, comprehensible and meaningful.

In advance of France’s hosting of the Open Government Partnership Summit in Paris, we
have been analysing the first reports on payments to governments submitted by extractive
companies in accordance with the EU Accounting and Transparency Directives as
transposed into both French and UK legislation.

Our analysis of reports under the French legislation has been made difficult by the lack of
a centralised repository and by the format of reporting used by companies. Unlike the UK,
France has not so far required extractive companies to disclose their payments in open
data and machine-readable format, and has not currently created a central electronic
platform where companies’ payments to governments reports are uploaded and can be
accessed by users. Companies subject to the French legislation are therefore left to publish
their report in PDF format only, on their own website or as a stand-alone publication on
the web.

This lack of a central platform in France makes it difficult for data users to locate French
extractive companies’ reports and to effectively monitor all the data available in the public
domain. To extract, copy or make use of data from a PDF requires time, training and
sometimes expensive computer programs. A central platform featuring company
disclosures in open formats (as defined by the Open Definition) would greatly increase
usability, encourage genuine interaction with the data, and make civil society scrutiny
much easier. Open data must become the global standard.

We urge the French government to reconsider its position on extractives data. This
December’s OGP Summit in Paris would be an ideal opportunity for France to announce
that it will require, as soon as possible, French registered and publicly listed extractive
companies to report their payments to governments via a central public-access electronic
platform and using an open and machine-readable data format.

Yours sincerely,

Copy : Mr Jean-Vincent Placé, Secrétaire d’Etat à la Simplification

The Data Extractors Team

Quentin Parrinello, Publiez Ce Que Vous Payez – France

Meliana Lumbantuoran, Publish What You Pay – Indonesia

Miles Litvinoff, Publish What You Pay – UK

Marco Zaplan, Bantay Kita –Philippines

Jana Morgan, Publish What You Pay – US

Mukasiri Sibanda, Zimbabwe Environmental Law Association – Zimbabwe

Dom Eagleton, Global Witness – UK

Waseem Mardini, Publish What You Pay – USA

And their supporters:

Paul Dziedzic, Open Oil – Germany

Joe Williams, NRGI – UK

Read our case study “Open Data: the extractive industries case study” available in English and French


PWYP France was the first national PWYP coalition, launched in 2003. Much of its work has focused on extractive transparency at EU level, with the coalition playing an important role in the introduction of mandatory disclosure rules in the EU. Following adoption of the Transparency and Accounting Directives in 2013, obliging EU-listed and registered companies to disclose their payments to governments, PWYP France engaged with the French government for the directives’ swift and effective implementation. The coalition also works on issues of tax justice and has forged strong partnerships with the movement in Francophone Africa. It has worked closely with coalitions in Senegal and Niger to conduct research projects.

French coalition member Oxfam France supported PWYP Niger’s campaign for a fair deal when Niger renegotiated extraction of its uranium with French nuclear giant Orano (formerly Areva). The analysis of the contract renegotiation concluded that Niger was losing out to Areva, despite what was announced as a “win-win deal”.