German Bundestag strengthens commodity transparency

This is an English version of a blog written by Andreas Hübers, Policy Advisor at ONE Germany, and originally posted on the ONE Germany website in German.

Recently the German radio station, Deutschlandradio Kultur, had a feature called “The resource curse – Why so many countries remain poor despite abundant natural resources“, during which I had the possibility to speak. An example of this apparently paradoxical phenomenon is Zimbabwe, where the ruling President Mugabe managed to secure his power with revenues from the extractive sector. So what is needed to avoid the waste of Government revenue?

Transparency is the answer. This is also how the EU sees it and the reason why it has set an international standard for the disclosure requirements in the extractive industries through the combination of two directives. The Accounting Directive requires that large non-listed European forestry and natural resource companies publish all payments made to governments in extractive countries in detail. The Transparency Directive ensures that the same rules apply to publicly listed companies in these same sectors.

About four years after the European Commission first gave the go-ahead to these proposed directives, the German Bundestag has today decided to pass the “Bilanzrichtlinien-Umsetzungsgesetz”, the Act to implement the respective directives, reaching the finishing line. It might be a long name for an already long legislative text and accounting definitely doesn’t sound very exciting. But it is extremely important in the commodities sector when it comes to the disclosure of payments to governments, as shown by the example of Zimbabwe. Firstly, it helps detect corruption, and secondly, it also supports civil society. If the citizens of a country know what revenue their state gets from the extractive industries, they are then able to check with their governments where the schools, hospitals and roads that can be built with the revenues from natural resources actually are.

ONE has worked with Transparency International, Publish What You Pay and many other German and international partners for about four years to reach this moment. In January 2011, transparency pioneers, including Prof. Peter Eigen, Bright Okogu, Dr. Bernd Pfaffenbach and the German State Secretary Gudrun Kopp, called for mandatory transparency of payments in Germany. In 2012, a petition signed by 160,000 ONE supporters was presented to the German Federal Ministry of Justice. Since then, ONE has worked tirelessly with many supporters and partners towards the implementation of the mandatory disclosures of payments in the extractive industries.

The German Bundestag has now fully implemented the Accounting Directive, and has included important details such as a very detailed breakdown of all payments and a clarification that there will be no exceptions. The joy is slightly tarnished by the fact that sanctions in case of non-compliance could have been higher to really have the desired deterrent effect. Moreover, it would have made more sense to publish the reports on the payment information portal https://www.govdata.de/ for African civil society rather than rather unknown “Bundesanzeiger”, an official German publication used by the German Department of Justice to announce laws and other mandatory legal announcements by the private sector.
Overall, however, the Bundestag has ensured that today is a bad day for all commodity autocrats and backroom dealers. And it is a good day for African journalists and citizens who are now eager to see the first reports in the summer of 2016.

Communiqué of PWYP Eurasia meeting

On 27-29 April 2015 representatives of civil society from Albania, Azerbaijan, Germany, Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan and Ukraine gathered in Kyev, Ukraine for the workshop on Ukrainian and Eurasian civil society in the EITI: Common challenges – joint approaches.
Civil society in the region faces similar difficulties in the implementation of EITI, whether that is ensuring that civil society is an effective participant of the multistakeholder group, having to operate in a restrictive environment or a lack of funding opportunities. The need for civil society to have a deeper knowledge of EITI and be better coordinated was expressed, and so this workshop also aimed to strengthen the network of PWYP Eurasia members with a view to promote sharing resources and information.

In order to face these challenges, participants met to not only share their experiences and best practices – in order for national coalitions to improve their own strategies based on shared knowledge – but also to strategise on how they could work together as a region to better implement and use EITI.

To this end, participants identified a series of best practices for benchmarking MSGs, which include the recommendations of holding the meetings in an extractive region outside the capital and the need for consultations with local communities in order to inform citizens about EITI. Participants also pooled their knowledge to map important extractive companies operating in their country, so as to find targets for joint advocacy and areas of common ground. Participants also agreed on a 2015 – 2017 joint action plan to promote and defend EITI implementation in the region.

Civil society organisations in the region are committed to EITI implementation in their respectful countries and share a number of recommendations.

That governments in the region ensure free, full, independent, active and effective participation of civil society in the EITI implementation process. Publish What You Pay members will monitor the situation in various countries and support members that face a deteriorating environment.
That governments embed EITI Standards in their national legal frameworks.
We call on global donor organisations to recognise that Eurasia is a region with much potential that faces many challenges, and to support projects in the region, particularly those related to transparency and accountability in the extractive sector.


We call on all extractive companies to adhere to and respect their EITI obligations in the respective countries of Eurasia. Too many companies are in breach of environmental regulation or fail to disclose their payments.


To call upon other countries in the region such as Georgia, Armenia, Russia, Romania to commit to the principals of transparency and accountability and implement EITI.

All decisions and recommendations are based on the principle that natural resources belong to the citizens and need to be managed responsibly and equitable so that women, men and youth in resource rich countries benefit.

Germany

Although Germany’s extractive sector is small, the country is a major importer of raw materials and has more than 2,000 extractive companies listed on its stock exchange. PWYP members in Germany were active in the campaign for amendments to the EU Transparency and Accounting Directives, obliging EU-listed and registered companies to disclose their payments to governments. They are currently working on Germany’s EITI implementation.