EU politicians vote for tough oil, gas anti-corruption law

Source: Reuters
Date: 18 Sep 2021

European Union legislators voted for draft anti-corruption law, echoing rigorous U.S. rules to make oil, gas and mining firms declare payments they make to resource-rich governments.

Pressure has mounted on the EU to take a tough line after the U.S. regulator in August set demanding rules for U.S.-listed firms.

Tuesday's series of votes in the European Parliament backed detailed reporting to regulatory authorities starting from a minimum threshold of 80,000 euros (64,693 pounds), almost identical to the $100,000 U.S. requirement and far lower than the million-dollar level some resource firms had said was practical.

EU-based resource companies would have to disclose payments made at project level, as well as at country level, which campaigners say is essential to ensuring transparency.

In contrast to the U.S. rules, the European Parliament is also proposing to include the forestry industry, as well as requiring country-level reporting for the banking, construction and telecommunication sectors.

The draft rules will only become law following further negotiations and approval by EU member states.

"We have won the battle but not the war," said Arlene McCarthy, a British Labour member of the European Parliament, who led the discussions in the assembly.

She said it had stood firm against industry lobbying.

"We have not given in to the pressure of industry and government lobbying for a weak transparency regime. We are insisting on project-by-project reporting with a low threshold."


Non-governmental organisations were swift to welcome Tuesday's decisions.

"Today's vote brings us one step closer to helping citizens harness the often vast natural resource wealth of their countries to finance the fight against extreme poverty, disease and hunger, and the transformation of their economies to build opportunity for all," said Eloise Todd, Brussels director of campaign group ONE.

ONE campaigns against poverty, especially in Africa, where resource wealth is concentrated in the hands of an elite and for millions, the resources are a curse rather than a blessing.

Another campaign group Publish What You Pay said, if passed, the EU proposals should help to ensure benefits of payments, such as royalties, signature and production bonuses or licence fees are shared.

"Sunshine is the best disinfectant," Joseph Williams, senior advocacy and communications officer, said. "This legislation will bring greater disclosure to the natural resource sector, which has for too long been shrouded in secrecy."

Others who have lent their voice to the call for a strong stance include Kofi Annan, the former U.N. secretary general who last week cited the example of labour unrest sweeping South Africa's platinum belt as an added reason to crack down on corruption.

"The recent violence at the Marikana mine in South Africa shows what happens when trust is in short supply at the local level," he wrote in an opinion piece in the New York Times.

Oil majors and other resource firms have said they believe in transparency and have already signed up to international guidelines enshrined in the Extractive Industries Transparency Initiative.

But some have complained project-by-project reporting, as opposed to reporting at country level, is unnecessary and impractical, as well as taking issue with the payment threshold.

They have also raised the possibility of a legal challenge to the U.S. rules, but the case for that could be weakened if the EU can agree robust law, McCarthy said.

"If you end up with a (European) law that's quite similar (to the U.S.), one of the arguments that there is anti-competitive element becomes groundless," she said.

By Barabara Lewis