Why mandatory disclosures matter for Indonesia

The global transparency wave has reached Indonesia. Initiatives such as the Extractive Industries Transparency Initiative (EITI) are bringing more transparency to Indonesia and the mandatory disclosures laws of the EU have led to more data on extractive activities in Indonesia becoming available.

But the oil, mining and gas industries are still among the most corrupt sectors and accessing relevant data on the amount of production, marketing, shipment and payment of taxes and other company financial liabilities is difficult. In Indonesia, ranked 90th out of 176 in Transparency International’s Corruption Perception Index 2016, the data from the three EITI reports published so far (between 2009 and 2013) is incomplete and out of date. Disclosing data will therefore not be enough to ensure accountability. The data also needs to used in a meaningful way by a range of stakeholders, including civil society.

In this case study, our Data Extractor from PWYP Indonesia used the disclosure of companies’ “payments to governments” data as an entry point to begin comparing the payments recorded by the parent company (listed on EU markets) with those received by the Indonesian government.

This case study was written by Meliana Lumbantoruan from PWYP Indonesia and is part of Publish What You Pay’s Data Extractors programme, a global initiative which trains PWYP members and activists from across our network to use extractives data.

Fact Sheet – SEC Rules for Oil and Mineral Payment Disclosure

On August 22, 2012, the U.S. Securities and Exchange Commission (SEC) voted to approve regulations to implement Section 1504, or the Cardin-Lugar Amendment, of the Dodd-Frank Financial Reform and Consumer Protection Act. Section 1504 requires any oil, gas or mining company reporting to the SEC to disclose their country and project-level payments to host governments each year. The following provides a summary of the key requirements. Direct quotes from the SEC rules are in italics.

Open Letter to President Obama from African Civil Society

Dear Mr. President,

We, the African civil society leaders of Publish What You Pay – a global coalition campaigning for an open and accountable gas, oil and mining sector – are addressing you on the eve of the US – Africa Leaders’ Summit.

We are addressing you as concerned citizens, forced to see their countries cheated out of revenues as illicit financial flows drain Africa of its resources. Because of trade mispricing, opacity and secrecy jurisdictions our continent has lost out on more than $1 trillion over the last 30 years. Africa is generating revenues, but many of these flow to the pockets of rich corporations and individuals rather than back to citizens. It shouldn’t be this way.

We are addressing you as worried parents, who fear that by the time our grandchildren grow up our country’s natural resources will have been depleted and we will have little to show for it. Our natural resources are an opportunity for us to create better lives for our future generations, but if good governance does not prevail that chance will be squandered. And with oil, gas and mining, the one chance is all you get.

We are addressing you as committed Africans and credible civil society actors that engage in good governance. Despite the difficulties there is a growing movement for good governance across our continent. Countries are joining, and successfully implementing, standards such as the Extractive Industries Transparency Initiative. They are taking ownership of natural resource management, incorporating the Africa Mining Vision and providing the continent with its own framework. We are building up expectations that the government has a role to manage natural resources in an accountable and transparent manner. But we, as civil society, need a guaranteed space and platform so that we can operate.

You once said that “Africa’s future is up to Africans”; and that is all we ask.

We are fighting every day to change our future. We risk arrest and intimidation to bring the issue of natural resources into the open. Where once silence reigned people now debate in the streets how their revenues should be managed. But the extractive sector has many players and there is only so much civil society can do within the current confines of the game. The US and other developed countries, as well as international extractive companies, profit hugely from the sector and the rules play to their advantage. They have their role to play too.

We are not asking for your charity – we are asking for a level playing field. We see the US – Africa Leaders’ Summit as a crucial opportunity for all parties to make concrete commitments to enhancing extractive governance. We are calling on our governments to commit to an open and transparent bidding process for the allocation of extractive contracts and licenses, including the publication of contracts. We are calling on our governments to commit to creating open budgeting processes, so that we can ensure extractive revenues are responsibly spent. We also ask them to include beneficial ownership declaration forms in procurement and contracts.

We have called on our governments. Today Mr. President, we respectfully call on you.

It has been more than four years since you signed the Dodd-Frank Act, section 1504 of which obliges all US listed extractive companies to publish the payments they make. This law will yield crucial data that can help us hold our governments to account, but it has yet to come into effect. We ask you to urge the SEC for a swift publication of the rules governing section 1504 to ensure that they are in line with recent EU legislation and the emerging global standard for extractive transparency.

The US once led on the issue of extractive transparency, we ask you to reclaim that mantle and commit to working with other G7/G20 countries to adopt and implement measures similar to Dodd-Frank 1504 and the EU Transparency & Accounting Directives.

We call on you to commit to strengthening multilateral rules on taxation to clamp down on trade mispricing and abusive transfer pricing, to help ensure that African countries at least have a fighting chance to profit from their resources.

Finally, we ask you to commit to creating a public registry of corporate beneficial ownership information. Countries including the Democratic Republic of Congo, Liberia, Niger, Nigeria, Tanzania and Zambia are implementing this as part of the EITI standard and the UK committed to doing so as part of the G7 Tax Trade and Transparency agenda. We are looking at US leadership to follow suit.

Africa has the necessary resources to forge its own destiny. However we need to change the global system that stacks the odds against us. The revolution for open government and transparency has begun, we call on you to help us complete it.

Yours Respectfully,

The Publish What You Pay Africa Steering Committee and members of the Global Steering Committee

Representatives of the PWYP Africa Steering Committee:

Taran Diallo, Publiez ce Que Vous Payez Guinée-Conakry

Ali Idrissa, Réseau des Organisations pour la Transparence et Analyse Budgétaire / PCQVP Niger

Bubelwa Kaiza, FORDIA Publish What You Pay, Tanzania

Jean-Claude Katende, Publiez Ce Que Vous Payez, DR Congo

Gilbert Maoundonodji, Publiez Ce Que Vous Payez, Chad

Steve Manteaw, Publish What You Pay, Ghana

Faith Nwadishi, Publish What You Pay Nigeria

African representatives on the PWYP Global Steering Committee:

Cecilia Mattia, National Advocacy Coalition for Extractives, Sierra Leone

Marc Ona, Brainforest Publiez ce Que Vous Payez Gabon

Civil society around the world calls on the SEC

544 PWYP members from around the world wrote to the SEC Chair, Mary Jo White, urging the Commission to reissue a strong implementing rule for Dodd-Frank 1504. You can view the letter – with all its signees – in PDF.

The Honorable Mary Jo White
U.S. Securities and Exchange Commission
100 F Street NE
Washington, DC 20549-1090

Monday, 14 April 2014

Re: SEC rule implementing the Dodd-Frank Act (Section 1504)

Dear Chair White,

We are a group of 544 civil society organisations from 40 countries, united by the Publish What You Pay (PWYP) Campaign and writing to urge the Securities and Exchange Commission (SEC) to re-issue an implementing rule for the Dodd-Frank Wall Street Reform and Consumer Protection Act (Section 1504) that aligns with the EU Accounting and Transparency Directives, with no country exemptions and full public disclosure of payments, without delay.

We, the signatories to this letter, represent the depth and breadth of the PWYP Campaign, including human rights, faith-based, anti-corruption and environmental organisations. We are from countries rich in natural resources, but blighted by corruption, conflict and poverty. We see on a daily basis the destructive effects that poor governance of natural resources has on our communities. Greater transparency of extractive industry revenues will reduce natural resource related corruption and conflict, and help ensure these resources are transformed into lasting public benefits.

We commend the SEC for its dedication in developing Section 1504’s original implementing rule, which followed Congress’s clear intent to make publicly available detailed information regarding revenue payments made to governments worldwide. We are extremely disappointed that a U.S. District Court vacated the rule.

However, the Court’s ruling does not preclude the SEC from requiring full public disclosure of project-level payments or denying exemptions, and we believe the SEC has the discretion to retain these critical provisions in the final rule, as long as sufficient justification is given.

Project-level reporting will bring great benefits to citizens’ groups in resource-dependent countries. Some of the signatories to this letter work in areas where numerous extractive companies are active, and in order to ensure that each company is meeting its fiscal obligations to the host government and community, we need to know the identity of individual company making the payment.

In other areas, a single company dominates production and makes numerous payments that arise from individual projects. Citizens in these areas need to be able to identify which project each payment originates from in order to be able to meaningfully monitor individual payments, which can reach up to US$1 billion. As the original 1504 rule recognises, contracts provide the basis for determining the payments that arise from resource projects. As such, the SEC should ensure that the final rule requires contract-based project-level reporting, so that communities are able to track payments from project to government.

Conversely, publishing compilation reports of data aggregated from multiple projects or keeping company names hidden from public view would deprive citizens of this vital information, allow extractive firms to hide questionable payments behind aggregated and anonymised data, and defeat the purpose of the Section 1504 law.

The importance of full project-level transparency is heightened further in areas where local revenue-sharing agreements are in place. In the Democratic Republic of Congo, for example, national law stipulates that 25% of tax revenues from individual mining projects should go back to the province, and 15% back to the local territory or town where development takes place. However, communities are currently not in a position to claim the tax money they are entitled to, as there is no way of knowing how much a given local project is generating in taxes.

Similarly in the Philippines, indigenous communities have a legal right to a minimum of 1% of royalties from mining in their ancestral domains. However, none collect this full amount, and there is little revenue transparency to help them do so. Project-level reporting would help communities to collect their entitlements, as well as help the government keep track of the royalties generated.

By helping to usher in a new era of stability and prosperity in resource-dependent countries and contributing to global energy security, Section 1504 will also deliver benefits for investors and companies. In order to achieve these positive results, the final rule must:

– ensure full public disclosure of payments, including the identity of reporting companies;

– require contract-based project-level reporting;

– include no country exemptions; and

– set a reporting threshold of US$100,000.

This would align the U.S. with the global standard for extractive revenue transparency, which includes the EU Accounting and Transparency Directives, as well as similar legal developments in Norway and Canada.

The United States has shown great leadership in the field of natural resource transparency, for which the communities we work with and represent are extremely grateful. Kofi Annan, Chair of the Africa Progress Panel, has urged the SEC to maintain its high transparency standards, and described efforts by the American Petroleum Institute to prevent meaningful disclosure as a “blip on the road to greater transparency.”

We sincerely hope the SEC will continue to support progress towards a global transparency standard by moving swiftly to produce a strong final rule, which will help achieve the goals of reducing corruption, poverty and instability in resource-dependent countries.

On behalf of the Publish What You Pay Coalition,

Marinke van Riet, International Director, Publish What You Pay


Burkina Faso

Hien Jonas, Organisation pour le Renforcement des Capacités de Développement

Tiergou Pierre Dabiré, Réseau Africain des Journalistes pour l’Intégrité et la Transparence


Dupleix Kouenzop, Dynamique Mondial des Jeunes

Justin Mabout, Service National Justice et Paix

Jaff Napoleon Bamenjo, Réseau de Lutte Contre la Faim

Samuel Nguiffo, Centre pour l’Environnement et le Développement

Ernest Nkolo, Acting For Guaranteeing Governance In Economy And Society

Ndi Richard Tnto, Service OEcuménique pour la Paix

Central African Republic

Josephe Bindoumi, Ligue Centrafricaine de Droits de l’Homme


Maoundonodji Gilbert, Groupe de Recherche et de Monitoring du Projet Tchad/Cameroun

Abbé Madjiro Raymond, Commission Nationale Justice et Paix

Mekombe Thérèse, Association des Femmes Juristes du Tchad

Abdoulaye Djibrine, Commission Permanente pétrole N’Djaména

Nailar Clarisse, Cellule de Liaison des Associations Féminines…

…Read the PDF version to see the other 530 signees!