Landmark legislation a major defeat for Big Oil and boosts UK’s G8 push for extractive industries transparency
Today the European Parliament voted through legislation that will force natural resource companies to publish details of the billions in payments they make to governments around the world, such as taxes, royalties and licence fees. In a fresh development announced this morning, Canadian Prime Minister Stephen Harper has confirmed that Canada will enact similar legislation.
The new EU Accounting and Transparency Directives require EU oil, gas, mining and logging firms to disclose all payments of €100,000 and above for each individual project that they operate.
The new rules mean that for the first time, millions of people in resource-rich countries will be able to see where the money generated from their natural resources is going, and therefore ensure it is better used for their benefit.
Combined with a similar law implemented in the U.S. in 2012, the Directives will cover around 70% of the value of the global extractive industries, creating the basis for a new global transparency standard.[1]
The EU law’s passing will deliver a boost to the UK Prime Minister David Cameron’s welcome push to advance the global standard at the G8 summit in Northern Ireland on Monday and Tuesday next week.[2] Transparency campaigners are calling on world leaders to adopt similar legislation including in Australia and China.
The Canadian announcement is yet another indication that momentum towards a global standard of transparency in the extractives sector is now virtually unstoppable.
The EU Directives also represent a defeat for oil industry lobbyists in their attempts to stifle the establishment of a global transparency standard in the extractives sector. Companies including Shell and BP had lobbied to water down the EU Directives and are currently attempting to scrap the U.S. law through a legal challenge filed by an oil industry trade association, the American Petroleum Institute.[3]
The hard-fought Directives gained support across parliamentary political groupings with MEPs Arlene McCarthy and Klaus-Heiner Lehne championing the measure on behalf of the Socialist and Democrats and the centre-right EPP, and with MEPs Cecilia Wikstrom and Eva Lichtenberger rallying Liberal and Green groups’ support.
McCarthy, who championed the extractive transparency elements in particular, fought a long campaign to ensure that the final Directives would be fit-for-purpose, securing both project-level reporting and rejecting loopholes pushed for by industry.
The law is a major victory for Global Witness and the Publish What You Pay coalition after more than a decade of campaigning for this measure. “This is a huge victory for the transparency movement and we commend the parliamentarians and officials from the Member States and the Commission who have championed this legislation”, said Brendan O’Donnell, who leads Global Witness’s oil campaign.
“The new EU law shows that momentum towards a global transparency standard for the extractive industries is virtually unstoppable,” continued O’Donnell. “Shell, BP and others should stop swimming against the tide of transparency and rescind their effort to kill off similar legislation in the U.S.”
“Instead of undermining the UK’s G8 push to promote a level playing field, oil companies should call off their assault on transparency and publicly dissociate themselves from the litigation,” O’Donnell added.
Contact:
Strasbourg Brendan O’Donnell +44 (0) 7912 517 128 / [email protected]
London Dominic Eagleton +44 (0) 7738 713 016 / [email protected]
Notes to editors:
[1] In August 2012, the U.S. Securities and Exchange Commission (SEC) adopted implementing rules for Section 1504 of the Dodd-Frank Act. Section 1504 requires all oil, gas and mining companies that report to the SEC to disclose the revenue payments they make to governments on a country-by-country and project-by-project basis.
[2] The UK is using its Presidency of the G8 to advance the issue of extractive industries transparency. In a Wall Street Journal article on 13th May 2013, Prime Minister Cameron urged G8 leaders to move toward a global common standard for resource-extracting companies to report all payments to governments on a project-by-project basis without exception.
[3] The lawsuit seeks to overturn Section 1504 of the Dodd-Frank Act. It was filed by the American Petroleum Institute, the Chamber of Commerce of the United States of America, the Independent Petroleum Association of America and the National Foreign Trade Council against the U.S. Securities and Exchange Commission in the United States District Court for the District of Columbia on 10th October 2012.