Press Release / Jan. 15, 2013

Limited tax payment disclosure by Shanghai-listed resource companies


New research reveals capability and widespread support to strengthen transparency

The Shanghai Stock Exchange (SSE) has the potential to play a greater role in improving extractive company transparency and disclosure and build on its existing social responsibility and corporate governance measures, said Global Witness and Syntao in a new report published today.

Transparency Matters: Disclosure of payments to governments by Chinese extractive companies presents a rigorous assessment of the tax payments made by Shanghai-listed extractive companies to governments in resource-rich countries in 2010 and 2011. It finds that while several companies positively stand out in the amount and quality of information they publish, much more could be done by the companies and regulators to enhance reporting beyond existing requirements.

“Our research reflects the emerging global consensus that transparency of payments made to resource-rich governments is necessary to prevent corruption and associated conflict,” said Dr Guo Peiyuan, Syntao. “It clearly demonstrates that a number of large Chinese extractive companies are already going beyond the basic reporting requirements and providing information about their payments to resource-rich governments in a detailed way. As a leading stock exchange in China on corporate governance disclosure, the SSE now has a golden opportunity to set an example and make quality reporting the norm.”

Transparency Matters also highlights some innovative measures brought in by the SSE, such as those looking at the social contribution value of companies per share and the transfer of mining rights. However, the report finds that the measures could be more coherently implemented to maximise investor protection and risk management.

The report also presents an analysis of the survey responses from a cross-section of extractive industry stakeholders in China. Responding to the suggestion that SSE could put in place improved requirements for publishing information, a significant proportion of respondents believed this would improve the global reputation of Chinese extractive companies and help investors better analyse risks faced by companies. Nearly a third of respondents explicitly supported the SSE synchronizing its regulations with those in Hong Kong, the United States and pending requirements in the European Union.

“More transparency would bring mutual benefits for companies, investors and local populations in resource-rich countries and in China,” said Gavin Hayman, Director at Global Witness. “We’re seeing Chinese respondents in particular recognise the long-term value for companies that comes from improving the transparency of their corporate governance and social responsibility practices.”

Global Witness and Syntao recommend that the SSE review its existing disclosure requirements targeted at the extractive industry. In particular, the SSE should follow international best practice standards and require extractive companies to provide details on payments to domestic and host governments on an annual basis.

“The Shanghai Stock Exchange could mark itself out as a global leader by introducing a requirement for extractive companies to disclose payments made overseas,” said Hayman. “Our report shows there is a growing appetite among key industry stakeholders for them to take this valuable next step.”

/ Ends


In Beijing

Dr Guo Peiyuan, Syntao, +86 136 7132 9213 (Chinese, English)

Anna-Sterre Nette, Syntao, +86 158 1041 3986

Dr Gavin Hayman, Global Witness, +44 7843 058 756

Lizzie Parsons, Global Witness, +86 159 0148 6690, +44 7808 761 572

In London

Brendan O’Donnell, Global Witness, +44 7912 517 128

Notes to editors:

  1. Transparency matters is available to download here:
  2. The extractive companies listed on the Shanghai Stock Exchange that were studied in the research were: Aluminium Corporation of China, Baoshan Iron & Steel, Baotou Steel, China Coal Energy, China Oilfield Services, Gan Su Jiu Iron & Steel, Jiangxi Copper, Maanshan Iron and Steel Ltd, PetroChina, Shanxi Coal International, Shenhua Energy, Sinopec, Wuhan Iron and Steel and Yanzhou Coal and Zijin Mining.       
  3. Global Witness is a London-based non-profit organization founded in 1993 that has carried out investigations in many resource-rich countries in Africa and Asia, as well as research of extractive companies and banks based in the United States, Europe and other regions. Through investigations and advocacy, the organization seeks solutions to the ‘resource curse’ so that natural resources contribute to development and poverty alleviation rather than conflict and corruption. More information can be found on the organisation’s website,
  4. SynTao Co., Ltd. is a Beijing-based consultancy promoting sustainability and responsibility in the Asian region. The company provides consulting, research and training services in Corporate Social Responsibility (CSR) and Socially Responsible Investment (SRI). SynTao has developed successful partnerships with a wide range of local and overseas organizations such as international and national corporations, government agencies, NGOs, academic institutions and media groups. Its website is
  5. The US Securities Exchange Commission approved the Final Rules for Section 1504 of the Dodd-Frank Financial Reform and Consumer Protection Act in August 2012. Section 1504 requires all oil, gas and mining companies listed on US stock exchanges to disclose revenue payments they make to governments in each country they operate in. The European Union is currently updating the Accounting and Transparency Directives to mirror Section 1504 of the Dodd-Frank Act, and to extend the regulations to large, non-listed extractive companies and logging firms registered in the European Union. The Directives are expected to become law in spring 2013. More information is available in the report.