It has been an exciting week for transparency: mega-mining giants Canada and Australia both moved forward with oil and mining sunshine rules, adding to the momentum started by the 2010 U.S. Dodd-Frank Act and the EU’s 2013 Transparency and Accounting Directives. The UK Parliament is set to adopt landmark EU transparency laws this month, with several other European nations close behind. As we celebrate this progress, it’s also clear that the U.S. needs to follow suit to ensure consistency and help empower citizens of resource-rich nations to fight corruption, inequality and poverty.
Canada last week introduced legislation that will require mandatory disclosure from large private companies and companies publicly traded on Canadian stock exchanges. There is work left to do for Canada to ensure their rules meet international standards. Important details – including what level of disclosure will be required – will be determined in the next stages as the government develops its regulation and administrative guidance. Oxfam hopes to see public disclosure of project-level payments – so that communities are able to understand how much the specific oil and mining projects that impact their daily lives contribute to government coffers. Without this information, communities have a harder time ensuring that the government spends that money providing services like health, sanitation and education.
{mosads}Later this month, the UK will likely become the first EU member to implement the EU Accounting and Transparency Directives, which require oil, gas, mining and logging companies to disclose payments. The law originally followed the standard set by the U.S. Securities and Exchange Commission in 2012 that was overturned last year. While the U.S. has fallen behind, Europe continues to move forward. The UK committed to finalize its law ahead of the EU’s mid-2015 deadline, and France, Germany, Finland, Italy, Denmark, and Sweden have also committed to finish national legislation quickly. By next summer, all 28 member states will have laws on the books that require disclosure – and will cover major energy companies like Shell, BP, Gazprom, Rosneft, Rio Tinto, Vale and AngloAmerican.
This week in Australia, the MPs introduced a “Publish What You Pay” bill in parliament aimed at cracking down on corruption, matching standards in the EU and U.S. Given the massive global reach of the country’s mining sector, we see a crucial opportunity for impact in Africa, for example, where more than 200 Australian mining companies are operation more than 700 projects, with zero disclosure requirements from their home governments.
The U.S. was the leader in the fight for transparency in the oil, gas and mining industry when the Dodd-Frank Act became the law of the land. Unfortunately the oil and gas industry fought the rules, and a lawsuit sent them back to the SEC to be rewritten. Action is urgently needed from the SEC and with a clear global standard emerging, it should be easy for the SEC to finish the job.
Last month we sued the SEC over the delay on finalizing these rules, but we continue to engage the Commission and will be working with them to see a strong rule that matches these global best practices once the formal rulemaking process starts.
Why so much interest in what seems like a pretty complicated issue? Well, natural resources in developing countries generate billions in exports every year. But resource-rich countries often are more likely to suffer from what’s called the “resource curse,” because the new wealth becomes a target for corruption and greed, or fuels armed conflict and instability. Sixty percent of the world’s poorest people live in countries that are rich in natural resources, but corruption and secrecy mean that communities often don’t benefit from the development of these resources. Making sure that these payments are transparent will help ensure that resource wealth goes to reducing poverty and inequality instead of exacerbating it or going into the pockets of corrupt bureaucrats or officials.
Transparency advocates in resource-rich countries are in a constant struggle to push their countries to meet international best practices. That’s what makes this progress so important. With one piece of legislation, transparency can be improved in more than 50 countries at once. If harnessed well, this regulatory power can deliver crucial information to places where oil and mining projects operate in secrecy.
Gary is senior policy adviser on Extractive industries for Oxfam America.