Oxfam-Eurodad welcome MEP's vote on EU reporting rules for extractive industries
Today the European Parliament’s Legal Affairs Committee (JURI) voted in favour of assuming a strong position on European anti-corruption legislation, which would oblige oil, gas, mining firms and the logging industry to report what they pay to governments in countries in which they work.
International agency Oxfam and the European Network on Debt and Development (Eurodad) welcome the MEPs’ ambitious proposal on this legislation, which would not only fight against corruption in the extractive or forestry sectors but also in others like banking, telecommunications and construction. MEPs also sent a clear signal that in three years, they want to review the EU Accounting Directive to boost transparency which could help both developing countries and EU member states to combat tax evasion and avoidance.
Catherine Olier, Oxfam’s EU overseas development expert, said:
“Today’s vote represents a real step forward in the fight against corruption and the resource curse in developing countries. MEPs have set a bold example by adopting a position that will champion the rights of the resource-rich poor by giving them project-specific information that will help them hold their governments to account. In doing this, citizens can ensure that governments collect the money owed and use it to lift them out of poverty.
“MEPs have shown that they are serious about increasing transparency in all sectors by proposing to extend the legislation to the banking, construction and telecommunication industries. This boost in transparency is desperately needed to ensure that citizens of poor countries can finally start to benefit from the resources that have cursed them for so long.”
Javier Pereira, Policy Officer at Eurodad, said:
“Despite today’s promising progress, there is still a long way to go to ensure that this legislation effectively combats issues of corruption that keep people in developing countries in a cycle of poverty. Tax dodging is not easily defeated, so companies should be required to report additional information like sales volumes, assets and profits to put their payments into context. EU governments must now raise the bar by adopting a strong proposal, which should be at least in line with the recently implemented US rules.”
Notes to Editors
In 2008 Africa’s oil, gas and minerals exports were worth roughly 9 times the value of international aid to the continent ($393 billion vs $44 billion). And yet many countries have failed to turn natural resource wealth into lasting benefits.
- $300bn - $400bn: this is the amount of money from oil extraction that has been stolen or wasted over the last 50 years in Nigeria, according to Nigeria’s corruption agency.
- $86,000: this is all that the Democratic Republic of Congo’s treasury received from mineral rights in 2006, despite an estimated $1 bn of mineral exports each year.
- Only half of the mining companies paid corporate tax in Zambia in 2008
Source: Eurodad report “Exposing the lost billions”
Examples of how ‘country by country’ reporting would help address tax dodging:
- Swiss mining company Glencore operating in Zambia (Mopani Copper Mine), page 29
- UK brewery SABMiller, operating in Ghana, page 31
Oxfam welcomed the US Securities and Exchange Commission (SEC) for finally publishing the rules, under the Dodd-Frank Act, a few weeks ago. These rules will provide important information to investors and citizens and help stem corruption in resource-rich countries. Citizens will be able to use this information to hold their governments accountable. The new US law requires over 1,100 oil, gas and mining companies – including many European-based companies such as Shell, BP and Total – to report how much they are paying not only at the country level but for specific local projects.