Campaign for increased corporate transparency takes a step forward
19 March 2017
On 9 March, the international board of the Extractive Industries Transparency Initiative (EITI) agreed to insist on project-level reporting in all 51 member countries as of next year. EITI also voted to suspend Azerbaijan owing to deficiencies in the degree of civil society involvement.
The former was taken as an important victory by Publish What You Pay (PWYP), the international non-profit fighting for transparency in company reporting, of which the PSG is a participant member. PWYP’s aim is to help reduce the problem of corruption and to improve the quality of policy making.
At the meeting in Bogotá, all EITI members accepted the requirement to report company-level payments of elements such as tax and royalties. But only a quarter have so far been implementing the reporting of the same data at the level of individual projects.
The further step to insisting on project-level reporting is thus very important, especially for those who wish to have clarity as to the impact of extractives at the local level. This is particularly so for communities and other local stakeholders negotiating with companies and with the government, as well as for analysts of the impact of extractives and for policy makers who wish to improve regulation or taxation.
So far, Peru reports only at the company level; while many mining companies have only one project in Peru, there are a substantial number of projects that involve several companies.
This measure has been a requirement in the EITI standard since 2013, but its implementation has been obstructed by big US oil companies which, apparently, developed an effective strategy of insisting that a US transparency rule needed to be in place first through the US Securities and Exchange Commission (SEC) and then they fought to prevent the imposition of that rule.
The decision by the EITI Board makes implementation independent of the SEC ruling.
The PWYP mandate covers transparency in payments, which is an important step. There is, of course, the further question of transparency in trading; and here project-level reporting would be a powerful instrument for analysis and public policy, particularly where precious metals are concerned. At present this seems a bridge too far.