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By Joe Powell
The fight against corruption is messy, unpredictable and often dangerous. In developing countries it has historically been most acute in countries with large deposits of oil, gas and minerals, and involves the diversion of huge sums of money that could otherwise be spent on poverty eradication. That’s why last night’s agreement in Brussels for all 27 European Union member states to require extractive companies to publish the payments they make to governments is potentially such a game-changer. Transparency of this kind releases information that will make it harder for natural resource wealth to be lost to corruption or captured solely by elites.
The European decision follows a similar US law which passed in 2010 and came into force last year. It is to the credit of policy-makers on both sides of the Atlantic that the laws match each other in many respects, including requiring reporting to be on a project-by-project basis and for publication of all payments over EURO 100,000/$100,000 respectively. Both sets of lawmakers also rejected industry pressure for an exemption for reporting in the most autocratic countries where secrecy laws might be passed in the future, deciding these were precisely the places where greater transparency is needed most. This is the new global standard for legally binding transparency in the extractive industries.
Now attention should turn to two key issues: globalising the standard even further; and putting in place a plan for ensuring all the forthcoming data is used for accountability purposes. The G8 focus on natural resource governance presents an opportunity to make progress on both. First, the G8 countries not covered by Dodd-Frank 1504 or the EU Accounting Directive should commit to passing their own equivalent measures by the end of the year. Canada, home to over 2000 extractive industry companies and the largest non-African investor in mining in Africa, is a natural priority. Mining groups and civil society are currently working together to make a recommendation to government in the coming months for how this might work in practice. As co-chairs of the G20 anti-corruption working group Canada is also well placed to win support from other major players in the sector, including Australia, South Africa, Brazil and China.
The G8 can also help mobilise financial support to help the end-users of extractives data hold governments to account. These include parliamentary committees, supreme audit institutions, media, international organisations and local civil society. A new multi-donor ‘Follow the Money’ fund could be set up to support this. There must also be international vigilance to support the activists on the frontline of campaigns against corruption, such as the Publish What You Pay coalition member recently arrested in Gabon.
The momentum in favour of transparency and openness in the extractive industries is remarkable. It is testament to the organisation and commitment of the activists involved, and to the bravery of political leaders who persevered and stuck to their principles in the face of fierce lobbying. This is deservedly a moment for celebration but it would be a mistake to become complacent. The battles to make this transparency standard truly global, and ensure the data delivers the improvement in people’s lives that all sides want to see, will be just as tough. Europe struck an important blow in the fight against corruption last night. Now we must make sure it is not the last.
Joe Powell is the Senior Policy & Advocacy Manager at ONE
