LONDON (Thomson Reuters Foundation) - European Union lawmakers voted on Wednesday for a law that will make oil, gas, mining and logging firms declare payments to governments, as part of efforts to end poverty in resource-rich nations by ensuring their wealth is shared out.
It echoes tough legislation passed in the United States last year, which has led to a court challenge brought by industry body the American Petroleum Institute.
Now that the European Parliament has passed the legislation, all that remains is for European Union member states to incorporate it into their own national legislation.
Arlene McCarthy, the European lawmaker who has guided the legislation through to its implementation, called the vote “history in the making.”
“This new law will be a major new weapon in the fight against corruption, ensuring that citizens of resource-rich countries can hold their governments to account for the exploitation of their natural resources,” McCarthy said in a statement before the vote.
“We have an agreement that we can be proud of and that shows how effective cooperation between legislators, citizens and action groups can deliver real change,” McCarthy added.
The EU law orders firms to report payments at project as well as country level, beginning at a threshold of 100,000 euros ($130,000), higher than some campaigners had hoped, but far below the million-dollar level resource firms had said was practical.
The EU deal goes further than the U.S. law in that it includes the logging sector and covers large unlisted EU companies, as well as listed firms.
“The new EU law shows that momentum towards a global transparency standard for the extractive industries is virtually unstoppable,” said Gavin Hayman, a director at campaign group Global Witness.
Canadian mining companies and transparency campaigners on Friday agreed a draft framework under which they will disclose how much they pay to governments for the right to extract gold, coal and other minerals. The framework is expected to be published this week once final details are ironed out.
Financial transparency is high on the agenda for G8 leaders from major industrial countries meeting next week in Northern Ireland as a way to tackle poverty in times of constrained development aid budgets.
“Now Shell, BP and others should stop swimming against the tide of transparency and rescind their effort to kill off similar legislation in the U.S.,” Hayman said.
"Why not call off their assault on transparency, dissociate themselves from the litigation and support rather than undermine the UK’s G8 agenda to promote a level playing field for companies around the world?” Hayman added.
Our Standards: The Thomson Reuters Trust Principles.