This Week: One Step Forward, One Step Back for Extractive Transparency
This past week saw both a step towards transparency within the extractives industry by Canada and criticism for the US oil and gas industry’s attempts to work around section 1504 of the Dodd-Frank Act requiring mining, oil and gas companies to disclose payments made to governments worldwide.
The government of Canada announced that it “will require Canadian extractive companies to publicly report payments over $100,000 to all levels of government, both domestic and international.” Organizations such as Publish What You Pay are applauding this step towards fulfilling Canada’s initial commitment to developing transparency standards for oil, gas and mining companies in 2013.
Meanwhile, south of the Canadian border, the oil and gas industry in the US is experiencing backlash for their attempts to weaken directives in section 1504, such as being able to make exemptions for countries that bar disclosure. Advocates for section 1504 remark how this plays into the hands of corrupt governments encouraging them to create laws against disclosure.
Foreign Policy gives the example of Angola, which has struggled with corruption, and companies claim bans payment disclosures, yet Norway’s major oil company is already successfully publishing payment information including payments to Angola.
One of the best arguments for extractive transparency is highlighted in last week’s Financial Post examining how access to payment information allows communities in foreign countries are then able to demand their due portion of the payment, such as the 25% of the taxes and royalties paid by mines for the local communities in Cameroon.Transparency allows for communities to ensure they receive their legal share, and eases unrest caused by not knowing if they are or are not getting their share.
Extractives transparency is just one part of good governance, and I’m sure will be a part of the recently announced Research Network on Opening Governance. Over the next three years they will be researching their hypothesis that when governments and institutions open themselves to diverse participation, pursue collaborative problem-solving and partner with citizens to make decisions and perform the functions of governance, they are more effective and legitimate.
To sum up, a robust and involved citizen base makes for a more trustworthy and responsive government. I’m excited to see the results.
Weekly updates are written by Taryn Davis of Development Gateway; email her your tips for next week's update to get a shout-out in the post.