Thursday, September 20, 2012

European Parliament Committee Approves Legislation Mandating Extractive Industry Disclosure

Large extractive companies dealing with oil, gas and minerals would be obliged to disclose full information on their payments to national governments, on a country-by-country and project-by-project basis, according to legislation approved by the Committee on Legal Affairs. The committee approved a package of proposals imposing on large companies extracting oil, gas and minerals and loggers of primary forests a new obligation to provide full details on their payments to national governments. Arlene McCarthy (UK), the MP responsible this piece of legislation, was pleased that the committee overwhelmingly backed her compromises for a strong law on transparency and disclosure for the extractive industries.  

Ms. McCarthy is the rapporteur (lead legislator) for this legislation. She called the vote a clear rejection of the 27 member states' weak proposals for disclosure of country-by-country payments and reporting in the extractive industries. The legislation proposed by the committee, to be agreed with the 27 national governments, would delete from the European Commission proposal an article exempting companies from respecting information requirements forbidden in the host country. Information disclosure would be on a country-by-country basis and indicate the financial resources allocated to each project. Project-level disclosure is the only way in which local communities in resource-rich countries are able to expose corruption and hold their governments accountable for using revenues towards development, MP McCarthy added.