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(Jun 07, 2013) The Legal Affairs Committee of the European Parliament has endorsed draft legislation that requires companies involved in gas, oil, and mineral extraction as well as logging, to provide full disclosure of payments made to national governments. (Press Release, MEPS Back Deal Forcing Oil and Mineral Firms to Disclose Payments to Governments (May 30, 2013), EUROPEAN PARLIAMENT NEWS.)

Payments made to all levels of government, whether federal, regional, or local, that exceed €100,000 (about US$131,000) must be disclosed publicly. Companies are not permitted to divide the payments among several recipients in order to avoid disclosure. The types of payment included are broadly defined and include royalties, certain taxes, dividends, bonuses, and production entitlements. (Id.)

The Parliament fought hard to remove from the draft legislation a clause initially proposed by the European Commission that had exempted companies from reporting requirements if the host country's criminal law prohibited such disclosure. (Id.)

Arlene McCarthy, the United Kingdom member of the Legal Affairs Committee in charge of the legislation, opined:

This is a major step forward in the global fight against corruption. Parliament maintained a strong line during the tough negotiations with member states. As a result, project-level reporting, a low materiality threshold for disclosure and no exemptions from reporting payments were secured, giving communities in resource-rich countries the necessary tools to hold their governments to account for payments they receive from multinational companies. (Id.)

The oil and gas companies lobbied strenuously against adoption of the new rules, but did not prevail. (EP Panel OKs Stricter Reporting Rules for Extractive Industries, UPI (June 3, 2013).)

The next step in the legislative process is for the proposal, as endorsed by the Legal Affairs Committee, to be submitted to the full Parliament. It must then be approved by the Council. (Press Release, supra.)

Author: Theresa Papademetriou More by this author
Topic: Corporations More on this topic
 Government ethics and transparency More on this topic
 Mining More on this topic
 Natural resources More on this topic
Jurisdiction: European Union More about this jurisdiction

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Last updated: 06/07/2013