Ms Elisa Peter
Publish What You Pay International Secretariat
Elisa Peter is Executive Director of Publish What You Pay (PWYP) and was previously senior political adviser to The Elders. PWYP is a global coalition of civil society organisations united in their call for an open and accountable extractive sector: http://www.publishwhatyoupay.org
Time to extend oil, gas and mining payment transparency regulations to trading
Governments participating in the London Anti-Corruption Summit should build on international progress in implementing a mandatory global transparency standard for oil, gas and mining by agreeing to seek ways to extend natural resources transparency requirements to trading.
When governments and state-owned enterprises sell natural resources, the resulting revenues should benefit citizens. In most oil producing countries, the state receives a share of production, which is typically then sold by the national oil company. Such sales are often the largest benefit that a government receives for the commercial development of its oil, gas or minerals. Total sales by national oil companies of Africa’s ten largest oil producing countries from 2011 to 2013, for example, totalled $254 billion, equal to 56% of their combined government revenues.
Corruption has been found to occur in commodity sale transactions themselves, and secrecy in commodity sales lets governments hide how much revenue they receive. Civil society has exposed the link between commodity traders and politically exposed persons (PEPs) and the lack of due diligence in the sector. Falling oil prices have led to highly profitable deals for traders with cash-strapped producer countries.
International action by governments is urgently needed to end this major remaining area of opacity in the natural resources sector by making oil, gas and mineral trading more transparent and accountable. The Africa Progress Panel, chaired by former UN Secretary-General Kofi Annan and including former Extractive Industries Transparency Initiative (EITI) International Chair Peter Eigen, has called for the inclusion of commodity trading within the scope of mandatory transparency reporting regimes, and the International Monetary Fund has recognised the importance of trading-related payments.
Companies engaged in oil, gas and minerals commodity trading are not currently required to publicly report their trade-related payments to government entities under US, Norwegian, EU or Canadian country- and project-level extractive sector reporting regulations, although disclosure of trading-related payments by country and by individual buying company is now required under EITI. Legislation requiring country-by-country disclosure of extractives-related trading payments to governments by companies incorporated or publicly listed in the UK, the USA and Switzerland alone would capture well over half the world’s oil, gas and mineral trading, including 80% of oil trading.