Canada Should Adopt U.S. Legislation Which Sheds Light on Oil and Mineral Revenues
OTTAWA - Canada must follow the example set by the U.S. Congress and adopt groundbreaking legislation that forces companies to reveal their financial dealings here and abroad, says a Canadian organization that works to improve transparency and accountability in resource extraction industries.
"Canada is a global leader in the energy and mining sectors, but not when it comes to demonstrating corporate openness," said Ousmane Dème, Publish What You Pay-Canada Coordinator. "It's time Canada lives up to its commitment to promote transparency in extractive industries by adopting similar rules as our largest trading partner." On July 15th, 2010, the U.S. Congress voted in favour of sweeping financial reforms which include a landmark provision requiring oil, gas and mining companies registered with the U.S. Securities and Exchange Commission to publish how much they pay to foreign countries and the U.S. government.
The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law by President Obama and will give citizens of resource-rich countries essential information to hold their governments to account and ensure that natural resources generate benefits for everyone, rather than a select few.
The new law is a major success for Publish What You Pay (PWYP), a global coalition of 600 development, environmental, faith-based and human rights organizations operating in over 50 countries. In many countries rich in natural resources, citizens have little or no information about how much money is being paid to their governments in revenue.
"With this far-reaching new law, citizens now have a reliable tool to ensure the wealth created by natural resource extraction is used for essential social services such as health and education, and economic development opportunities", said Radhika Sarin, PWYP-International Coordinator. "This law sets a new, higher global standard for financial transparency...and will also make these industries more transparent to investors. This is a victory for everyone who recognizes that financial transparency is essential for government and corporate accountability," said George Soros, the founder of the Open Society Institute.
The law will apply to hundreds of companies, including 90% of the world's largest internationally operating oil and gas companies, as well as eight of the world's ten largest mining companies. It will directly apply to many Canadian companies registered at the US Securities and Exchange Commission. The Hong Kong stock exchange, which carries a number of Asian majors, enacted similar rules this year and the International Accounting Standards Board (IASB) is considering a rule change to make disclosure of payments to governments standard in the 110 countries which use IASB rules.
Dème noted that Canada has no such legislative or reporting mechanisms in place. "The inclusion of payment information, broken down by government, country, project and type of payment, as is stipulated in the Dodd Frank Wall Street Reform, does not occur in Canada," he said. "Knowing the importance of the Toronto Money Exchange (TMX) for the global extractive sector, we urge the Canadian government to take similar action."
Publish What You Pay Canada is a national coalition of civil society organizations campaigning for greater transparency and accountability in the oil, gas and mining industries. PWYP-Canada is hosted by Partnership Africa Canada.
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