Improving transparency in the European Union’s oil, gas and mining sectors (18/12/17)
In 2013, the European Union (EU) passed new transparency legislation requiring large oil, gas, mining and logging companies listed and registered in the EU to disclose their revenue payments to governments around the world. The EU Accounting Directive requires reporting of EU-registered companies’ payments to governments on a country-by-country and a project-by-project basis (for each country a company operates in and for each project to which payments have been attributed) as does a similar provision in the EU Transparency Directive for publicly listed companies. This includes disclosure of taxes paid, production entitlements, royalties, bonuses and other payments of EUR 100,000 and over. Thanks to this legislation, similar laws have been adopted in non-EU countries, including Norway and Canada, while similar draft legislation is currently being considered in Switzerland and Ukraine and has been pledged by Australia’s major opposition party, and a mandatory reporting law in the United States awaits the Securities and Exchange Commission (SEC)’s implementing rule.
The EU Accounting Directive has now been transposed into national law by all EU Member States. Early adoption by France and the UK means that global companies such as Shell and Total published their first reports in 2016, while the majority of European companies began reporting in 2017.
In 2018, the European Commission (EC) will review Chapter 10 of the Accounting Directive – the section setting out the requirements for “payments to governments” reporting by extractive companies.
This briefing paper has been prepared by members and civil society allies of the Publish What You Pay coalition in order to strengthen EU policy on promoting transparency and accountability in the extractives sector through the review of Chapter 10 of the Accounting Directive and Article 6 of the Transparency Directive. It outlines the main achievements of the existing transparency legislation for the extractives sector as well as its loopholes, and sets out recommendations for the EC’s review.