Shine light on oil and gas industries, say MEPs

Large gas, oil, mining and logging firms should be required to disclose information about payments to foreign governments, members of the European Parliament agreed yesterday in a move welcomed by campaign groups.

The parliament's Legal Affairs committee backed rules making it obligatory for European Union-based companies to report payments of €80,000 or more that are made to foreign government officials, and to disclose the specific project the payment relates to. Non-compliance would lead to fines being imposed. A similar law has recently been adopted in the United States to cover US firms. Meanwhile the European Commission's proposal to exempt companies operating in countries that prohibit such disclosure was rejected by MEPs.

Arlene McCarthy, the British MEP who was responsible for the report, said: "The vote was a clear rejection of the 27 European Union member states' weak proposals for disclosure of country-by-country payments and reporting in the extractive industries. 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. More importantly, these rules will enable citizens to expose corruption."

Oxfam's EU overseas development expert Catherine Olier said MEPs had set a "bold example" by adopting the position. "This boost in transparency is desperately needed to ensure that citizens of poor countries can finally start to benefit from the resources that have cursed them for so long," she said, while also welcoming the committee's proposal that the rules be extended to banking, construction and telecommunications.

Jana Mittermaier, from Transparency International's EU office, said the vote would be "welcomed by millions in resource-rich developing counties who have been deprived of stolen oil and gas funds". She added: "Wealth in some of the poorest countries should no longer stay in the hands of corrupt elites, politicians and industry insiders. The publication of business information on a country-by-country and project-by-project basis is an important step toward greater accountability of governments and corporations worldwide."

The outcome of the vote "brings us one step closer to help citizens harness the often vast natural resource wealth of their countries to finance the fight against extreme poverty, disease and hunger, and the transformation of their economies to build opportunity for all," said Eloise Todd of the anti-poverty group ONE.

However, with the negotiations now set to continue between the parliament, the commission and member states in the Council of the EU, a note of caution was sounded by Javier Pereira, a policy officer at Eurodad, the European Network on Debt and Development. "Tax dodging is not easily defeated, so companies should be required to report additional information like sales volumes, assets and profits to put their payments into context," he said.

Nevertheless the changes would mean "greedy multinationals" could "no longer get away with opacity", said Liberal Democrat MEP Sharon Bowles. "Whether or not it is extractive industries, such as oil drilling and mineral mining, hi-tech industries, such as construction and telecommunications, or banks, multinationals operating abroad will have to be more transparent in their business dealings from now on," she said.