International mining companies, including some Australian companies, will now have to disclose all payments made to the governments of countries in which they operate, as the result of a new law passed by the US Congress yesterday.
Oxfam Australia Mining Advocacy Coordinator Serena Lillywhite said the new law would help to fight corruption, by requiring all companies registered on the US Securities and Exchange Commission (SEC) to disclose their payments.
“This historic measure will increase financial transparency in the oil, gas and mining industry and help reduce the corruption, mismanagement and conflict that can be associated with natural resource extraction booms,” Ms Lilywhite said.
She said the new law would apply to not only Australian listed companies on the US SEC such as BHP Billiton and Rio Tinto, but all international companies that were existing or potential future joint venture partners.
“This will reduce their risk of potential involvement in corrupt activity in high risk countries,” Ms Lilywhite said. “In many poor countries where mining companies operate, ordinary people do not see the benefits of mining operations. This law will help people who are often in need to share in the wealth of the resources buried under their feet.”
Oxfam wants the Australian Government to introduce similar legislation and implement the Extractive Industries Transparency Initiative (EITI), a global standard that promotes revenue transparency in the oil, gas and mining sectors.
“If companies publish what they pay to governments, and governments disclose what they receive from companies in annual accounts, ordinary people are in a stronger position to hold both governments and companies to account. This is an essential part of ensuring people benefit from mining-related revenue,” Ms Lillywhite said.
“Australian mining companies are significant global players, with more than 300 companies active in the countries of Africa alone.
“While Australian mining giants BHP Billiton and Rio Tinto have already voluntarily committed to country-by-country reporting of all payments to governments, the same cannot be said for other Australian companies.
“Mandating the disclosure of all payments by Australian mining, oil and gas companies on a country-by-country basis will demonstrate the Australian Government is serious in its approach to corporate governance. It will help Australian mining companies comply with international best practice, contribute to alleviating poverty and reduce the risks of complicity in corruption and human rights violations, particularly when doing business in high-risk countries.”
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