Australia should follow the lead of the US that has this week adopted new rules to stamp out corruption by forcing oil, mining and gas companies listed on the US securities exchanges to report all payments to governments in the countries in which they operate.
BHP Billiton and Rio Tinto will be impacted by the new rules ‐ announced this week by the US Securities and Exchange Commission ‐ which are a provision of the Dodd‐Frank Wall Street Reform and Consumer Protection Act passed in 2010.
Oxfam Australia’s Extractives Industry Policy Advisor Serena Lillywhite said the new rules, which related to payments including money for production licences, taxes and royalties, were ‘historic’.
“The starting point for tackling corruption, fraud and poor governance in the natural resource sector is transparency,” Ms Lillywhite said.
“Lack of reliable, public information about the flow of revenue to governments from extractive companies makes it impossible for communities to monitor the money and prevent it being embezzled by corrupt officials.
“It means that companies can be spending billions of dollars on a project in a country, but communities still may not have adequate hospitals or schools.”
Mark Zirnsak, Social Justice spokesperson for the Uniting Church in Victoria and Tasmania, said Australia needs to catch up to global action on transparency and introduce similar legislation here to cover companies listed on the Australian Stock Exchange.
“There is a steady flow of allegations of mining companies not paying the taxes required of them, especially in developing countries. This measure would help protect companies doing the right thing from such allegations being made, and make it easier to identify companies that are engaged in tax dodging,” said Dr Zirnsak.
“Tax dodging cheats local communities of finance for essential services and creates an unfair playing field between companies, where a company may gain an advantage from exploiting loopholes in tax laws rather than because it is more productive, efficient or innovative.”
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