Thursday

29th Jun 2017

MEPs push for transparency rules on gas, oil and logging

  • MEPs voted through draft legislation that would require big oil and gas companies to disclose their business deals with governments around the world (Photo: ezioman)

The European Parliament is pushing for transparency laws that would require all large gas, oil, mining and logging companies listed on EU stock exchanges or domiciled in the EU to disclose payments they make to foreign governments anywhere in the world.

Deputies on Tuesday (18 September) in the parliament's legal affairs committee unanimously voted in favour of a draft law that would require the companies in the sectors to disclose all financial transactions above an €80,000 threshold.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

"It's a victory for those lobbying for fairness and justice in these areas and I think it's time the industry recognised that they are at the end of the line in terms of transparency and disclosure," Arlene McCarthy, the British centre-left MEP who drafted the parliament's position, told EUobserver.

Parliament expanded on the European Commission's original text by including forestry, construction, telecommunications and banking sectors in the mix.

Tuesday's vote means the text now has to go to "trialogue" negotiations with the commission and member states.

Should deputies get their way, companies will have to annually disclose the activities of subsidiaries, joint ventures and any other trade agreements. They will also need to report - on a country-by-country and project-by-project basis - all profits before tax, effective tax rates, total number of people employed and how much they are paid.

Sanctions for non-compliance of the rules would entail a fine of up to 10 percent of annual turnover for firms or €5 million for individual businessmen.

The proposals would entitle ordinary people to know where and how governments, for instance in the developing world, are paid by major corporations.

MEPs said exports of oil, gas and minerals from Africa were worth €300 billion in 2008. In comparison, international aid donated to the continent during the same year amounted to €33 billion.

"These communities need this kind of information. Many of them are existing on ten euros per person for clean water, for health care, and education yet they see millions being extracted in terms of natural resources and they have no idea where that money is going to," said McCarthy.

In May, the British-based NGO Global Witness reported that Shell and ENI subsidiaries in Nigeria paid over $1 billion to the Nigerian government to exploit a specific oil block.

It was later revealed in a New York court case that the Nigerian government paid the same exact amount on the same day to Malibu Oil and Gas, owned by convicted money-launderer and ex-Abacha-era oil Minister Dan Atete.

McCarthy claims that had Shell been required to report on these projects then Nigerian citizens would have been able to better scrutinise the transactions.

The Americans have already set into law a similar Obama-sponsored bill in August. The final provision of the US bill requires "resource extraction issuers" listed on US stock exchanges to disclose all payments to governments in all countries where they have operations.

Legal drafts leading up to Tuesday's EU version were riddled with exemptions, but the US law helped coerce some dissenting parliamentary deputies to remove them.

Deputies had originally toyed with a €500,000 threshold, but the US version set a $100,000 threshold which euro-deputies then used as a basis to agree on €80,000. The commission had also included an article exempting companies from respecting information requirements forbidden in some countries. Deputies cut it.

MEPs also rejected a definition of projects that was based on company reporting units as this would allow for too broad of an interpretation and could provide companies with a potential loophole.

The United States' Securities and Exchange Commission (SEC) had also recognised that basing the definition of project around a reporting unit would be contrary to the objective of greater transparency, noted McCarthy's office.

But whereas the EU proposal defines a project as activities governed by "legal agreements with a government upon which payment liabilities arise" the SEC did not provide any definition. Instead, it outlined how companies should not interpret the requirement for project-level reporting.

Industry representatives contacted by this website remained silent.

A Shell spokesman told EUoberserver by email: "We are currently reviewing the new SEC rules and will be evaluating their impact on our business; consequently, it is too early for us to comment."

Spanish-owned Repsol YPF did not comment and Exxon Mobil has yet to react to this website's query.

Slovenia and Croatia reignite border dispute

Croatia said it would not apply a ruling to be delivered by the international arbitration court on Thursday. Slovenia appeals to the EU to pressure its neighbour.

Luxembourg not a tax haven, claims PM

The prime minister of Luxembourg, Xavier Bettel, maintains that his country had broken no rules and committed no crime when issuing rulings that slashed global tax bills for the big firms.

Border management going virtual

EU leaders at a summit in Brussels are set to endorse new border control measures, while the head of a Tallinn-based EU agency predicts a future where border management goes virtual.

Interview

EU visa waiver unlikely to import Ukraine crime

Visa-free travel, which began last week, unlikely to prompt a Ukrainian crime wave, an EU police expert has said, but Ukraine itself is seeing increases in lawlessness.

Stakeholders' Highlights

  1. EU2017EEGet the Latest News from the 2017 Estonian EU Council Presidency @EU2017EE
  2. International Partnership for Human RightsEU-Kyrgyzstan Human Rights Talks Should Insist on Ending Reprisals Against Critical Voices
  3. European Free AllianceEFA Is Looking for a New Intern
  4. Malta EU 2017Conservation of Atlantic Tunas: International Measures Become EU Law
  5. European Healthy Lifestyle AllianceCan Statin Therapy Interfere With a Physically Active Lifestyle?
  6. EPSUOn Public Services Day, Stop Austerity! Workers Need a Pay Rise!
  7. EGBAOnline Gambling: The EU Court Rejects Closed Licensing Regimes In Member States
  8. World VisionFaces of Today, Leaders of Tomorrow: Join the Debate on Violence Against Girls - 29 June
  9. ECR GroupThe EU Must Better Protect Industry from Unfair Competition
  10. Malta EU 2017Better Protection for Workers From Cancer-Causing Substances
  11. EPSUAfter 9 Years of Austerity Europe's Public Sector Workers Deserve a Pay Rise!
  12. UNICEFEU Trust Fund Contribution to UNICEF's Syria Crisis Response Reaches Nearly €200 Million

Stakeholders' Highlights

  1. European Healthy Lifestyle AllianceCan an Ideal Body Weight Lead to Premature Death?
  2. Malta EU 2017End of Roaming Charges: What Does It Entail?
  3. World VisionWorld Refugee Day, a Dark Reminder of the Reality of Children on the Move
  4. Dialogue PlatformMuslims Have Unique Responsibility to Fight Terror: Opinon From Fethullah Gülen
  5. EUSEW17Check out This Useful Infographic on How to Stay Sustainable and Energy Efficient.
  6. Counter BalanceEuropean Parliament Criticises the Juncker Plan's Implementation
  7. UNICEF1 in 5 Children in Rich Countries Lives in Relative Income Poverty, 1 in 8 Faces Food Insecurity
  8. International Partnership for Human Rights26 NGOs Call on Interpol Not to Intervene Versus Azerbaijani Human Rights Defenders
  9. Malta EU 2017Significant Boost in Financing for SMEs and Entrepreneurs Under New Agreement
  10. World VisionYoung People Rise up as EU Signs Consensus for Development at EU Development Days