Wednesday

23rd May 2018

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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

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.

Eight countries to miss EU data protection deadline

The EU starts enforcing its general data protection regulation on 25 May - but Belgium, Bulgaria, Cyprus, Czech Republic, Greece, Hungary, Lithuania and Slovenia won't be ready. The delay will cause legal uncertainty.

Gay rights under threat in divided Europe

From same-sex marriage in Malta to horrors in Azerbaijan - survey shows huge disparities on gay rights in Europe, amid "stagnating" progress and populist threats.

Austria accused of undermining new EU data law

Most EU states have yet to pass the national laws needed to equip authorities with the resources to enforce the upcoming EU general data protection regulation. Austria, previously deemed a leader for high data standards, appears increasingly wary.

Stakeholders' Highlights

  1. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  2. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  3. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  4. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  5. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  6. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  7. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  8. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  9. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  10. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  11. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach
  12. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May

Latest News

  1. 'Killer robot' projects eligible for EU defence fund
  2. Funding for European values needs radical changes
  3. Feeble EU format deflates Zuckerberg 'hearing'
  4. Are EU data watchdogs staffed for GDPR?
  5. EU pessimistic on permanent US trade exemption
  6. US asks EU to go after Russian and African villains
  7. Facebook threatened with removal from EU-US data pact
  8. Defence firms 'reap benefits' of advice to EU

Stakeholders' Highlights

  1. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  2. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  3. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  4. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  5. Mission of China to the EUProgress on China-EU Cooperation
  6. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  7. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  8. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  9. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  10. UNICEFCalls for the Protection of Children in the Gaza Strip
  11. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  12. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight