18th Mar 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.

EU told to create coalition against fake news

After almost two months of talks, a panel of experts set up by the EU commission have issued a series of recommendations on how to fight fake news or what they prefer to term 'disinformation'.

Poland defends judicial reforms, warns against EU pressure

Prime minister Mateusz Morawiecki presented the Commission with 94-pages of arguments backing Warsaw's controversial judicial reforms - while his EU minister warns that constant conflict with Brussels could stoke anti-European sentiment.


Why has central Europe turned so eurosceptic?

Faced with poorer infrastructure, dual food standards and what can seem like hectoring from western Europe it is not surprising some central and eastern European member states are rebelling.

News in Brief

  1. Sweden emerges as possible US-North Korean summit host
  2. Google accused of paying academics backing its policies
  3. New interior minister: 'Islam doesn't belong to Germany'
  4. Hamburg 'dieselgate' driver wins case to get new VW car
  5. Slovak deputy PM asked to form new government
  6. US, Germany, France condemn 'assault on UK sovereignty'
  7. MEPs accept Amsterdam as seat for EU medicines agency
  8. Auditors: EU farm 'simplification' made subsidies more complex

Stakeholders' Highlights

  1. Counter BalanceConmtroversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  2. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  3. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  4. Martens CentreEuropean Defence Union: Time to Aim High?
  5. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  6. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  7. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  8. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  9. EPSUWill the Circular Economy be an Economy With no Workers?
  10. European Jewish CongressThe 2018 European Medal of Tolerance Goes to Prince Albert II of Monaco
  11. FiscalNoteGlobal Policy Trends: What to Watch in 2018
  12. Human Rights and Democracy NetworkPromoting Human Rights and Democracy in the Next Eu Multiannual Financial Framework

Latest News

  1. Brexit and trade will top This WEEK
  2. Dutch MPs in plan to shut EU website on Russian propaganda
  3. Four years on – but we will not forget illegally-occupied Crimea
  4. Evacuated women from Libya arrive newly-pregnant
  5. Merkel in Paris for eurozone reform talks
  6. Commission rejects ombudsman criticism over Barroso case
  7. Western allies back UK amid Russian media blitz
  8. Meet the European Parliament's twittersphere

Stakeholders' Highlights

  1. Mission of China to the EUDigital Cooperation a Priority for China-EU Relations
  2. ECTACompetition must prevail in the quest for telecoms investment
  3. European Friends of ArmeniaTaking Stock of 30 Years of EU Policy on the Nagorno-Karabakh Conflict: How Can the EU Contribute to Peace?
  4. ILGA EuropeCongratulations Finland!
  5. EUobserverNow Hiring! Sales Associate With 2+ Years Experience
  6. EUobserverNow Hiring! Finance Officer With Accounting Degree or Experience
  7. UNICEFCyclone Season Looms Over 720,000 Rohingya Children in Myanmar & Bangladesh
  8. European Gaming & Betting AssociationEU Court: EU Commission Correct to Issue Guidelines for Online Gambling Services
  9. Mission of China to the EUChina Hopes for More Exchanges With Nordic, Baltic Countries
  10. Macedonian Human Rights MovementCondemns Facebook for Actively Promoting Anti-Macedonian Racism
  11. Nordic Council of MinistersGlobal Seed Vault: Gene Banks Gather to Celebrate 1 Million Seed Collections
  12. CECEIndustry Stakeholders Are Ready to Take the Lead in Digital Construction