Wednesday

26th Sep 2018

Campaigners hail 'game-changing' EU deal on oil and mining corruption

  • Digging for gems in Congo: resource-rich but corrupt countries collude with multinational firms (Photo: Julien Harneis)

MEPs and ministers have agreed groundbreaking rules requiring oil and mineral companies to report payments made to third world governments.

The new rules agreed on Tuesday (9 April) will require extractive firms to declare all payments to governments over €100,000 on a country-by-country basis. The payments, which will cover a broad range of payments in kind, would have to be published for each individual project.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

MEPs also forced member states to scrap reporting exemptions in countries if disclosure would breach local law.

“The agreement will bring in a new era of transparency to an industry which is far too often shrouded in secrecy and help fight tax evasion and corruption," said EU internal market commissioner Michel Barnier.

Arlene McCarthy, the British Labour MEP leading the negotiations said: “We have stood up to attempts to water down these proposals from the member states demanding exemptions and loopholes, which would have defeated the purpose of the rules.”

Similar rules were agreed for US-listed extractive corporations last year as part of the so called Dodd-Frank bill reforming the financial sector which was adopted by the US Congress in 2010.

The combined scope of the US and European regimes will cover 90 percent of the world’s major international extractive companies.

Politicians and campaigners claim that the rules could end the so-called "resource curse" with countries unable to reap the benefits of their natural and mineral resources.

It is estimated that the annual exports of oil and minerals from Africa are worth seven times the value of international aid to the continent. 

Although the proposals on country-by-country reporting have taken centre stage, the legislation is also aimed at reducing administrative costs to small businesses by exempting them from an annual audit and having to publish consolidated financial reports each year.

Instead, firms would be required to prepare notes on their overall balance sheet as well as profit and loss.

An impact assessment of the new regime by the European Commission claimed that the new rules would see 1.1 million small companies making collective savings of €1.5 billion per year, and 200,000 medium-sized companies saving €0.2 billion per year.

Irish rock star Bono, who founded the development NGO One, described the deal as a "game-changing breakthrough."

"Transparency is one of the best vaccines against corruption, and now citizens the world over will know what their country’s resources are really worth," he said.

For her part, Jana Mittermaier, the director of Transparency International, a Brussels-based think tank, said that the legislation would "help create a new global benchmark for transparency in the natural resource sector.”

However, as expected, governments blocked a proposal by MEPs for a review clause aimed at extending the scope of the legislation to the telecoms and construction sectors.

Although the commission will issue a declaration prior to the EU parliament's final vote on the package promising to revisit the scope of the laws, there will be no reference to any specific sectors.

Commenting on this, Green group spokesperson Eva Lichtenberger said "it is hard to see why project reporting should be limited to these sectors. Many developing countries depend on agricultural products and infant industries, which are not covered."

EU court delivers transparency blow on MEP expenses

The General Court of the European Union in Luxembourg argued that disclosure of how MEPs use their monthly €4,400 expenses allowance risks violating an MEP's data protection rights. Journalists behind the case will appeal.

News in Brief

  1. No UK election before Brexit, says May
  2. Former French PM wants to be mayor of Barcelona
  3. Merkel's wingman in surprise defeat in internal party vote
  4. Orban sends thank-you letters to supportive MEPs
  5. UN chief: World suffering from 'trust deficit disorder'
  6. Stalemate in Sweden as parliament ousts prime minister
  7. Migrant rescue ship heading to French port
  8. EU angry at British tabloids on Brexit

Investigation

Cyprus: Russia's EU weak link?

Five years and €10bn after its EU bailout, Cyprus is a weak link in Europe's banking system - amid renewed fears on Russia money-laundering.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  2. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  3. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  4. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  5. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  6. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  7. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  8. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  9. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  10. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  11. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  12. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow

Latest News

  1. World upside down as EU and Russia unite against US
  2. EU court delivers transparency blow on MEP expenses
  3. Russian with Malta passport in money-laundering probe
  4. Cyprus: Russia's EU weak link?
  5. Missing signature gaffe for Azerbaijan gas pipeline
  6. Every major city in Europe is getting warmer
  7. No chance of meeting EU renewable goals if infrastructure neglected
  8. Brexit and MEPs expenses in the spotlight This WEEK

Join EUobserver

Support quality EU news

Join us