|
The Extractive Industries Transparency Initiative (EITI) Standard adopted in May
2013 broke new ground by including revenues from the sale of natural resources
among the revenue streams to be reported by governments. This addition is of great
significance considering the economic importance of sales revenues, in particular in
the case of crude oil, and the rather opaque environment in which the sale and purchase of natural resources often takes place. Transparency of sales revenues, as for fiscal revenues from upstream activities, helps empower citizens of resource-rich countries to hold their governments accountable for the wealth generated by those resources. The author argues in favour of a global adoption of the EITI regime and its further strengthening in the area of disclosure of payments by companies purchasing natural resources, including commodity traders. The experience of Iraq with EITI reporting shows how information from the government as well as companies regarding the sale of the state’s crude oil can be made available to the public. National, top-down initiatives, such as the disclosure rules in section 1504 of the Dodd-Frank Act (not implemented at the time of writing), only compel companies under national jurisdiction to disclose payments to foreign governments. Unilateral initiatives create a patchwork of inconsistent standards, inviting regulatory arbitrage. As an example, while the disclosure requirements developed in the USA also apply to payments by listed companies purchasing natural resources for exporting (oil companies, refineries, commodity traders, etc); the scope of the legislation introduced in the European Union is limited to payments for upstream activities by companies in the extractive (and forestry) industries. The resulting unbalanced playing field, in addition to compliance costs, is an issue of concern to businesses, in particular with regard to the disclosure of commercially sensitive information. These considerations inform the ongoing debate regarding the possible adoption of transparency requirements in Switzerland, a major trading hub for physical energy commodities
|
Kembali