Advocates for Accounting Reforms Prepare for Crucial Debate
This August, the International Accounting Standards Board (IASB) released a working draft of its new guidelines for extractive activities. Accounting standards regulate the information companies must publish in annual financial reports, including a company's property, payments, revenues, profits and losses. Reforms supported by Revenue Watch, PWYP, and a community of transparency advocates would require that companies report key information such as payments to governments, production, costs, reserves, key subsidiaries and properties, on a country-by-country basis. These disclosures would enable comparisons between countries and companies and create a powerful tool for citizen oversight of resource-dependent governments, as well as for companies, investors and tax authorities.
If successful, the proposed International Accounting Standards reforms would be applicable in more than 100 countries, including all of Europe, South Africa, Australia, Russia and China, meaning that any company registered or raising capital in these nations would be required or permitted to follow this rule, wherever they operated in the world. As a result, a company such as Shell (which is listed on the London Stock Exchange), would have to report this information for every country in which it operates, and citizens of these countries could determine what Shell is paying their government by reviewing the company’s financial report. Other notable countries, including Canada, the US and Brazil are moving towards convergence with the IASB, rendering the new standards a practical global standard.
The new IASB working draft includes substantial discussion of proposals by the international Publish What You Pay (PWYP) coalition that would require all revenue payments, including signature bonuses, production payments, royalties and taxes, to be disclosed on a country-by-country basis. The draft also includes supporting comments from investors on the usefulness of country-by-country disclosure, adding an important element of support in determining the acceptance of the new standards.
Various civil society groups, including RWI, PWYP, the Catholic Agency for Overseas Development, Care International and Global Witness, are now preparing to respond to the official publication of the IASB "Discussion Draft" in early 2010, and the six-month period of formal comments and consultation that follows. During this time, it will be critical for civil society to send in letters in response to the discussion draft and that investors write in support of accounting standards reform. Based in part on these comments, the IASB will decide its agenda for the standards in December, 2010.
This is a crucial time for civil society to work with investors, as well as supportive companies, to continue building support for this reform. Please contact Vanessa Herringshaw of RWI (vherringshaw@revenuewatch.org) or Joseph Williams of PWYP (jwilliams@publishwhatyoupay.org) to learn how you can help.
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Charged With Fraud, Nigeria's Ruling Party Leader Resigns - Reuters
Western Senators Propose Ban on Pacific Drilling - The New York Times
To Limit Corruption around Mining in Africa, Follow the Money - The Globe and Mail
Court Backs Oil Project - The New York Times
Transparency Increases, But There Is Still a Long Way to Go - The Phnom Penh Post
IMF Develops Project to Help Africa Deal with Illicit Trade - African Manager
Three-day Conference on Africa's Natural Resources Starts in Tanzania - Standard Times Press
After Oil Rig Blast, BP Refused to Share Underwater Spill Footage - ABC News
Finger-Pointing, but Few Answers at Hearings on Drilling - The New York Times
Complaints Over U.N. Prize Sponsored by Equatorial Guinea's Obiang - Reuters
Guide: Community-Company Grievance Resolution for Australian Mining Industry - Oxfam Australia (pdf)
Cote D'Ivoire: President for Life, and Then Some - The New York Times
In Midst of Massive Spill, Oil Industry Fighting Transparency and Accountability - Oxfam America
Leaked Oil Contracts in DRC Threaten Resource Wars and $10 Billion Rip-Off by British Company - Carbon Web
Contracts Confidential: Ending Secret Deals in the Extractive Industries
Contract transparency is sorely needed to improve the management of natural resource wealth. In a new report from RWI, authors Peter Rosenblum and Susan Maples delve into government and private sector objections to contract disclosure and make conclusions about what information may legitimately and reasonably be kept confidential, and how civil society institutions can better confront the challenge of secret deals.
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NEW TRANSLATION: Revenue Redistribution at the Local Level
Many resource-rich countries are attempting to compensate their producing regions through shares of resource revenues to be spent at the local level. In "Extractive Industries Revenues Distribution at the Sub-National Level," development economics consultant Matteo Morgandi presents a comparative analysis of international legislation for distribution of extractive revenues from across all levels of government. Prepared at the request of the Peruvian National Congress, the report studies the legislative practices of seven resource-rich countries to identify potential and address challenges. Please note that this report is now also available in Vietnamese.
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