International Accounting Reform Represents "Rare Alignment" of Finance and Humanitarian Interests
Away from the political controversies over international policy and mismanagement of extractive revenues, the International Accounting Standards Board (IASB) plays a quiet but pivotal role in steering the transparency of the energy industry. This is the body that determines what a company has to disclose in its annual financial statements.
With consultation and input from Revenue Watch, the Publish What You Pay Coalition, and other groups, the IASB has been conducting research for new and revamped accounting guidelines for extractive activity. The Board released a working draft of its proposals in August, which addresses important measures such as the requirement that companies declare financial information on a country-by-country basis.
In an interview with Accountancy Age magazine, Revenue Watch Capacity Building Director Vanessa Herringsaw said, "Investors want to see this sort of disaggregated information, they want to see the risk profile and part of the risk profile comes from your exposure in difficult countries."
Accountancy Age calls the IASB inquiry "a rare alignment of goals in the finance and humanitarian communities," but the magazine adds that the IASB's aims "are not primarily humanitarian. The organization is exploring whether the new standard would result in reputation risk and country-specific investment risk being flagged in companies' financial statements."
The proposed accounting reforms would affect companies in over 100 countries, including all of Europe, South Africa, Australia, Russia and China, setting new guidelines for reporting activity not only in their home countries, but in all countries where they operate.
As Revenue Watch and its allies prepare responses to the final IASB "Discussion Draft," due in early 2010, supporters of transparency and improved management of resource wealth should continue to send comments and recommendations to the Board. To learn how to get involved, please contact Vanessa Herringshaw of RWI (vherringshaw@revenuewatch.org) or Joseph Williams of PWYP (jwilliams@publishwhatyoupay.org), or learn more at the links below.
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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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