New Canadian initiative to improve transparency in the extractive sector
This is a guest blog from Claire Woodside, Director, Publish What You Pay-Canada.
Recent years have seen dramatic global improvement to transparency in the extractive sector. Last month the Securities and Exchange Commission in the US issued rules requiring extractive companies to publish the money they pay to governments and Europe is set to do the same in the fall. While the US and the EU demonstrate global leadership in the transparency movement, one critical country has yet to follow suit – Canada.
Although Canada is a supporter of the Extractive Industries Transparency Initiative (EITI), compared to its OECD colleagues it has made little effort to improve transparency at home. This stands in contrast to the efforts in the EU to increase the transparency of European companies and those in the US where the government has not only committed to implement the EITI (not just support it) but has also passed new regulations that will improve the transparency of a plethora of mining, oil, and gas companies. In an effort to see Canada join the international efforts to improve disclosure, on September 6th, 2012 Publish What You Pay (PWYP)-Canada, the Revenue Watch Institute, the Mining Association of Canada and the Prospectors and Developers Association of Canada announced the launch of the Resource Revenue Transparency Working Group.
The four parties to this collaboration have committed to develop a joint framework on mandatory disclosure of extractive company payments to governments. Upon completion the Working Group will present the framework to the Canadian Government, provincial governments and/or securities regulators for implementation.
Resource rich developing countries around the world continue to suffer from the ‘resource curse,’ where resource revenues fuel corruption and conflict rather than sustainable economic development. More than 1.5 billion people live on less than $2 dollars/day in countries considered to be ‘rich’ in natural resources. Improving revenue disclosure is an important step towards avoiding the ‘resource curse.’ Resource revenue transparency equips citizens with the information needed to combat corruption and hold their governments accountable for responsible resource management.
Improving transparency in Canada is of global importance. Canada is home to about 60% of the world’s publicly listed mining companies and over a third of the world’s oil and gas companies. Moreover, over the last five years 80% of the world’s global mining transactions have taken place on Canadian exchanges. With operations spanning the globe (1000 Canadian exploration companies are active in over 100 countries), improving disclosure in Canada will have a large impact both at home and abroad.
Through collaboration between civil society and industry, the newly established Working Group hopes to capitalize on the international momentum supporting stronger disclosure requirements to develop a framework that would mandate country-by-country and project-by–project disclosure in the extractive sector in Canada. With the hopes of producing a draft framework by December 2012 and examining opportunities to integrate the framework into legislation or regulation throughout 2013, PWYP-Canada hopes to see Canada join counterparts in the global movement to improve extractive sector transparency.
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