Oxfam applauds the European Parliament’s hard fought victory for transparency in the extractives sector

Oxfam welcomes today’s European Parliament vote in favor of legislation which will oblige EU-listed and non-listed big oil, gas, mining and logging companies to declare payments they make in resource-rich countries.

Reacting to the vote, Catherine Olier, Oxfam’s EU policy advisor, said:

“This is a critical step forward in the fight against corruption and tax dodging that will help ordinary people in the developing world harness their countries’ natural resource wealth and lift themselves out of poverty. The EU should now extend transparency standards required for banks to all large companies in all sectors. Only by doing so will Europe ensure that dishonest tax practices are laid bare for all to see.”

“At a time when transparency rules in the US are under groundless attack by oil companies, the EU has set a bold example which now needs to be matched by the likes of Australia and Canada. Next week’s G8 and the upcoming G20 summit give other countries the chance to follow the EU and US’s lead and open a new chapter on tax justice.”

Notes to Editors

• Today’s vote follows an informal agreement reached with EU member states and the European Parliament on April 9th.  Moreover, the EU has recently reached a political agreement on a new Capital Requirements Directive that will require banks to report from January 2015 onwards their profit or loss before tax, taxes, turnover, number of employees and public subsidies received for each country where they operate.

• Yesterday in the EP, Michel Barnier, EU Commissioner for Internal Market and Services, declared that big companies in all sectors should state how much tax they pay to whom and where. Oxfam welcomes this move, and calls for changes to the European Commission’s proposal on non-financial reporting to include transparency reporting along the lines proposed for banks.

• In July 2010 US President Obama signed into law the Dodd-Frank Wall Street Reform Act which contains a provision requiring all oil, gas and mining companies reporting to the US Securities and Exchange Commission (SEC). Starting in 2014, companies will disclose taxes and other payments on a country-by-country and project-by-project basis. The American Petroleum Institute has sued the SEC to try to prevent disclosure. Other countries, such as Australia, Canada and Switzerland are looking to adopt similar transparency legislation.

• In 2008 Africa’s oil, gas and minerals exports were worth roughly 9 times the value of international aid to the continent ($393 billion vs. $44 billion). And yet many countries have failed to turn natural resource wealth into lasting benefits. For example, only half of the mining companies paid corporate tax in Zambia in 2008. (See Eurodad report, Exposing the lost billions)