6 th Regional Meeting of CSO Coalitions on EITI US Dodd-Frank Act and UK/EU Advocacy

1. 6th Regional Meeting of CSO Coalitions on EITI US Dodd-Frank Act and UK/EU Advocacy Bishkek, 29 October 2010

2. The Approach • Support voluntary measures as a first step and encourage use of mandatory mechanisms. • View mandatory mechanisms as vital in order to • Avoid dependence on a moment of political will; • Entrench transparency in long-term • Make it real.

3. Strengths of EITI • Builds trust amongst stakeholders • Is a unique forum that allows civil society often unprecedented access to engage in policy with corporate and government decision-makers • Can lead to laws at the national level. Moves it away from voluntary and gives the initiative teeth.

4. EITI and International Corporate Regulation • Global momentum for transparency – until now EITI most prominent. • EITI often the only game in town (and supported!) • But...international regulation can strengthen EITI.

5. Where there is an EITI process • International regulations will... • Provide genuine timely disclosure of information (annual basis). EITI not clear on this. • Help provide disaggregated data (Azerbaijan, Kazakhstan, Kyrgyzstan) • Data would be more easily searchable and comparable. • Provide information on reserves, production volumes, production revenues, costs (IASB)

6. New US Law on Extractive Industries Payment Disclosure • “Lugar-Cardin” Provision 1504 in Dodd-Frank Act of 2010 (Wall Street Reform Act) • Signed into law by Pres. Obama, July 21 • Based on stand-alone “Energy Security through Transparency Act” – bipartisan support

8. New US Law on Extractive Industries Payment Disclosure • Multiple hearings / opportunities for industry input • Full White House backing • All US-listed EI companies must disclose payments to governments in SEC filings starting in 2012/13 • Country-by-country and project-by-project (more detail than required by EITI)

9. What it means • Covers around 90% of internationally operating oil companies – US and foreign • 8 of the world’s 10 largest mining companies • SEC rule-making process – April 17, 2011 deadline • Companies will have a year to implement • Company and investor support: • Newmont Mining • Investment firms – Calvert Asset Management • $10 billion worth of Chevron investors • voted for country-by-country disclosure

10. What it means • New tool to empower civil society in EI-dependent countries (online, tagged, searchable) • Disclosure will not wax/wane based on host government political will (Nigeria) • Complements EITI and is part of the package of measures needed • Azerbaijan: API Analysis - 11 companies will have to report; 13 will not.

11. Whitehouse Press Statement • “The United States is committed to working with other countries to ensure the implementation of similar disclosure requirements in other financial markets and will make this a priority in the year ahead.” • 23 July 2010

12. President Obama,, UN MDG Summit in New York • “…We now require oil, gas and mining companies that raise capital in the United States to disclose all payments they make to foreign governments. And it’s why I urged the G20 to put corruption on its agenda and make it harder for corrupt officials to steal from their own people and stifle their nation’s development.” • 22 September 2010

13. Other jurisdictions • Listing Requirements (Investors, Disproportionate amount of EI companies): • Hong Kong – new listing requirement, May 2010 • EU • UK • Others – Australia/Singapore, Canada/Norway, Shanghai?

14. EU Council Conclusions, 14 June • “Mobilisation of domestic resources for development through efficient and fair tax systems is crucial for sustainable growth, reducing aid dependency, poverty reduction, good governance and state building, including the provision of public services required to achieve the Millennium Development Goals (MDGs). Efficient and fair tax systems are integral to democracy, promote state legitimacy and strengthen the social contract and accountability between government and citizens.”

15. European Commission consultation on country-by-country reporting • On 26 October the European Commission launched a public consultation on country-by-country reporting: • Deadline 22 December 2010 • European Commission has committed to come forward with a Communication on this issue (scheduled for adoption in September 2011). Inputs to the consultation will have a direct impact on the Communication. • The consultation does not relate to any one legislative instrument at the EU level but the introductory text refers to the Transparency Directive, Accounting Directives, Regulations on the application of International Accounting Standards and the IASB’s project on developing a new IFRS for extractive activities. • The introductory text identifies two types of disclosure which could be considered in this context. • General CBC for multi-nationals • Transparency obligations for extractive industry companies (Dodd-Frank and IASB work on a new IFRS for extractives are identified)

16. United Kingdom • We are campaigning for the UK to mandate similar disclosure requirements to the US for companies listed on the London Stock Exchange(EDM, PM Office meeting, Soros/Cable) • 150 oil, gas and mining companies listed on the LSE / AIM: • 90 are UK companies, 60 are non-UK companies • Oil and Gas companies • 18 companies in total (4 are dual listed with SEC) • 4 are UK, 14 are non-UK • General mining • 77 companies in total (63 AIM, 14 main market) - 4 are dual listed with SEC • 50 are UK, 27 are non-UK • 3 of the 4 largest mining companies are UK companies that are also listed on the SEC (BHP Billiton, Rio Tinto, Anglo American • Gold mining • 55 companies in total (43 on AIM, 12 main market) - 4 are dual listed with SEC • 36 are UK, 19 are non-UK

17. Accounting Standards The International Accounting Standards Board is considering a rule change to make disclosure of payments to governments standard in the 110 countries which use IASB rules Truly level playing field Will supersede IFRS 6

18. Wrapping up • For countries with large capital markets there is plenty to do to improve transparency through regulation (listings, IAS, fighting tax havens, due diligence on capital flight).

19. For more information Visit the PWYP website www.publishwhatyoupay.org Joseph Williams jwilliams@publishwhatyoupay.org