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Energy firms told to say what they pay to foreign regimes

The Independent on Sunday: Energy firms told to say what they pay to foreign regimes

“Some of the UK’s biggest charities will tomorrow demand that oil, gas and mining companies be forced to reveal details of payments they make to regimes in developing countries.”: “A spokesman for Shell added that the oil giant also supported a voluntary regime. He cited the work of the Shell subsidiary which voluntarily disclosed payments of $3.3bn (£1.8bn) to the Nigerian government in 2004.”: “Corruption is known as the curse of the extraction industry.”

Sunday 18 Sept 2005

By Gavin Hinks

Published: 18 September 2005

Some of the UK’s biggest charities will tomorrow demand that oil, gas and mining companies be forced to reveal details of payments they make to regimes in developing countries.

The charities, including Save the Children, Cafod, Global Witness and Transparency International, believe greater disclosure would make it easier to fight corruption among the governments that play host to companies such as BP and Shell.

Under the Publish What You Pay coalition, the charities will call for a new accounting rule that makes it mandatory for energy and mining groups to disclose all the payments they make on a country-by-country basis. They believe this would allow stakeholders in the developing world to see the level of income made from the big companies, and how much is lost through state corruption.

A spokesman from the Department for International Development said a mandatory approach “would not work” as it would only cover listed companies and not indigenous state-owned businesses. A spokesman for Shell added that the oil giant also supported a voluntary regime. He cited the work of the Shell subsidiary which voluntarily disclosed payments of $3.3bn (£1.8bn) to the Nigerian government in 2004.

But the charities believe a mandatory rule is essential and will lobby to have it introduced. Richard Murphy, the author of a report to be published beside the charities’ demands, said: “Corruption is known as the curse of the extraction industry. The only way to tackle it is to ensure that the governments are held to account for the money they receive, and the only way to know how much they get is to have comprehensive information from the companies that are paying them.”

He believes more disclosure would also help investors in assessing the risk of backing oil, gas and mining companies.

Vanessa Herringshaw, at Save the Children’s economic affairs unit, said: “The extractive sector is under enormous scrutiny and shareholders are demanding greater accountability from corporations to protect their long-term financial interests.”

The charities want the new rule to become part of the International Financial Reporting Standards (IFRS), which became mandatory for all European listed companies at the beginning of this year.

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