There are days when I’m particularly proud to be a member of the Commission, and today is one of those. We adopted the revision of the Transparency and Accounting Directives to insert some disposals regarding disclosure of all payments done by EU extractive and forestry industry in Africa. This is a substantial change as it will oblige all multinationals active in oil, gas, mining and forestry in Africa to be more transparent – which can prevent some types of tax evasion – and encourage better governance by countries of their natural resources. African soil is rich and it is up to African citizens to enjoy the main benefits of it. At the end of the day, those countries should mobilise enough fiscal resources to be independent of EU aid one day.
The proposal put on the table by EU Commissioner Michel Barnier is very ambitious, as it includes extractive and forestry sectors, going beyond the US Dodd-Franck act. It proposes to introduce a new obligation for listed and large non-listed extractive and logging companies to report all material payments to governments on a country and project basis, when these payments have been attributed to a specific project. Civil society and all stakeholders will therefore be able to keep governments accountable and exercise their monitoring role.
The Commission had publicly provided support to this initiative over the last year, with call from President Barroso in May 2010 ahead of the G20 meeting in Deauville to set in place such regulation.
On my side, I have been fully supportive of the proposal, as this is “policy for coherence for development” in action!
I pushed for regular review of the system within 5 years of coming into force, taking into account inter alia, international developments and the competitiveness of EU industry. I also made sure the EU would promote such regulation in all international forum, summits and technical committees to encourage all donors to adopt similar measures.
I think this is also a way to reassure NGOs on the fact that we don’t have hidden agenda as far as EU private sector is concerned: they are unavoidable actors to mobilise resources, to create jobs, and ensure the growth of countries. But we want to make sure they comply with clear rules in favour of developing countries’ interests.
I now hope the European Parliament and the Council will support the Commission’s proposals so that it can enter into force as soon as possible.
Below you can read a joint statement issued with Commissioner Barnier:
Statement from EU Commissioner for Internal Market and Financial services, Michel Barnier and EU Commissioner for Development, Andris Piebalgs
“During the African Union Summit with African Ministers of Finance last January in Addis Abeba, we committed to lead on the fight for more transparency of European extractive and forestry industries active in Africa. Today, by adopting legislative proposals for the transparency and accounting directives, requiring the disclosure of payments to governments on a country and project basis by listed and large non-listed companies with activities in these sectors, the Commission delivers on its commitments.
These new measures will improve sustainable business among multinationals active in the oil, gas, mining or logging sectors. It will play a groundbreaking role in the better management of natural resources and in the increase of domestic fiscal resources available to provide basic social services to the citizens. This new legislation will be a strong contribution to the Agenda for Change of European
Development policy which aims at equipping Developing countries with the tools to foster sustainable and inclusive growth.
Today, the Commission establishes itself as an avant-garde in promoting transparency and goes well beyond the US Dodd-Frank act, putting the interest of developing countries at the forefront of this European domestic legislation. This will help to achieve a new step in the quality of our relations with Africa, based on mutual accountability and transparency.
We will now continue to taking the lead on the international agenda and promoting country-by-country reporting in global forum to ensure a coherent level playing field”.