A new working group of national-level mining and exploration associations and transparency-focused NGOs announced today that it has signed a Memorandum of Understanding to improve Canada's transparency regime as it relates to extractive company payments to governments.
The Resource Revenue Transparency Working Group includes the Mining Association of Canada (MAC), the Prospectors and Developers Association of Canada (PDAC), Publish What you Pay Canada (PWYP-Canada), and the Revenue Watch Institute (RWI).
The group aims to develop a framework for the disclosure of payments to governments for Canadian oil and mining companies operating domestically and internationally by June 2013. Once complete, the working group will make policy recommendations to federal government policymakers and/or provincial security regulators for the Canadian adoption of mandatory disclosure requirements based on the framework.
"This is a groundbreaking collaboration between the mining industry and NGOs that will likely contribute to new financial reporting requirements for Canadian mining, oil and gas companies," said Pierre Gratton, MAC's President and CEO. "The goal of the framework is to provide citizens of resource-rich countries with the tools they need to achieve accountable, responsible and sound management of natural resources."
The working group's establishment comes at a time of great demand from communities and investors for mining companies to be more transparent in their payments to governments. "This information will help assure communities that they are receiving appropriate benefits from both mining operations and governments, as well as reduce instances of corruption and bribery," said Ross Gallinger, PDAC's Executive Director. "More transparent payment information also puts investors in a better position to analyze the financial and political risks associated with development."
A number of jurisdictions are moving toward mandatory disclosure of payments to governments. On August 22, 2012, the U.S. adopted new reporting rules created under the Dodd-Frank Act that require publicly listed oil, gas and mining companies to disclose payments to governments on a country-by-country and project-by-project basis.
There is currently no such mandatory framework in place in Canada; however, many Canadian mining companies participate in the Extractive Industries Transparency Initiative (EITI), a voluntary reporting standard adopted by more than 35 countries to date.
"Despite the importance of initiatives like the EITI, mandatory disclosure leads to more consistent and reliable data that citizens impacted by resource development need to hold their governments accountable. Increasing transparency will help resource-rich countries reduce corruption, improve governance and ultimately escape the resource curse," said Claire Woodside, Director, PWYP-Canada.
The framework will be developed with current reporting challenges in mind. "Current disclosure regimes don't produce the same information across exchanges and for all companies," adds Antoine Heuty, RWI's Deputy Director. "Ideally, Canada's response will improve upon existing reporting standards and create a framework that will level the playing field by holding all companies to the same high standard of reporting, regardless of where they operate."
About the Working Group Members
The Mining Association of Canada is the national organization for the Canadian mining industry. Its members account for most of Canada's production of base and precious metals, uranium, diamonds, metallurgical coal, mined oil sands and industrial minerals and are actively engaged in mineral exploration, mining, smelting, refining and semi-fabrication. www.mining.ca.
The Prospectors and Developers Association of Canada (PDAC) is a national association representing over 10,000 individual and corporate members. The PDAC encourages the highest standards of technical, environmental, safety and social practices in Canada and internationally. www.pdac.ca.
The Revenue Watch Institute is an international non-profit policy institute that promotes the effective, transparent and accountable management of oil, gas and mineral resources for the public good: www.revenuewatch.org.
PWYP-Canada is the Canadian coalition of Publish What You Pay, a global network of over 650 civil society organizations united in their call for oil, gas and mining revenues to form the basis for development and improve the lives of citizens in resource-rich countries: www.pwyp.ca,www.publishwhatyoupay.org.