International and domestic mining’s penchant for secrecy may finally be coming to an end, as fed-up world leaders demand more public scrutiny of miners and their transactions.
RENO (MINEWEB) – As UK Prime Minister David Cameron launched the G-8 Summit at Lough Erne in Northern Ireland, he stressed the summit themes of Tax, Trade and Transparency, specifically the improvement of transparency in the use of natural resources.
During a panel session with African leaders at the Open for Growth event Sunday, Cameron announced that the G8 and 15 developing countries have agreed to work together to make sure the world’s poorest people benefit from the natural resources of their various countries by improving the transparency of their extractive industries and land rights.
The G8 members and their partners are Burkina Faso (France), Colombia (EU), Ghana (UK), Guinea (USA), Mongolia (Germany), Burma/Myanmar (USA), Peru (Canada), and Tanzania (Canada). Ironically, Rio Tinto, which is currently selling mining operations and properties in a number of nations, is backing partnerships in Peru and Mongolia.
“Many developing countries have vast extractive resources like oil, gas and minerals but they are often sold at below market prices, or the money made is misused or poorly invested,” said the Prime Minister’s Office.
Partnerships were announced between G8 nations and eight developing countries which will encourage mining companies and countries to the new Extractive Industry Transparency Initiative—which requires companies to make public what they pay to governments and governments to disclose what they receive from mining companies for their resources.
These G8 partnerships will also stress “introducing stronger legal frameworks to regulate the extractives sector by introducing new laws that make EITI standards a legal requirement,” said the PM’s office.
The EITI organization noted that the initiative “will be a central element to discussions at the G8 Summit in Northern Ireland” today. Head of the EITI International Secretariat, Jonas Moberg, joined the G8 leaders plus the presidents from Burkina Faso, Ghana, Guinea, Liberia, Mexico, and Tanzania at the summit.
EITI is currently implemented by 39 resource rich nations, according to the organization.
In a news release, UK International Development Secretary Justine Greenberg said, “Lack of transparency is preventing developing countries from benefitting from their valuable resources. When they do not know how much their reserves are worth, people and governments have no way of knowing if they are getting a good deal for them.”
A number of mining transparency issues were announced immediately prior to the G8 summit including Canada’s Resource Revenue Transparency Working Group, comprised of the Mining Association of Canada, PDAC, Publish What You Pay-Canada and the Revenue Watch Institute.
In a statement, the working group declared, “Transparency is a critical tool for ensuring the more than one billion people in resource-rich countries reap the full benefits of their natural resources. Mandatory reporting standards require operating companies to publish the amounts they pay to government, disclosure that gives citizens the information they need to hold their governments accountable for the use of resource revenues.”
In the United States, disclosure requirements were enacted in 2010 under Section 1504 of the Dodd-Frank Act, which compels publicly-listed company to report on a country-by-country basis and per project basis. However, the American Petroleum Institute is suing the SEC, arguing these disclosures disadvantage U.S. companies against their foreign competitors.
Nevertheless, the EU Parliament passed disclosure legislation, which also applies to large, private companies this past week.
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