The European Parliament’s Economic and Monetary Affairs Committee has today voted through amendments to the EU’s Transparency and Accounting Directives, making it harder for big multinational companies to hide profits made in the developing world.
Currently, multinational companies only need to submit one set of consolidated accounts despite often having hundreds of subsidiaries – this has allowed some multinationals to hide details of their business activities abroad and also avoid paying taxes to host countries.
After much political negotiation, the ECON committee voted for all sectors to disclose payments to host governments on a country by country and project by project basis, reports of which will be fully audited.
Speaking from Brussels today, committee chair Sharon Bowles MEP, said:
“Multinationals can no longer get away with opacity. New rules on country by country and project by project reporting will shine a light on the darkest corners of corporate activity in the developing world to the benefit of civil society, the importance of which was stressed by Aung San Suu Kyi in her Nobel Peace Prize acceptance speech last week.
“Whether extractive industries, such as oil drilling and mineral mining, or high-tech industries, such as engineering and telecommunications, multinationals operating abroad will have to be more transparent in their business dealings.
“I have pushed for the two proposals to cover all industries, with all of the extra disclosures to be fully audited – thereby ensuring binding legality. I am very pleased that my committee has today voted for the same.”
Excerpt from Aung Sun Suu Kyi’s Nobel Peace Prize acceptance speech, 16/06/12
“We can say that reform is effective only if the lives of the people are improved and in this regard, the international community has a vital role to play. Development and humanitarian aid, bi-lateral agreements and investments should be coordinated and calibrated to ensure that these will promote social, political and economic growth that is balanced and sustainable.”