Large oil, gas, diamond and logging companies will be obliged to disclose full information on all projects where payments to governmental authorities exceed a threshold of 100.000 Euros under new rules negotiated between MEPs and ministers from all 27 EU Member States last night.
The Leader of the Liberal Democrat delegation in the European Parliament, Fiona Hall MEP, who steered the legislation through the Development Committee and was a key MEP for the insertion of the county-by-country and project-by-project rule, commented:
“At last we have legislation in place which requires companies to publish what they pay. This marks a major step forward in the fight against corruption. Until now, many billions of euros every year have been siphoned off into private pockets instead of being spent on vital public services such as health and education.”
Sharon Bowles, who chairs the influential Economic and Monetary Affairs Committee and authored several amendments to the proposed directives,
“Multinational extractive companies can no longer get away with opacity as these 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 deal reached last night is an important first step on the road to commercial tax avoidance with mining and logging companies now having to own up, and pay up what they owe to other countries.
“I have been fighting for these kinds of disclosures since becoming an MEP, and have successfully campaigned for banks to report on a country level.”
Rebecca Taylor, the Liberal Democrat European spokesperson on legal affairs, said:
“We must now strive to achieve a global standard for all sectors, not just the industry sectors agreed last night. Local communities must be able to find out how much a company has paid their governments and fight for a fair share of profits and taxes.”
The new rules are part of the revised Accounting Directive and will ensure multinational extractive companies are more transparent in their accounting practices and will include:
• Mandatory financial reporting on a country and project level
• Mandatory reporting of any payment to a government over 100,000 EURO
• European Commission to look at extending reporting requirements to additional sectors within 3 years of the rules coming into effect
Note to editors:
The negotiated Accounting Directives seeks to improve transparency in financial reports from multinational companies making it a requirement for companies to publish in full any payments made to governments for each single country they operate in, also known as Country-by-Country Reporting.
The European Parliament and the Council will now have to adopt the negotiated texts separately before they can be signed into law.