Sparks fly as Blair calls for voluntary disclosure code

2 July 2003
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03 July 2003 | Robin Parker

A row has erupted between anti-corruption campaigners and leading oil, gas and mining firms over whether to make it compulsory for industries to disclose their payments to governments.

The battle broke out at an invitation-only event organised by the Department for International Development in London last month, attended by more than 100 politicians, high-level businesspeople and non-governmental organisations.

Prime minister Tony Blair launched an action plan for the government-led extractive industries transparency initiative (EITI), a voluntary scheme that asks governments and industrial bodies to publish details of payments such as taxes and royalties.

The plan aims to adopt country-by-country reporting procedures to ensure transparency both in company payments and in government revenues. Blair pledged £1 million in technical help for any pilot scheme.

ChevronTexaco and ExxonMobil led calls to keep the EITI a voluntary scheme, claiming it could lead to competitive pressures and conflicts with contract confidentiality.

Their approach is at odds with many anti-corruption campaigners, who are calling for mandatory reporting of all payments, and with rival Shell, which has just published details of £630 million in payments to the Nigerian government last year.

In his opening address, Blair spelt out the need for a partnership approach between oil, gas and mining companies and governments to eradicate corruption.

"A lack of transparency undermines public confidence in the legitimacy of the state. It should help companies to reduce reputational risk, address the concerns of shareholders and help to manage the risks of long-term investment," he said.

Politicians from Ghana, Trinidad, Norway and the US fully support the "principle of agreement" and the action plan for the initiative, which was launched last year at the World Summit on Sustainable Development in Johannesburg.

Nigeria, Sao Tomé and Angola said they would publish all of their payments.

But members of the 130-member Publish What You Pay coalition want the principles to be revised to force all extractive companies to commit to them.

They say the world's poorest countries will continue to suffer on economic and social terms unless all companies commit to fully open trade relationships.

Mike Aaronson, director-general of Save The Children, said: "The voluntary approach will fail to have a significant effect upon poverty because it will not create a level playing field and may put some companies at a competitive disadvantage."

SMjul2003

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