Australia is a global mining giant. Our government and industry consider the country a leader in natural resource governance. However, with more and more Australian mining companies venturing overseas to countries vulnerable to the ‘resource curse’ – like the Democratic Republic of Congo, where immense natural resource wealth fuels a brutal conflict and most of its 70 million people survive on less than a dollar a day – this belief is being tested, particularly in relation to revenue transparency.
The Publish What You Pay Australia coalition is leading calls for Australia to live up to its self-proclaimed reputation as a world leader in good governance. As part of the global movement to tackle corruption in the extractives industries we are campaigning for the Australian Securities Exchange (ASX) to introduce payment disclosure rules that would require oil, gas and mining companies to publish what they pay governments on a country-by-country and project-by-project basis. This would align ASX requirements with the rules that are set to come in to force in the US as part of the Dodd-Frank Act and the EU through proposed amendments to the European Commission’s Accounting and Transparency Directives.
As part of our efforts we are working with investors who also want to see greater transparency in the extractives sector. By disclosing the size and nature of financial relationships with governments, companies can contribute to the global effort to end corruption and enable citizens of resource-rich countries to hold their governments to account for how resource revenues are spent. Companies benefit as improved disclosure will help mitigate the financial, political and reputational risks that threaten their long-term shareholder value.
The US and EU rules will apply to companies that make up around 55% of global market value of oil, gas and mining companies. The ASX represents a sizeable 5% of the global market, listing over 1,000 companies. Getting the ASX to bring in payment disclosure rules would help level the playing field for companies that act within the law and protect them from unfair competition and having their reputation tarnished by other companies’ which are complicit in corruption that contributes to conflict and poverty.
Publish What You Pay Australia is advocating for the ASX, which is currently consulting on reserves disclosure, to also consider greater revenue transparency in its review. As part of this effort we will draw on the findings of our recent report, The Australian Securities Exchange: extractive industry companies and payment disclosure, which examines the current level of disclosure by the top 100 extractive industry companies listed on the ASX.
With political and investor support for more transparency in the extractive industries and the demand for universal rules requiring payment disclosure growing ever stronger, the time for Australia to act is now.
By Claire Spoors