The World is Watching

Today Tearfund’s Unearth the Truth campaign has joined forces with Friends of the Earth and Publish What You Pay members to publish an advert in the Financial Times reminding European leader that the world is watching.

Publish What You Pay advert appearing in the Financial Times 13 Nov 2012

The world is watching to see if the European Union will seize this historic opportunity[1] to pass new transparency laws for oil, gas and mining companies. If these laws are passed citizens will be able to track key financial information; a significant first step in empowering them in holding their governments to account on how that money is spent.

Strong rules have already been passed in the United States through section 1504 of the Dodd-Frank Act.

It is now time for Europe to play its part and we need rules which are at least as strong as those in the US. This means project by project reporting, “project” defined as a legal agreement, a low disclosure threshold, and no reporting exemptions for countries.

But this EU law is still under pressure from industry lobbyists. Some companies want loopholes in the legislation to allow country governments to continue secretive relationships with companies.

We need a law that empowers poorer communities to know how much their leaders are making from oil, gas and mining contracts in their country.

The world is watching.

We hope and pray that European leaders deliver.

[1] On Wednesday, ambassadors from EU member states will meet to agree their position before continuing crucial negotiations with the European Parliament later this month. It is possible a deal will be reached by the end of the year.

Has the race for transparency entered its final lap?

For me sport is all about those final moments when I’m on the edge of my seat, not knowing who’s going to win. That point in a race where things really get exciting.

Mo Farah 5000m Olympic Final

Mo Farah leading in the 5000m men’s final at the 2012 Summer Olympics.

That’s why I’ve loved watching Mo Farah this summer win his two gold medals. In both races I’ve been on the edge of my seat willing him on, not knowing what will happen, as he’s put himself in the perfect position at the final bell to go on and win the race.

In the same way, that’s why I’m so excited about yesterday’s decisions inside the European Parliament.

For months I’ve not known how much real support among politicians there’s been for Unearth the Truth. I’ve not known if the US would finally implement its own transparency laws. I’ve not known if Members of the European Parliament (MEPs) really do want transparency or if their support would melt away under the pressure of extractive industry lobbyists.

But yesterday was a final bell moment for our campaign.

MEPs on the key negotiating committee, the Legal Affairs committee, have given a resounding yes in support of pretty much all of the demands of Tearfund’s Unearth the Truth campaign (read Bishop Munga’s blog to find out more).

These are demands which, if fully implemented, will contribute to poor communities being able to hold their leaders to account and release vital money to pay for things like schools and medicine.

Tearfund/Jay Butcher

Unearth the truth campaigners hand in actions to the UK Treasury – October 2011.

This final lap moment is what excites me as a campaigner.

This is what motivates me to prepare campaign actions and emails, motivates me to organise MEPs meetings for Tearfund supporters, motivates me to dress up as a miner and have my photo taken at 6am on Westminster Bridge.

This race isn’t over yet, but we have put ourselves in a great position to go on and win!

Andy Wilson
Senior Campaigns Officer, Tearfund
——

The only stumbling block remaining to the campaign is resistance by the European Council and the Commission to greater transparency – under pressure from businesses who still want to keep certain payments hidden.

Join Tearfund’s Unearth the Truth campaign in making sure the Council now plays their part. Call on new UK Business, Innovation and Skills Minister Jo Swinson MP to do all she can to get the Council to support greater transparency in the oil, gas and mining industry. Click here to call on her to act now.

European leaders must take this golden opportunity to tackle corruption

Bishop Munga speaking at the European Parliament

By Bishop Stephen Munga

I came to the European Parliament in March this year as part of Tearfund’s Unearth the Truth campaign to ask MEPs to pass strong transparency legislation.

Today they sent a very clear message in the vote on the Accounting and Transparency Directives. The Legal Affairs Committee, under leadership of MEPs Klaus-Heiner Lehne and Arlene McCarthy, has insisted that project level reporting by extractive industry companies is the only way to produce meaningful information. Their proposed payment threshold of 80,000 euros is also welcome, as is the removal of all possible exemptions. This means that Europe is matching the US and we are moving towards a global standard. We are entering a new season as the benefits of transparency are now recognised at a global level.

Now the only stumbling block to effective legislation being passed in Europe is resistance by the Council and the Commission – under pressure from businesses who still want to keep certain payments hidden from us. This must not be allowed to happen. Commission and Council proposals still exclude project level payments and have payment thresholds at 500,000 euros that would produce meaningless information. Incredibly, they still entertain the idea of exemptions, allowing corruption in through the back door. Over the next few months as they come to a final position, they have the chance to change this and show they are serious about leading the way on transparency.

The information that is produced by extractive companies reporting their payments at project level will enable the communities I work with to know what money is being paid for the resources extracted from their land, and to be able to hold the district and national governments accountable for their use.

In the rural areas, Tanzanian citizens already have experience of monitoring government expenditure on issues such as health and education and we have seen a reduction in funds that have been diverted, and even some stolen funds that have been recovered. This means that more resources are available for vital development projects.

I call on European leaders to pass legislation that will support our efforts to empower citizens and not to miss this golden opportunity to work with us to combat corruption.

TrustLaw interviewed Bishop Munga in March about his campaign to increase resource transparency in Tanzania and the rest of the world. Click here for the full interview.

Bishop Stephen Munga is a member of the working group of the Tanzania Extractive Industries Transparency Initiative and chair of the Interfaith Standing Committee of Tanzania. He travelled to the EU with Tearfund as part of the Unearth the Truth campaign.

Originally posted on Reuters Trust Law, http://www.trust.org/trustlaw/blogs/anti-corruption-views/european-leaders-must-take-this-golden-opportunity-to-tackle-corruption

A bright day in the fight against corruption

New transparency rules published by the US Securities and Exchange Commission (SEC) yesterday are a significant step forward in the fight against corruption and will benefit many communities where Tearfund works. We welcome this move, although we all need more time to plough through the 232 page document.

The Dodd Frank Act (Section 1504) will mean that communities will have information in their hands about payments by companies to their governments for oil, gas and minerals that have been taken out of their ground. This will help them to seek greater accountability and to make sure that it is used for the most pressing needs such as education and health services.

In Tanzania, where vast reserves of gas have recently been discovered, and could potentially bring in billions of pounds of government revenue, these rules will enable ordinary citizens to know how much US-listed companies are paying to their government. Furthermore, with similar legislation proposed by the EU and pressure for countries such as Canada and Australia to follow suit, most extractive industry companies in Tanzania will soon need to provide such information.

On the ground, work by Tearfund partner CCT has shown that when villagers have the right information about projects that directly impact on their lives, they will mobilise and make sure the money ends up where it should. This is positive both for greater citizen participation and strengthening of democracy as well as for combating corruption and using vital resources for development.

Big step forward, but what’s in a project?

Although delayed by two years, these rules are a historic move towards greater transparency in both industry and government.

They require companies to report on payments on a country-by-country and project-by-project basis and include a wide range of payments such as taxes, royalties, production entitlements and bonuses. They also require companies to report on all payments above $100,000 and have resisted company pressure to include any exemptions (p162). This will make a significant difference.

Although we are concerned by the lack of clear definition of ‘project’ – something that could cause confusion at the time of reporting – the rules nevertheless provide clear guidance that equates ‘project’ with contracts, arguing that “contract generally defines the basis for determining the payments… that would be associated with a particular ‘project’” (p86). This point should not be overlooked, especially as in its reasoning the SEC flatly rejects company arguments that projects are defined as countries, geographical basins or simply internal reporting units.

The EU must match the US and go further

The EU has the chance to match the US regulations and to go further, particularly by defining project more clearly and by providing a lower level of materiality that will provide more meaningful information to communities.

EU Transparency and Accounting Directives are on track to be agreed by the end of the year and could pave the way for a global transparency standard and show EU leadership and commitment to development and responsible business.

The priority is for the EU legislation to define project as based on lease, licence, agreement or other form of contract that gives rise to payments to governments. This will show where the money has come from and where it has gone to.

There should be no exemptions (as there currently are in the Commission proposal) and the EU should consider a materiality threshold of £10,000, so that all relevant payments are reported.

The UK government has taken a lead in Europe and must continue to do so. MEPs are on the whole in favour of strong legislation, but there has been pressure from companies and from some other governments to water it down. This must not be allowed to happen or communities will continue to see increased natural resource extraction with few benefits.

Cyprus, help bring truth into focus

‘1CY’ read the number plate of the Cypriot Ambassador’s car as he arrived at a photo exhibition marking the start of Cyprus’ Presidency of the European Union; and icy, unfortunately, aptly describes the initial reception we received.

Arriving dressed as miners with a photo exhibition of our own, last night we wanted to help Cypriots see that secrecy and corruption is diverting £3,000 a second away from poor communities. While some guests didn’t want to hear our message, most were more than happy to take our dove shaped flyers (the national symbol of Cyprus) explaining the Unearth the Truth campaign – who, after all, can say no to a peace dove?

But why were we there?

Today half the world’s people live in countries rich in oil, gas and minerals.

Yet secrecy and corruption often results in this wealth going missing and not benefiting the citizens of those countries, especially those living in poverty.

Cyprus, in its Presidency of the EU, has an influential role to play in steering negotiations on important new EU Transparency and Accountability Directives that could bring an end to this corruption.

Cyprus can help to ensure that transparency directives are strong and robust and ensure that extractive companies are legally obligated to publish what they pay to all governments for access to oil, gas and minerals. This would provide poor communities with the information they need to hold their own leaders to account.

Tearfund campaigners call on the Cypriot Presidency of the EU to bring truth into focus

Picture what it would be like if that money, instead of going into the pockets of a few, was going into projects to fund schools, hospitals and infrastructure in the communities neighbouring the very quarries where billions of pounds worth of oil, gas and minerals are extracted every year.

This is what we want to see, and Cyprus, during their EU Presidency, have the influence to help make this a reality.

Cyprus, join us in unearthing the truth on corruption

[Written by Rachel Mander, Tearfund campaigner]

Anti-corruption campaigning, a simple truth?

This week’s Parliament Magazine (page 55-57) includes an illustration commissioned by Tearfund highlighting the steps needed to unearth the truth on corruption.

Unearth the truth illustration

Secrecy and corruption cost Africa a staggering £3,000 a second. Find out how we can turn this around…

Targeted at MEPs, the illustration is a simplified summary of our theory of change and shows why we believe implementing effective transparency laws will turn oil, gas and mineral wealth from a curse to a blessing.

But surely it’s more complex?

In many ways of course it is. Life is always more complex than theory and we know that the factors which contribute to poverty and corruption are multi-faceted.

But people need ways of visualising the change we are calling for before going deeper.

This is why we have thought through the tangible role transparency can play in helping communities to benefit from the wealth beneath their feet – and communicated this clearly.

As Extractives Industry Transparency Initiative Regional Director for Latin America, Francisco Paris states
“Disclosing payments and revenues from mineral exploitation is not a panacea for poverty and resource wealth mismanagement, but it is a necessary condition to tackle the malaise of squandering resources that should be benefiting all.”

Do simple truths work?

Our illustration is a simplified way of representing a complex problem, and of highlighting the change Tearfund’s Unearth the Truth campaign is calling for.

But does it resonate with you? Is it a useful tool to help your understanding or is it too simplistic? How would you do it differently? Please do leave your comments to let us know.

Will extractive companies learn to ‘love truth’?

When I was a kid I hated Love Hearts sweets. Not only did I think they were too girly, they also tasted horrible! 

Tearfund, ONE and CAFOD campaigners call on BIS Minister Norman Lamb MP to 'Love Truth'

So I never expected, twenty years later, to be dressed as a miner the day before valentine’s – together with ONE and Cafod – carrying a huge Love Heart sweet through Whitehall calling on new BIS minister Norman Lamb MP to ‘Love Truth’ in the extractive industry.

But then that’s just one of the joys of being a campaigner rather than a policy officer, getting up at the crack of dawn, donning a fancy dress costume, calling on our leaders to tackle the injustice of corruption.

And why were we calling on Mr Lamb to ‘Love Truth’? Well it turns out that two thirds the world’s poorest people live in countries rich in oil, gas and minerals. Natural resources that should be being used to lift millions of people out of poverty.

But, due to secrecy and corruption, poorer communities are not benefiting from the wealth beneath their feet.

In Africa alone it’s estimated that a quarter of the continent’s annual income goes missing due to corruption. That’s approximately $148bn  a year, more than enough money to achieve all of the Millennium Development Goals on that continent.

But there is something we can all do about this!

Oil, mining and gas companies listed on European Union stock exchanges are valued at over €2 trillion, making the EU the second largest home of extractive companies in the world after the US.

European leaders are already discussing whether to implement new accounting and transparency laws. Now is the time for our MEPs, the Danish Presidency, and newly promoted Norman Lamb MP to show wisdom and leadership and act.

The next six months are critical to this campaign. Take action at www.tearfund.org/unearth and stand with poorer communities seeking to unearth the truth on corruption.

And, if you’re more policy focussed, you can always read our latest policy report on the campaign here.