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Legislation requiring extractives industry companies to report the payments they make to governments in return for permission to extract resources has been passed in the US.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama last month, includes among its 848 pages a requirement that oil, gas and minerals companies produce annual reports on all payments to governments relating to the allocation of resources.
The information must be organized by payment type and by every individual government, the latter being a recent key demand of pressure groups.
Interactive data from the annual report will have to be supplied, with ‘electronic tags’, on such factors as currency, business segment and ‘other information in the public interest’. The precise disclosure rules are yet to be written, but the information is expected to be included in company reports by 2012.
The legislation will apply not just to US companies but to all businesses listed with the US Securities and Exchange Commission, thus affecting 29 of the world’s 32 largest international oil companies.
Global Witness said the new law was ‘amazing’, while the Publish What You Pay pressure group, which has called for payment transparency for years, has also welcomed the legislation.
Radhika Sarin, the group’s international co-ordinator, said: ‘With this far-reaching new law, citizens now have a reliable tool to ensure the wealth created by natural resource extraction is used for essential social services such as health and education, and economic development opportunities.
‘We now need to see similar action in other countries including the UK, Germany, Canada and Australia.’
The US-based non-profit Revenue Watch said the new law represents ‘a major step forward in protecting natural resource revenues and safeguarding the interests of citizens in resource-rich countries’.
Around 50 companies and 20 countries have already disclosed $68billion-worth of revenues under the Extractive Industries Transparency Initiative (EITI), which is referred to in the new legislation.
However, the EITI is a voluntary initiative and progress has often been patchy. The EITI secretariat revealed last month that most of the countries that have signed up to the initiative have not provided the necessary validation of EITI processes by the deadlines they have been set.
The passage of the American legislation came as the International Accounting Standards Board, which is responsible for developing global financial reporting standards, closed consultation on whether and how it should proceed with its proposals for an international accounting standard for the extractives sector. The IASB received 136 submissions from various sources.
If it decides to go ahead, a final standard would probably take three years to develop.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama last month, includes among its 848 pages a requirement that oil, gas and minerals companies produce annual reports on all payments to governments relating to the allocation of resources.
The information must be organized by payment type and by every individual government, the latter being a recent key demand of pressure groups.
Interactive data from the annual report will have to be supplied, with ‘electronic tags’, on such factors as currency, business segment and ‘other information in the public interest’. The precise disclosure rules are yet to be written, but the information is expected to be included in company reports by 2012.
The legislation will apply not just to US companies but to all businesses listed with the US Securities and Exchange Commission, thus affecting 29 of the world’s 32 largest international oil companies.
Global Witness said the new law was ‘amazing’, while the Publish What You Pay pressure group, which has called for payment transparency for years, has also welcomed the legislation.
Radhika Sarin, the group’s international co-ordinator, said: ‘With this far-reaching new law, citizens now have a reliable tool to ensure the wealth created by natural resource extraction is used for essential social services such as health and education, and economic development opportunities.
‘We now need to see similar action in other countries including the UK, Germany, Canada and Australia.’
The US-based non-profit Revenue Watch said the new law represents ‘a major step forward in protecting natural resource revenues and safeguarding the interests of citizens in resource-rich countries’.
Around 50 companies and 20 countries have already disclosed $68billion-worth of revenues under the Extractive Industries Transparency Initiative (EITI), which is referred to in the new legislation.
However, the EITI is a voluntary initiative and progress has often been patchy. The EITI secretariat revealed last month that most of the countries that have signed up to the initiative have not provided the necessary validation of EITI processes by the deadlines they have been set.
The passage of the American legislation came as the International Accounting Standards Board, which is responsible for developing global financial reporting standards, closed consultation on whether and how it should proceed with its proposals for an international accounting standard for the extractives sector. The IASB received 136 submissions from various sources.
If it decides to go ahead, a final standard would probably take three years to develop.
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