Estimated Completion, March 2018
May 8, 2017
Increasing global demand is driving new oil and gas discoveries. Over the next 20 years, it is expected that 90 per cent of production will come from developing countries. Yet many countries rich in oil and gas are home to some of the world’s poorest people. How can this happen? Too often, wealth stays in the hands of politicians and industry insiders. Revenues don’t get published. Payments made to governments to exploit resources remain secret. Bribery and embezzlement go unchecked.
Many oil and gas companies protect the identities of their equity holders and subsidiaries. This allows corrupt leaders to hide stolen funds unnoticed. Inadequate financial statements make it easy to disguise corrupt deals, and impossible for any of us to monitor them. Many oil and gas companies don’t publish information country by country. This allows them to hide the royalties, taxes and fees they pay. But without this information, we can’t hold governments to account for the money they receive.
At the Anti-Corruption Summit the UK pledged to “work with others to enhance company disclosure regarding payments to government for the sale of oil, gas and minerals, complementing our commitment to the Extractives Industries Transparency Initiative”. This commitment is also reiterated in the UK’s Open Government Partnership 2016-2018 National Action Plan, which explains:
“Over the last decade, the UK has led the way in encouraging the extractive sector to be more transparent, notably through a combination of voluntary reporting under the EITI and mandatory disclosure rules now present in the EU, Canada, the US and other countries. But despite this progress, a significant gap still exists. Payments from physical commodity trading companies to governments and state-owned enterprises for the sale of oil, gas and minerals – which account for the majority of total government revenues in countries such as Iraq, Libya, Angola and Nigeria – remain largely opaque. Whereas taxes, royalties and other payments are included within existing disclosure rules, payments from oil traders to governments (often $US billions/year) are not.”