Sunday, 4 May 2008

PWYP: Companies must go beyond their rhetoric

In the wake of a recent report published by Transparency International, showing that leading oil and gas companies should be doing more to fight corruption and poverty in resource-rich countries, Publish What You Pay calls on companies to publicly disclose how much money they pay to governments for the right to extract. “The report’s key findings and recommendations reaffirm longstanding demands by PWYP for greater transparency of revenue flows earned by resource-rich governments from extractive industries. Without this information, citizens cannot track how the revenues are being reinvested back in the country,” said Radhika Sarin, International Coordinator of PWYP.

In the 2008 Report on Revenue Transparency of Oil and Gas Companies, TI, a key member of the PWYP coalition, evaluates how 42 international and national oil and gas companies publicly report their operations in a total of 21 countries. Of those companies, only a third are categorised in the findings as ‘high’ performers and only a selected group report on a country-by-country basis, a reporting format identified as best practice. “The fact that leading oil and gas companies can retain competitive advantage while still reporting their operations on a country-by-country basis sets a standard for others to follow. It's time for companies to go beyond their rhetoric and start disclosing payments in the disaggregated format that citizens want," said Sarin.

The report recommends that:
* Companies should proactively publish what they pay to governments on a country-by-country basis;
* Governments, stock exchanges and regulatory agencies should urgently consider mandatory reporting for companies operating in-country and abroad;
* Governments from oil and gas producing countries should introduce legislation mandating revenue transparency by all companies operating in their territories;
* Regulatory agencies and companies should agree to publish information in a uniform and accessible format.

The recommendations show that encouraging companies to report their revenues transparently is not the only mechanism to achieving the overall goal of responsible government spending. Governments in both resource-rich countries and those who are home to oil and gas companies, in addition to regulatory agencies should introduce legislation mandating revenue transparency by all companies. “This report is an invaluable advocacy tool. PWYP coalitions around the world will be using the findings to challenge companies, governments and regulatory authorities over their responsibility to reduce corruption and in turn poverty,” said Ingilab Ahmadov, Director of the Public Finance Monitoring Center in Azerbaijan.

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