Clare Short: disclosure requirements complement EITI

Wednesday 22 August the United States Securities and Exchange Commission will announce the rules for how companies listed at US stock exchanges must comply with the disclosure requirements in Section 1504 of the Dodd-Frank Wall Street Reform Act. On the eve of the announcement EITI Chair, Clare Short, commented:

There are different opinions amongst EITI stakeholders about these listing requirements and of course we don’t yet know precisely what the SEC regulation will provide, but I want to take this opportunity to reiterate my crucial argument that the proposed SEC and EU transparency requirements are complementary to, and not in conflict with, the EITI transparency requirements.

 

Let us be clear, the extraction of oil, gas, and minerals is still failing to bring the benefits to ordinary citizens that it should, particularly in the poorer countries. Implementation of the EITI standard does not achieve enough in isolation. We need a range of different transparency, accountability and governance reforms.

 

Collecting data on companies’ payments in New York, London and elsewhere is one form of transparency; making sure that such reporting leads to accountability in Kinshasa, Baku, and other resource-rich countries is a different challenge. The EITI is not just about publishing the numbers, but also about creating a platform for dialogue and enhanced accountability in countries rich with natural resources.

 

The EITI requires companies to report their payments to governments but also requires governments to report on revenues received. In doing this discrepancies and inaccuracies are uncovered and can be acted upon. In Nigeria, US$ 5 billion in unpaid taxes was uncovered through their EITI process.

 

In addition, a significant proportion of natural resources are exploited by companies that are not listed at stock exchanges in the US or in the EU, especially by state-owned companies. The EITI requires disclosure of all companies’ payments in countries that sign up to the EITI.

 

For reasons of local accountability and comprehensive reporting, it is clear that disclosure requirements for listed companies complement the EITI.