UK raises the bar for transparency in the extractive industries | WPN World People News

UK Prime Minister announced that the UK government intends to sign up to the Extractive Industries Transparency Initiative (EITI). EITI was set up to help tackle corruption, to improve the way revenues from oil, gas and minerals are managed and to make sure that people across the world share in the economic benefits of the natural resources in their country.

The commitment, made following the Prime Minister’s meeting with the French President François Hollande, is part of a joint agreement with the French Government and will mean both governments will apply for formal candidacy of the EITI.

A drive for greater transparency is at the heart of this year's G8 agenda, building on action the government is already taking through the EU Accounting Directive. Both governments have urged G8 partners and other governments to join this global initiative.

Under the EITI, extractives companies operating in the UK would report material payments to the UK government, totalling billions of pounds, who in return would also report the receipts it received. The payments of tax, licence fees and other receipts would be disclosed in reports conforming to the EITI standards. The UK hopes to make rapid progress in its application for formal candidacy.

Prime Minister David Cameron said:

"I am determined to use our G8 leadership to put a new and practical emphasis on transparency and accountability, particularly in our partnerships with less developed and emerging countries.

"That's why the UK will sign up to the Extractive Industries Transparency Initiative, so that we too play our part in ensuring that people around the world benefit fairly from the natural resources of the countries in which they live. Mineral wealth for developing countries should be a blessing, not a curse. And I urge our G8 partners to champion the same high standards of transparency.

"Oil, gas and mining can, if managed well, deliver valuable economic benefits to poor countries, reducing poverty and driving growth. And if people can see how much their government receives from selling the resources that rightfully belong to them, they can question how that money is being spent and drive action to stamp out corruption.

"This is good for government, good for business and good for citizens."

Business Secretary Vince Cable said:

“The UK has always been at the forefront in making sure that transparency lies at the heart of business and government. Our intention to sign up to the EITI shows just how serious we are in leading the way and in raising global standards.

“Some of our biggest extractive companies in the UK are already in favour of the measures – whether as founding members of EITI, sitting on the EITI board or reporting in the other countries which already use the standard. It is of course key we get this right for everyone – this is about levelling the global playing field and boosting transparency, not about getting in the way of business and meddling in their affairs.

“There is a long road ahead to make sure that this works best for everyone. That is why discussions will commence soon between the government, industry and all interested parties as to how we can get this system working as effectively as possible for the UK.”

International Development Secretary Justine Greening said:

“This is a huge step towards setting global standards that work for developing countries and work for Britain. The UK has been a strong supporter of EITI since its launch and our companies and NGOs have helped shape it from the start.

“By joining EITI and urging other countries to join, we can boost responsible investment in the world’s poorest countries so they can lift themselves out of poverty and help people in those countries hold their governments to account.”

The EITI provides a standard for companies to publish what they pay to governments and for governments to disclose what they receive from the extractives industries. This provides information so that citizens can hold governments to account for how these resources are used.

Employment Relations and Consumer Affairs Minister Jo Swinson will now lead the implementation of the EITI. Negotiations will now begin during the pre-candidacy phase of the UK’s membership between government, industry and stakeholders as to how the framework for reporting will operate, the scope of companies included and how payments are disclosed.

Source: UK Department for Business, Innovation & Skills