Sydney Morning Herald
July 19, 2010
AUSTRALIAN resources companies could soon be required to disclose all payments made to governments of countries in which they operate after the US Congress passed legislation to increase transparency.
Under the US Financial Reform Act, oil, gas and mining companies registered with the US Securities and Exchange Commission will have to make public their tax and revenue payments from projects in resource-rich, but often poor countries.
The legislation is aimed at avoiding incidents such as the BHP Billiton ''tea money'' scandal that came to light earlier this year. In April, the mining giant was alleged to have paid the Cambodian government money in return for bauxite leases.
Oxfam Australia mining advocacy co-ordinator Serena Lillywhite said while BHP and Rio Tinto would be caught under the legislation (they are registered with the US SEC) both had already taken measures to disclose voluntarily payments to other countries.
''I can't comment on the Cambodian incident, but the decision by BHP to voluntarily disclose all payments on a country-by-country basis is a very recent decision that was made in May of this year,'' she said. ''What BHP has done is signalled their intention to disclose in future sustainability reports.''
Ms Lillywhite said the US decision puts pressure on Australia, which derives much of its wealth from non-renewable resources, to follow suit.
''Australian mining companies are significant global players with more than 300 companies active in the countries of Africa alone,'' she said.
"Mandating the disclosure of all payments by Australian mining, oil and gas companies on a country-by-country basis will demonstrate the Australian government is serious in its approach to corporate governance.
''It will also help Australian mining companies comply with international best practice, contribute to alleviating poverty and reduce the risks of complicity in corruption and human rights violations, particularly when doing business in high-risk countries."
Global Witness, the non-government organisation which published the report into BHP's Cambodia dealings, said the US legislation also aimed to tighten the provision of resources.
''The act will also require companies whose products contain cassiterite [tin ore], coltan, wolframite and gold to disclose to the SEC whether they are sourcing these minerals from the Democratic Republic of Congo or adjoining countries,'' a spokesman said. ''Companies will have to detail the measures they have taken to avoid sourcing these minerals from DRC armed groups, which are guilty of massacres and other atrocities.''
The New York-based Revenue Watch Institute said the next step was for the International Accounting Standards Board to make the US legislation universal in the 110 countries, including Australia, which apply the standard.
Under the US Financial Reform Act, oil, gas and mining companies registered with the US Securities and Exchange Commission will have to make public their tax and revenue payments from projects in resource-rich, but often poor countries.
The legislation is aimed at avoiding incidents such as the BHP Billiton ''tea money'' scandal that came to light earlier this year. In April, the mining giant was alleged to have paid the Cambodian government money in return for bauxite leases.
Oxfam Australia mining advocacy co-ordinator Serena Lillywhite said while BHP and Rio Tinto would be caught under the legislation (they are registered with the US SEC) both had already taken measures to disclose voluntarily payments to other countries.
''I can't comment on the Cambodian incident, but the decision by BHP to voluntarily disclose all payments on a country-by-country basis is a very recent decision that was made in May of this year,'' she said. ''What BHP has done is signalled their intention to disclose in future sustainability reports.''
Ms Lillywhite said the US decision puts pressure on Australia, which derives much of its wealth from non-renewable resources, to follow suit.
''Australian mining companies are significant global players with more than 300 companies active in the countries of Africa alone,'' she said.
"Mandating the disclosure of all payments by Australian mining, oil and gas companies on a country-by-country basis will demonstrate the Australian government is serious in its approach to corporate governance.
''It will also help Australian mining companies comply with international best practice, contribute to alleviating poverty and reduce the risks of complicity in corruption and human rights violations, particularly when doing business in high-risk countries."
Global Witness, the non-government organisation which published the report into BHP's Cambodia dealings, said the US legislation also aimed to tighten the provision of resources.
''The act will also require companies whose products contain cassiterite [tin ore], coltan, wolframite and gold to disclose to the SEC whether they are sourcing these minerals from the Democratic Republic of Congo or adjoining countries,'' a spokesman said. ''Companies will have to detail the measures they have taken to avoid sourcing these minerals from DRC armed groups, which are guilty of massacres and other atrocities.''
The New York-based Revenue Watch Institute said the next step was for the International Accounting Standards Board to make the US legislation universal in the 110 countries, including Australia, which apply the standard.
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