Warning on EITI transparency burden

AUSTRALIA’S mining, oil and gas industries has given its blessing to the next stage of Australia’s Extractive Industries Transparency Initiative within its resources sector, with the caveat that it doesn’t create a further nightmare for industry or bureaucrats themselves.

Anthony Barich

As the G20 Anti-Corruption Working Group met in Paris last week and the EITI board met in Myanmar, the Publish What You Pay coalition called on Australia to “get serious” about revenue and tax transparency in the extractives sector and implement the EITI in the country.

Centre for Australian Ethical Research senior analyst Julia Lesk said that while the Australian government has just completed a successful three-year pilot of the EITI, it was yet to indicate whether or not it was going to implement the initiative in Australia.

“Full implementation would help Australians better understand exactly how we benefit from the extraction of our finite natural resources,” she said.

Australian Petroleum Production and Exploration Association told International Coal News in a statement that “APPEA notes that the Australian EITI pilot has highlighted the strength and robustness of Australia’s existing governance and transparency frameworks”.

Therefore, “Australia’s ongoing participation in the EITI should be determined in this light and in acknowledgement of the need to avoid further burdensome regulation rather than under the assumption that our existing frameworks are insufficient”

Association of Mining and Exploration Companies CEO Simon Bennison told International Coal News that it was already standard procedure around the world that fees paid to governments by companies were generally disclosed, and governments receiving monies have a normal accounting process.

“For example in Western Australia where there are nearly 23,000 tenements, all the money is paid on those on a month by month basis, so there will be a limit to all this, otherwise the bureaucracy and administration is going to be a nightmare,” Bennison said.

“Australia has a very transparent system, unlike some other countries which unfortunately have been built on a different culture, so it’s very important that as we’re trying to achieve [transparency] internationally that some of those countries try to avoid that sort of culture that fosters those kinds of facilitation payments.

“That’s been in train now for some time, and we’re fully supportive of that approach.”

He said Australian companies were already “very conscious” of doing everything above board.

“It’s a tricky line they tread in some of those countries and they’re very sensitive about it,” Bennison said. “When they go through their approvals, they’re very keen to make sure any transactions are well documented.”

Oxfam Australia’s extractive industries policy advisor Serena Lillywhite said over 60% of the world’s poorest people lived in countries rich in natural resources, yet secrecy and corruption often resulted in income from natural resource extraction going missing and not benefitting communities.

“Australia is a significant donor to the EITI and has encouraged countries, including Myanmar and Papua New Guinea, to undertake the initiative,” she said.

“In seeking candidacy to implement the EITI, Australia would not only send a strong signal to other governments that it is serious about transparency and accountability in the extractive industries, but it would also be better placed to assist with implementation by our neighbours in the Asia-Pacific region.”

The issue of extractive industry transparency was reportedly a focus area for the G20’s Anti-Corruption Working Group meeting last week; while continued support for the EITI is expected to feature in the Anti-Corruption Action Plan which will be unveiled at the Brisbane G20 Summit next month.

Several G20 countries were already implementing or have committed to implement the EITI, including Indonesia, the United States, the United Kingdom, France, Germany and Italy.

Transparency International Australia’s executive director Greg Thompson said transparency in the extractive industries was becoming the “new norm”, and many Australian oil, gas and mining companies supported EITI implementation in Australia and internationally.

Transparency of revenues paid helps gain community support for extractives projects and is widely considered best practice.

”As G20 President, Australia should lead by example and demonstrate to the world its commitment to transparency in the mining sector by announcing its intention to fully implement the initiative,” he said.

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