UK oil company becomes the world’s first extractive firm to publish revenue payments to governments by project
The UK company Tullow Oil today became the world’s first extractive firm to publish details of its revenue payments to governments broken down by each project the company operates worldwide. The disclosures, released today in Tullow’s annual report, show the taxes, royalties, licence fees and other public revenues generated by the company’s operations across 21 countries – 14 of which are in sub-Saharan Africa – for the years 2012 and 2013.
Tullow’s voluntary disclosures are being released in advance of a new EU law, due to come into force in the UK in 2015, that will require EU oil, mining and logging companies to publish their payments to governments on a project-by-project basis. These detailed disclosures will enable citizens in economically poor but resource-rich regions to monitor public revenues worth hundreds of billions of dollars and hold governments to account for how the money is used.
The disclosures deal a heavy blow to a lobbying campaign being waged by some of Tullow’s industry competitors to keep revenue payments secret. The American Petroleum Institute, an oil lobby group whose leading members include ExxonMobil, Royal Dutch Shell, Chevron and BP, is trying to weaken the implementing rule for a U.S. law that requires U.S.-listed oil and mining companies to publish their payments on a project-by-project basis. The rule is currently under review by the U.S. Securities and Exchange Commission.
“Tullow’s welcome disclosure blows a hole in the argument made by some oil companies that project-level reporting will impose a heavy burden on business,” said Dominic Eagleton, a senior campaigner with Global Witness. “This should encourage the Securities and Exchange Commission to create a strong payment disclosure rule that allows citizens to identify which companies are making payments and the amounts they contribute.”
Tullow’s disclosure reflects the emergence of a new global reporting standard for natural resource payments. All 28 EU Member States are required to have project-level disclosure legislation in place by July 2015, with the UK, Germany, France, Italy, Sweden, Denmark and Finland publicly committed to swift implementation of the rules. Outside the EU, Norway brought an equivalent law into force in January 2014, Canada is on track to creating a matching legal standard by April 2015, and Switzerland’s government is developing options for similar legislation.
In addition, the Extractive Industries Transparency Initiative (EITI), a revenue reporting scheme that governments sign up to voluntarily, made project-level disclosure a requirement for all 44 of its implementing countries when the EITI’s global standard was revised in May 2013.
“Instead of trying to weaken transparency rules designed to combat corruption and poverty in resource-dependent countries, the oil majors should follow Tullow’s lead and embrace the fact that project-by-project reporting is now the new global standard,” Eagleton added.
Ends
Notes to Editors:
- Tullow Oil’s payment disclosures are on pages 176 to 179 of its 2013 Annual Report, available here: http://www.tullowoil.com/files/pdf/tullow_ar_report_2013.pdf
- The EU Accounting and Transparency Directives, signed into law in June 2013, require EU-listed and large, EU-registered oil, gas, mining and logging companies to publish their payments to governments on a project-by-project basis.
- The U.S. Dodd-Frank Act (Section 1504), signed into law in July 2010, requires oil, gas and mining companies that report to the U.S. Securities and Exchange Commission (SEC) to publish their payments to governments on a project-by-project basis. In July 2013 a U.S. District Court vacated the SEC rule that implements the Section 1504 law, and instructed the SEC to revisit certain aspects of the rule. The SEC is not required to change the rule, but must give fuller justifications for its policy choices.
- The EU Accounting and Transparency Directives require full public disclosure of project-level payment data, including the identity of companies making payments. The American Petroleum Institute has proposed that the SEC should change the U.S. rule and require payment disclosures to be aggregated at the level of province or region, and withhold the identity of companies making payments.
For press inquiries:
(London) Dominic Eagleton +44 7738 713 016 / [email protected]