Thousands of oil, gas and mining companies now publish details about the payments they make to governments, such as taxes and royalties, wherever they operate in the world. The disclosures result from hard-won legislation in the EU, Canada and Norway, and from the voluntary Extractive Industries Transparency Initiative (EITI).
A street vendor waits for customers to buy oil from a roadside store in Port Harcourt, Nigeria. Credit: George Osodi/Bloomberg via Getty Images
These payments amount to hundreds of billions of dollars a year and are a vital source of government revenue, particularly in poorer countries. Yet too often the money is siphoned off by elites instead of benefiting people in resource-producing countries.
The payment disclosures have resulted in an avalanche of data, yet very little guidance exists to show how this information can be used to hold governments and companies to account for important public revenues.
Finding the Missing Millions, a new handbook from Global Witness and Resources for Development Consulting, helps to close this knowledge gap.
The handbook features 10 different methods for using data from oil, gas and mining projects to check whether companies are paying the right amount to governments. Each method features ‘real life’ case examples to illustrate how this can be done.
The handbook shows you how to:
- Calculate how much communities should receive from extractive projects in their local area, and track the money into local authorities’ bank accounts
- Monitor payments over time to check for sharp deviations
- Check a company is making all the types of payments it should be
- Verify high risk one-off payments
- Check whether companies are paying the correct amount in royalties
- Calculate whether companies are paying the correct amount in profit oil during the early years of a project.
Short video tutorials that demonstrate some of the methods are available here.
One case example looks at payments that are earmarked for development projects to benefit mining-affected communities in South Goa, India. The payments were due to be transferred by the mining company Vedanta to a local district authority.
Previously, a lack of transparency made it impossible for local people to know how much they were owed from Vedanta’s mine, and to follow the money into government accounts. Using one of the methods shown in the handbook, a simple calculation revealed that the company owed $2.1 million to the local district authority.
The method for identifying and tracking community-level payments will be useful in other resource-producing countries, many of which have similar localised payment systems.
The Inata gold mine in Burkina Faso. Royalty payments from this mine are analysed in the handbook. Credit: Shutterstock
Revenue data has the power to turn the tables on the resource curse. This is money that can save and change the lives of millions of people around the world, by investing in hospitals, doctors, medicines, teachers, schools, universities, roads and railways. But the data will only achieve its full potential to realise these futures if it’s used to hold governments and companies to account.
In the coming months Global Witness will host a series of webinars to highlight different ways you can use payment data, starting with an overview of the handbook on Wednesday 26th September at 14:00 BST. Please save the date and register your interest here!
Most of the methods in the handbook can be carried out by anyone with access to the internet and a bit of time to spare. We hope you will take advantage of this important new tool and use it to make governments and companies accountable for these vital public revenues.
