▽ JAN 16: Mining industry & civil society jointly endorse increased transparency! Read the official recommendations, EWB's press release and articles in the Globe & Mail, Wall Street Journal and Le Devoir.
▽ NEW BLOG! Unexpected Alliances: the need for collaboration to advance both trade and human rights - on the Canadian International Council's Open Canada blog.
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Increased transparency is a critical first step towards making the extractive sector more responsible, by providing citizens of resource-rich countries the tools they need to hold governments and companies accountable.
Canada can and should be a leader in making the global extractive sector more transparent and accountable.
In September 2012, Canada's two largest mining industry associations (the Mining Association of Canada and the Prospectors and Developers Association of Canada), in collaboration with civil society organizations PWYP-Canada and the Revenue Watch Institute, established the Resource Revenue Transparency Working Group.
At its outset, all four members of the Resource Revenue Transparency Working Group committed to the importance of revenue transparency and agreed to jointly craft recommendations for a framework for the mandatory reporting of payments to governments. This framework was produced as a draft in June of 2013 and is currently in the late stages of finalization.
Following on the heels of the Working Group, on June 12, 2013, just before the G8 Summit, Prime Minister Stephen Harper announced a commitment to do just that, by "establishing new mandatory reporting standards for Canadian companies operating in [the extractives] sector.”
But the ability to fulfill this commitment and lead this international movement is firmly held in the hands of Canadian provinces.
Canadian provinces should make it mandatory for mining, oil and gas companies to disclose all payments they make to governments, at home and abroad.
Provinces can make this requirement part of their provincial securities regulations.
- 58 countries produce 85% of the world’s petroleum, 90% of diamonds and 80% of copper.
- In Sub-Saharan Africa, oil, gas and mining account for an average of 40% of government revenues in resource-rich countries. This jumps to an average of 60% in oil-producing countries.
- Global profits from the extractive sector totaled over $2.6 trillion in 2010.
- Profits from natural resources are far greater than foreign aid funding: in 2011, Nigeria’s oil revenues alone were 60% more than total international aid for all of Sub-Saharan Africa.
- But citizens and civil society in many countries lack crucial information, like:
- What companies operate in their country’s extractive sector.
- How much their governments collect in natural resource revenues.
- How those funds are spent.
- In many natural resource-rich countries, poor governance and mismanagement often leads to contracts between governments and companies that neglect long-term benefits for local communities.
- Many governments also struggle to effectively collect natural resource revenues, and funds that are collected aren’t always spent in the public interest.
- Secrecy around extractive sector contracts and revenues has increased mistrust--and at times outright conflict--between citizens, governments and companies.
- This lack of information contributes to the exclusion of diverse voices from conversations about the future of national--and global--natural resources.
- It also makes it harder for communities to ensure they receive full social benefits (such as investment in healthcare, education systems, infrastructure) from the extraction of their natural resources.
- Almost 60% of the world’s mining companies and 35% of the world’s oil and gas companies are listed on Canadian stock exchanges.
- Between 2005 and 2011, Canadian mining investment in Africa leapt from $6 billion to $31.6 billion.
- Canada is also the third-largest producer of natural gas, the fifth-largest energy producer and the sixth-largest producer of crude oil in the world.
- In 2009, the natural resources sector made up 47% of Canada’s total exports.
- This is an opportunity for Canadian provinces to be leaders on a vital international issue.