Improved governance in resource-rich countries is essential for the billion people who live in poverty in countries abundant in oil, gas and minerals. Without it, they will be excluded from the “clean, green growth” needed for an effective global energy transition.
PWYP and NRGI have engaged in discussions with civil society partners in Eurasia to identify a roadmap for continuing the journey from data disclosure to tangible use of data for improving natural resource governance in the region.
The current coronavirus pandemic and the ever-present corruption risks reinforce the need for transparency in commodity trading. Ghana, as an oil producer, has modeled some commodity trading transparency practices; countries such as the U.K. and Switzerland, home to trading companies, should act too.
The oil and mining transparency rule adopted by the U.S. Securities and Exchange Commission (SEC) will fail to achieve the level of payment disclosure necessary to deter corruption in the natural resource sector.
ResourceProjects.org contains data on more than $240 billion in oil, gas and mining payments to governments in 2019 alone. With a new data layout and updated company and country pages, users can quickly find out how much (or little) a company is paying in taxes, royalties, production entitlements and more.
The voluntary nature of new EITI guidelines means that comprehensive disclosure of detailed information on purchases by traders is unlikely in the near term. Authorities in jurisdictions where commodity traders are based should move to legally require the disclosure of these sizeable payments.
Investors are paying close attention to the financial consequences of the pandemic on suppliers, but more on the companies themselves than on resource-rich countries. Supplier governance influences the ability of nations and communities to benefit from oil, gas and mining projects, and is central to securing a “social license to operate.”
After the U.S. Securities and Exchange Commission invited comment on its latest draft extractive sector transparency rule, it was flooded with comments from investors, civil society organizations and companies urging it to adopt a stronger rule in line with international standards.