Transparency in the Extractive Sector

http://www.effervescent.in/

The EU has started the process for a new Directive relating to the transparency of European companies working in extractive mining sector. This initiative it is inspired by the Dodd-Frank Act and affects European companies working abroad in the oil, gas and forestry sectors. Through this directive, all payments over 100,000 Euro made to foreign governments to obtain mining contracts have to be published to guarantee transparency.

 

The objective of this legal measure is twofold. On the one hand, the new directive aims to fight government corruption and on the other hand it is an important step towards limiting tax evasion in tax havens and to assuring fair revenues from European companies for African governments. Although it is always difficult to implement legal measures on both sides, Africa and Europe, there is a willingness to move towards a gradual commitment.

 

However, this Transparency has other objectives concerning the activity of European enterprises operating in Africa. Beside the payments made by European enterprises to the African governments, other information must be revealed in order to ensure the good conduct of companies, fight against corruption and avoid tax evasion. This information should include details of the production process, task force, profits and losses, any conditions of the concessions and the content of contracts.

 

However, there is still a long way to go before we will be able to see social change resulting from the implementation of this legislation. It is important to acquire information about what is actually happening to people at the grassroots and the consequences of the mining. This is the best way to know if the measures actually are a good way to fight corruption and improve the living conditions of people in Africa.

 

See the current Directive on transparency 2004/109/EC 

See more

Go back