This past weekend, I participated in the “Open for Growth” event organized by the UK government ahead of the G8 summit in Northern Ireland. The event, known as the “G8TTT,” was an opportunity to illustrate and debate the UK’s G8 agenda for international growth, prosperity and economic development, including advancing Trade, ensuring Tax compliance and promoting greater Transparency.
The meeting brought together hundreds of representatives from business, civil society and governments to discuss how to collaborate to promote and practice fairer trade, proper taxes and more transparency in data, oil, gas, minerals and land investment.
Britain’s Prime Minister David Cameron opened the event, making the case that aid alone cannot end poverty: “Poverty eradication requires that developing countries get the revenues and the benefits of growth that are rightfully theirs. And three vital things are needed to make that happen: fairer taxes, greater transparency and more trade.”
Conversely, he stated that bad governance and corruption destroy lives and made a commitment not to provide aid to notoriously corrupt regimes, using Equatorial Guinea as an example. He also reiterated the need to scale up support to those countries and governments making genuine efforts to address corruption but lacking the capacity and systems to harness the benefits of extractive industries. He singled out Guinea Conakry as one country pushing for bold reforms, mentioning its public database of mining contracts that RWI helped to build.
To support countries reforming their extractive sectors, the G8 announced partnerships with Burkina Faso, Colombia, Ghana, Guinea, Mongolia, Myanmar, Peru and Tanzania that will see increased collaboration around natural resource management. RWI prepared a briefing for the event to outline our work in those partnership countries.
The Prime Minister’s speech was followed by a panel with Ghana, Guinea, Tanzania and Burkina Faso’s heads of state and four breakout sessions including one on extractives chaired by the Deputy Prime Minister Nick Clegg and attended by Ghana and Guinea’s heads of state. A number of representatives from companies, governments, and civil society made short interventions. Here some highlights and messages I took away from the event:
•Consensus on the crucial role of international standards: all heads of state and high-level officials made a strong plea for international standards that enable national reform and help prevent or address corruption. President Condé pointed to the precious help of U.S. authorities in uncovering illicit behavior around mining concession awards in Guinea. A Colombian representative called for the development of exhaustive accounting standards for the mining industry, a longstanding battle of RWI. Many welcomed Canada’s announcement to join the U.S. and EU in requiring companies to report project -level payments to resource-producing countries.
•Capacity development is central to harnessing the benefits of extractives. President Kikwete of Tanzania called for scaling up support to governments in negotiating mining contracts. Ngozi Okonjo-Iweala, Finance Minister of Nigeria, seconded this point and suggested the launch of “tax inspectors without borders,” which he would welcome to Nigeria to help with extractive industry accounting. In response, Julie McCarthy of Open Society Foundations announced the launch of the Transparency Champions Challenge to empower reformers around the world to improve government responsiveness and accountability.
•The shift in discourse is historical—with some exceptions. All comments from high-level officials and heads of state echoed the convictions that have motivated RWI, and me personally, to work on improving resource governance for close to a decade. Issues like contract disclosure, countering illicit financial flows, and disclosing company’s beneficial owners were until recently the battleground of NGOs, but they are gradually becoming part of a global agenda shared with governments and forward-looking companies. Sam Walsh, CEO of Rio Tinto, made a statement supporting the emergence of a global transparency standard and encouraged Australia to look closely at Canada’s steps. Simon Henry, CFO of Royal Dutch Shell, said that disclosure of beneficial ownership of companies was a “no brainer.” This is a testimony to Publish What You Pay’s extraordinary progress in bringing these issues to the forefront of the international agenda.
More must be done, however, to encourage participation from all governments in transparency efforts and ensure good corporate behavior across the globe. Too many governments still lag the average on basic accountability standards within oil, gas and mining industries, as Revenue Watch’s 2013 Resource Governance Index makes clear. Meanwhile major oil companies, including Shell, are working hard to undermine global consensus on transparency through a lawsuit filed against the foundational legislation passed under Section 1504 of the U.S.’s Dodd-Frank Act.
I was at once excited and humbled at the exposure RWI and our projects received at the event. Specifically, Rio Tinto’s representative stressed the important work we do in Guinea. The Public Interest and Accountability Committee of Ghana that RWI supports was also singled out as a good practice for revenue management. DFID also set up an “open data” desk and showcased videos of the work we do with them, the World Bank Institute and Omiydar on making extractive data accessible and interactive to generate public interest and ease civil society oversight.
Deputy Prime Minister Nick Clegg closed the ceremony highlighting that for the first time we are all pointing to the same destination, some want to move faster, others slower but, for the first time, we are on the same journey. The statement accurately reflected of feelings in the room.
The UK must now add to the momentum it has generated on transparency and work to consolidate agreement on strong standards for addressing ‘Tax, Trade and Transparency’ issues by:
•Continuing to pressure G8, G20 and other governments to implement strong transparency standards for oil, gas and mining companies, state-owned entities and natural resource funds
•Taking firm steps towards the development of a common, public registry of company beneficial ownership information and urging other G8 members to do the same
•Formalizing plans for a system of automatic exchange of tax information that would cover UK’s overseas territories and crown dependencies, among which are many tax havens—and serve as a model for broader G8 and international action to create a multilateral system
•Supporting funding for the development of increased capacity in resource-rich countries for the sovereign, sustainable management of resource assets.