Mandatory Disclosure

Why PWYP-Canada campaigns for mandatory disclosure

Whether it is in royalties, bonuses or fees, extractive companies make significant payments to resource-rich countries around the world for their natural resources. Until recently, these numbers were shrouded in secrecy, which meant that citizens had no way of knowing how much money their governments were making from their natural resources, nor how those revenues were being spent. PWYP-Canada has been advocating for legislation that will oblige Canadian extractive companies to publish their payments per project in countries where they operate around the world. With this information, citizens and civil society will be able to hold their governments to account for how their natural resource revenues are being managed. Canada is home to 60% of the world's publicly traded mining companies and a third of the world's oil companies. With operations in over 100 countries legislation in Canada would help citizens from all over the globe. 

The benefits of mandatory disclosure stretch beyond citizens and communities, to include a variety of stakeholders. For investors, it helps to assess country and project specific governance, reputational and tax risks. For companies, enhanced transparency is good for business, helping to promote a more stable investment climate and secure a social license to operate. Furthermore, transparency can benefit resource governance by providing a tool for governments to build capacity for tax collection and management.

 

Progress in Canada

PWYP-Canada’s campaign for mandatory disclosure, a campaign carried out in collaboration with partner organizations and mining companies, met with success as the Government of Canada passed the Extractive Sector Transparency Measures Act in December 2014. The Act requires large, private mining, oil and gas companies, alongside those listed on a Canadian stock exchange to disclose the payments they make to governments in Canada and abroad on a country-by-country and project-by-project basis.

The Act officially came into force in June 2015, but there remains work to be done if the legislation is to fulfil its full potential. For example, the regulations around the Act - which include guidance on how the information is to be disclosed - have not yet been published. These documents will be developed through a Working Group composed primarily of industry stakeholders, but also including several civil society, provincial and aboriginal representatives. The Working Group, initiated by Natural Resources Canada, serves to build upon the work of the Resource Revenue Transparency Working Group, alongside previous consultative processes. PWYP-Canada and our members, both here in Canada and abroad, have actively contributed to the consultative processes to date. Please see our submissions on the right. PWYP-Canada is also calling for the government to specify that the way the information is published adheres to the open data standard and is accessible via a centralized database. 

Much of the advocacy on this issue was done as part of the Resource Revenue Transparency Working Group, made up of civil society and mining organizations. You can find out more about this collaboration on the page dedicated to the group. 

Over the past few years, global momentum for rules that oblige extractive companies to publish what they pay has grown with legislation being adopted by EU member states, Norway, Ukraine and the US. Visit the International Publish What You Pay website to find out more.

Mandatory Disclosure Campaign in Canada - Key Dates

1 June 2015 - The Extractive Sector Transparency Measures Act comes into force

17 December 2014 - Government of Canada passes the Extractive Sector Transparency Measures Act 

5 June 2014 - Quebec becomes the first province to table legislation to oblige extractive companies to publish their payments through securities legislation

14 June 2013 - The Resource Revenue Transparency Working Group releases draft recommendations on implementing mandatory reporting standards for Canadian mining companies. 

12 June 2013 - Prime Minister Stephen Harper announces his government’s intention to establish mandatory reporting standards for Canadian extractive company payments to governments

6 September 2012 - Launch of Resource Revenue Transparency Working Group, which consists of PWYP-Canada, the Revenue Watch Institute (now Natural Resource Governance Institute) the Mining Association of Canada and the Prospectors and Developers Association of Canada.

 

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