Anti-Corruption News
Calls for Financial Disclosure in Extractive Industries
From Global Witness Website: Global Witness is calling for the oil and banking industries to declare tax and other payments they make to governments to promote transparency and curb corruption.
Such tax declarations, that are accepted as the norm within developed countries, are strenuously resisted by the same companies in developing countries.
These declarations are essential to counter the massive corruption and bloody conflicts that are found in countries such as Angola. In Angola, the oil sector currently provides between 80-90% of the State's revenue, worth about US$3-5 billion each year, of which about one-third 'disappeared' or is unaccounted for in 2001.
"Secrecy over state revenues encourages ruling elites to mismanage and misappropriate money rather than invest it in long term development," said George Soros, one of the leading proponents for disclosure of income from extractive industries. There is a growing pressure from a variety of sources, including Soros and Global Witness as well as PM Tony Blair and a number of civil society organizations in both the developed and developing world. While there is no clear consensus on what strategy to pursue, there are a number of options being proposed.
Soros' initiative, supported by many NGOs including Global Witness, focuses on the corporate side, proposing that any publicly traded company be required to disclose aggregate information about taxes, royalties, fees and other transactions with governments and/or public sector entities for the products of every country in which they operate.
An alternative approach would be to forge a coalition of companies, countries and civil society to develop a framework for voluntary disclosure.
In a related field, USAID is working on an initiative to increase transparency and reduce corruption in the timber industry in Africa, particularly in terms of its relationship to armed conflict in the region. Access to natural resources which can easily be converted to cash can fund and prolong conflict, and conflicting claims to such resources can actually spark civil conflicts. (For more info on this project, e-mail Tjip Walker in OTI or call him at 202-712-4842.)
For further info on the Soros proposal, visit: http://www.publishwhatyoupay.org.
For more on Global Witness, visit: http://www.globalwitness.org.
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