Companies in the European Union will now have to disclose in future how much they pay foreign governments to secure oil, gas, coal and other raw materials.
The new EU legislation, passed yesterday in Brussels, is aimed at curbing corruption between poor countries‘ governments and EU firms. The transparency measures are included in an overall accounting directive aimed at cutting the administrative burden for small and medium enterprises.
The agreement was welcomed by advocacy groups Transparency International and ONE, who are calling on EU members to push for similar legislation to be adopted by other countries at the G8 and G20.
“This law will shine a light on the often murky world of oil, gas and mining deals in Africa … potentially lifting millions out of extreme poverty,” said Eloise Todd of ONE.
Oxfam also welcomed the proposal, but regretted it was limited to the extractive and logging industries and failed to make companies reveal extra information that would have given a clearer indication of tax fraud
The deal, which still needs to be rubber-stamped by the European Parliament and EU member states, is to cover privately owned and listed companies registered in the 27-member bloc.