Kofi Annan, Chair of the Africa Progress Panel, gave a speech at the Graduate Institute in Geneva last week, which highlighted the benefits of mandatory transparency rules for the hundreds of billions of dollars that oil, gas and mining companies pay to governments in resource-dependent countries each year, in the form of taxes, royalties, licence fees and other kinds of revenue payments.
Referring to the U.S. Dodd-Frank Act (Section 1504) and a legal challenge brought against it by an oil industry group, Annan stated that: "Efforts by a US-based lobby group, the American Petroleum Institute, to keep financial flows secret will ultimately be a blip on the road to greater transparency.
I urge the US Securities and Exchange Commission to maintain its high transparency standards. The Dodd-Frank Act is an impressive piece of legislation that projects US leadership on these issues.
I urge other multinationals to do what is right without waiting for governments to pass laws. Multinationals need to recognize that they also play a critical social role - and that doing good is ultimately good for business.
Transparent corporate governance builds reputations, reduces political risk, and may ultimately win more extractive contracts, too."
Kofi Annan also called on governments to adopt national laws that will ensure citizens can identify the beneficial owners of companies that bid for licences to extract natural resources:
"Building on the Africa Mining Vision, a blueprint for development formulated by African nations, African governments should adopt legislation that requires companies bidding for concessions and licences to disclose fully their beneficial ownership. Tender and concession granting processes must be open and transparent."
Click here to read the full speech.