Firms must publish project-level reports for all countries with no exceptions
Global Witness warmly welcomes regulations published today by the UK Government that will implement the EU Accounting Directive. The Directive requires all 28 EU Member States to introduce legislation that compels oil, gas, mining and logging companies to publish detailed accounts of the billions of pounds-worth of payments they make to governments across the world, such as taxes, royalties and licence fees, for access to natural resources. 
The announcement by Business Minister Jo Swinson puts the UK firmly on track to implementing the Accounting Directive by the end of 2014, long ahead of the July 2015 deadline for EU Member States to bring the Directive into force.
"Global Witness commends the UK Department for Business for swiftly producing a strong set of payment reporting regulations. The UK regulations clearly require companies to report at the project level, whilst wholly rejecting calls to include exemptions which would allow firms to keep payments secret in certain countries," said Simon Taylor, director of Global Witness.
"This will deter companies from making illicit payments and empower citizens in resource-rich countries to follow the money generated by natural resources and hold their governments to account for how these public revenues are used," Taylor added.
The regulations will be looked at closely by policymakers in the United States and Canada where similar reporting regimes are being developed. "The UK's announcement highlights the need for other countries to introduce matching rules that will create a level playing field for industry, and to stand firm against the small number of oil companies that are lobbying to weaken these reporting requirements," said Taylor.
The UK regulations compel large UK extractive companies to publicly disclose payments of £86,000 and above on a company-by-company and project-by-project basis in all countries with no exceptions. Companies that fail to report fully, truthfully and accurately will face criminal penalties.
However, the regulations include clauses that would empower the UK Business Secretary to veto criminal prosecutions for non-compliance. Civil society groups in the UK Publish What You Pay coalition including Global Witness, Christian Aid and Cafod are calling for these clauses to be removed.
The regulations are due to be laid before the UK Parliament this autumn and to come into force on December 1st 2014, with covered companies required to report in 2016 on the payments they make in 2015.
Project-level payment reporting is supported by a diverse range of interests including a group of investors with over US$6.4 trillion in assets under management.  Statoil endorses a mandatory global reporting standard that matches the EU Accounting Directive,  and in March 2014 the UK oil company Tullow voluntarily disclosed project-level payments for all countries of operation.  G8 leaders agreed at the 2013 Lough Erne summit to work towards a common global reporting standard for project-level reporting,  and more recently the UK Prime Minister David Cameron urged the United States to finalise a rule to implement Section 1504 of the Dodd-Frank Act, which requires U.S.-listed oil, gas and mining companies to disclose payments at the project level. 
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1) The UK regulations are available online here.
2) A group of 34 international investors including Allianz Global Investors, Aviva Investors, BNP Investment Partners, Henderson Global Investors and IMG IM International submitted a comment to the U.S. Securities and Exchange Commission in April 2014 calling for a strong rule to implementing Section 1504 of the Dodd-Frank Act, including a requirement for companies to report on a project-by-project basis.
3) See page 19 of Statoil's 2013 Sustainability Report.
4) See pages 7 to 11 of Tullow Oil's 2013 Transparency Report.
5) See paragraphs 36 and 39 of the 2013 G8 Communique.
6) Rt Hon David Cameron MP, 'The Corruption Cure: Transparency, Taxes, Trade', Wall Street Journal, 4th June 2014.