Brussels, 04/05/2012 (Agence Europe) - On Thursday 3 May, EU member states' representatives to the European Union (sherpas) reached broad agreement on updating the EU accounting directives (see EUROPE 10463). As became clear at the Competitiveness Council in February 2012, the member states want greater openness about the payments made by European companies involved in mining and logging that are quoted on the stock exchange to countries outside the EU.
Under the compromise, companies will have to publish details each year of payments of more than half a billion euro in total to any one country or locality. “With this new disclosure requirement on country-by-country reporting in the accounting directives, citizens in resource rich countries can get information on what payments their governments receive from large or listed companies for the primary extraction of natural resources. With this information the civil society can keep their governments responsible for the use of this income. It will be an important step to increase transparency and reduce misuse of public money and corruption”, explained the Danish enterprise minister, Ole Sohn, in a press release.
The ministers do not agree with a European Commission suggestion that there should be a breakdown of payments by venture. The extractive industry will simply be required to provide a list of projects undertaken by it in countries to whose governments it provides payments. An EU source explains that most member states oppose the idea of a breakdown of payment details, but say they agree with the objective sought in making it compulsory to publish country-by-country information. All bar France, that is.
The idea is to increase transparency in multinational companies' dealings with foreign governments over logging and mining deals, as is being promoted by the G8 and other international bodies. By introducing legislation, the EU is planning to take the lead at global level. In the United States, the Dodd-Frank Act also lays down rules, but the actual details have yet to be clarified. Germany is calling for the new EU rules to be aligned with the legislation planned in the US.
The agreement in principle paves the way for informal talks with the European Parliament under the codecision procedure (see EUROPE 10463). In March 2012, the European summit said the draft legislation must be concluded by the end of June this year, so it can come into force in July 2014. (MB/transl.fl)