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Publish What You PayThe global movement for extractives transparency
University of Dundee, 9 May 2012Joseph Williams
Origins of PWYP
The PWYP campaign got started on the back of a couple of hard-hitting exposés on Angola by London-based Global Witness….
Global WitnessDecember 1999
2002: Notion of “Publish What You Pay”
Snapshot of PWYP
• Global coalition of civil society organisations launched by a group of NGOs in June 2002– Global Witness, CAFOD, Save the Children UK, Oxfam
GB, Open Society Institute, Transparency International UK– Now 650 organisations in over 50 countries (many
organised as national coalitions)• Campaign for transparency and accountability in the
extractive industries, with a focus on oil, mining and gas. (Fisheries & forestry??)
PWYP International Secretariat• The PWYP international secretariat coordinates and supports the global
coalition/campaign in advocacy, capacity building and coalition outreach.
• The PWYP international office consists of 6 full-time staff members:– International Director– Senior Advocacy and Communications Officer– Programme Officer– Africa Coordinator (based in Accra)– MENA Coordinatior (based in Beirut)– Communications Assistant
• The PWYP international office is hosted by the Open Society Foundation in London
Regional level
• Due to massive growth of the PWYP coalition in Africa, a full-time Africa Regional Coordinator is based in Accra, Ghana and hosted by the Catholic Relief Services.
• May 2011: new governance/advocacy structure adopted for Africa. Includes an Africa Steering Committee
• 2012: MENA coordinator (current focus onIraq and Yemen)• The PWYP international office manages outreach to PWYP
campaigners and national coalitions in Europe, Central Asia/Caucasus, Asia-Pacific, North America and South America.
National level
Transitioning to a new strategy and governance structure…
• After 10 years – time to consolidate• Revisit initial assumptions, protect the PWYP
brand and ensure the values we espouse are also reflected in our own governance and working practices
International Strategy Development Process 2012-2016
RecognitionLearn what others
say
ChoiceLearn what our members say
EndorsementCommit to what
we will do
AlignmentPublish what we
will do
Brand effectiveness study
External assessment of coalitions
September – June September
Desk review including:
Publishing What We Learned EITI EvaluationNoble NetworksCampaigning for International Justice
Who we are
What
WhyWhere
How
Methodology
• Africa Steering Committee• CSO input EITI Strategy WG• Interviews with MCs, NCs,
(ex-) members• Online survey• Internal coalition
assessment• Workshops (regional
and/or national)• Strategy Development
Advisory Committee
Strategy including :
Advocacy targetsGovernance structureMembership standard
Brand Excellence policyFundraising
Endorsed by National Coordinators, MCs and
Africa Steering Committee at National
Coordinators / 10th Anniversary Celebration
Alignment of organisational
structure (staff retreat)
Alignment of national coalition strategies
Implementation of governance structure
Annual Strategy Review
September- ……
Interviews with external partners
Options to focus on:
1. Publish What You Pay
2. Publish Why You Pay
3. Publish What You Earn and Spend
4. Practice What We Preach
Publish What You Pay
Mandatory disclosures with extra-territorial implications through listing regulations in capital intensive markets (Globalising ‘Dodd-Frank and EU Directives’)
Mandatory disclosures through regulations either at regional or national level – implications mainly confined to national level
Mandatory disclosures through international accounting standards regulation
Mandatory disclosures through embedding EITI in national legal frameworks
EITI reports need to be disaggregated by project and company at minimum
Publish Why You Pay
Options / targets Transparency and accountability around the decision to extract,
including Free Prior and Informed Consent.
Contracting process is open and competitive from tendering to award. This includes ‘beneficial ownership’ of all companies who are bidding.
Contract transparency in a format that is accessible, comparable, and comprehensible.
Mandatory extended country-by-country reporting at national and/or regional level (which will reveal issues around ‘fair deal’, tax avoidance and capital flight)ProfitsSalesCostsProduction
Publish What You Earn/Spend
Options / targets
Government ‘ask’.
Advocate for an EITI that is embedded into broader budget and accountability processes.
Work on linking EITI/other data to broader budget monitoring processes in country at national and sub-national level.
Our Approach To Advocacy• Support voluntary measures as a first step and
encourage use of mandatory mechanisms to consolidate gains
• View mandatory mechanisms as vital in order to – Avoid dependence on a moment of political will; – Entrench transparency in long-term– Complement initiatives such as EITI
Example: EITI
Initial policy response to PWYP which…• Builds trust amongst stakeholders• Is a unique forum that allows civil society often
unprecedented access to engage in policy with corporate and government decision-makers
• Can lead to laws at the national level. Moves it away from voluntary and gives the initiative teeth.• Liberia
• Strategy review currently taking place
EITI and Corporate Regulation (1)
• Complementary and mutually reinforcing
Difficulties with EITI alone:• Hasn’t worked in STP (Too early? Conditions not right?)• Angola is not a member (despite it raising the issue)• Nigeria (flagging commitment since 2006)• Equatorial Guinea (no longer a candidate)• Uganda, Burma/Myanmar, BRICS, etc
EITI and Corporate Regulation (2)
Corporate regulation will...• Provide genuine timely disclosure of information (annual
basis). 2006 is most recent year for all EITI countries• Help provide disaggregated data (Azerbaijan, Congo B)• Data would be more easily searchable, comparable and
comprehensible• Potentially provide contextual information on reserves,
production volumes, production revenues, costs (IASB)
Where there is no EITI process
Corporate regulation will...• Ensure payment information is in the public domain• Encourage EITI implementation in those countries (captured
companies may lobby for this)
What can EITI tell you about a company?
Growing number of countries implement EITI. At least 30 have published EITI reports, but BP operates in more than 80 countries, Shell operates in more than 90 countries; Total is in over 130.
What can EITI tell us about BP?
No data for 2011 (even though major companies like Rio Tinto and Shell have put some voluntary data into the public domain in 2011)
2010? Azerbaijan: 400 million USD2009? Azerbaijan 284 million USD + Norway 148 million USD = 432 million
BP taxes in 2009 = 10 billion USD
Therefore EITI date in 2009 sheds light on< 5% country by country
Mandatory disclosurePWYP has been pushing for:• National laws and regulations• Accounting standards (IASB)• Bank/IFI lending policies• Stock market listing requirements and Accounting
laws• London AIM and Hong Kong (HKEx)• US Dodd-Frank and EU legislative
proposals
Accounting Standards• Work on an IFRS has been painfully slow
• Call for an IFRS by European Parliament in 2007
• Extractives Team set up in 2008 to look at an IFRS which would supersede IFRS 6
• Range of ‘users’ which IASB listens to is limited, which explains why more accountable regulators have been more reactive.
• Would provide a level playing field
Dodd-Frank Section 1504
• “Lugar-Cardin” Provision 1504 in Dodd-Frank Act of 2010 (Wall Street Reform Act)– Signed into law by
Pres. Obama, July 21
• Based on stand-alone “Energy Security through Transparency Act” – bipartisan support
25
Dodd-Frank Section 1504
• Multiple hearings / opportunities for industry input• Full White House backing• Investor / Company / Civil society support• All US-listed EI companies must disclose
payments to governments in SEC filings starting in 2013/2014• Still waiting for final rules…• SEC has been in violation of Congress since
17 April 2011…
What it means• Covers around 90% of internationally operating oil
companies – US and foreign• 8 of the world’s 10 largest mining companies• Country-by-country, in all countries of operation• For each “project”• Disaggregated by payment type (royalties, signature
bonuses, production entitlements, taxes, fees and other benefits)
• US and foreign governments• Online in annual reports
What it means
• New tool to empower civil society in EI-dependent developing countries (online, tagged, searchable)
• Disclosure will not wax/wane based on host government political will (Nigeria)
• Complements EITI and is part of the package of measures needed
Whitehouse Press Statement
“The United States is committed to working with other countries to ensure the implementation of similar disclosure requirements in other financial markets and will make this a priority in the year ahead.”
23 July 2010
Growing support from the European Commission/Parliament
Barnier, Barroso, Karel de Gucht, Pibalgs, Tajani
MEPs: Louis Michel, Sharon Bowles, Pascal Canfin, Sven Giegold, etc
And at the national level too…SarkozyCameronOsborneMitchellLagardeDe Raincourt
European Directives• Proposed by European Commission on 25
October, 2011 as amendments to Transparency and Accounting Directives• Includes large private companies (turnover 40
million USD) and text in Accounting Directive• Includes Forestry
• Currently with European Parliament and European Council. Political agreement in June 2012?
• Then to Member States for implementation (up to 18 months)
Industry has been lobbying hard…
European Directives
“Energy companies are fighting efforts to reveal payments to government”25 February 2012
Key sticking points
Exemptions?
PWYP
None; to be effective law should cover all companies, all countries.
Companies
-Exemptions foreign issuers.-Exemptions from reporting data where host country objects.
- EITI equivalence?
Key sticking points (2)
Projectdefinition
PWYP
Reporting in relation to legal agreements which give rise to payments
Companies
Project = -Country-Geologic basin/province-Level of govt. where payments are reported to
Key sticking points (3)
Materialitythreshold
PWYP
As low as $15,000 per payment, to capture revenues material to host country, communities (cf EC)
Companies
1 million USD+ some companies want reporting on ‘material’ projects only
