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New legislation to force Australian firms to publish what they pay

31st October 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – The Australia-Africa Mining Industry Group (AAMIG) on Friday defended Australian miners operating outside of the country’s borders, following the introduction of the Australian Greens party’s Corporations Amendment Bill 2014.

“Australian companies operating in Africa are regarded as being amongst the best corporate citizens and ‘investment partners of choice’ in many jurisdictions,” the industry body, which represents more than 100 Australian mining, exploration, service and supply companies active in Africa, said.

The Corporations Amendment Bill 2014 would establish mandatory reporting requirements of payments made by Australian-based extractive companies to foreign governments.

The Bill requires companies to disclose these payments on a country-by-country and project-by-project basis, and would apply to all Australian companies involved in extractive industries, including oil, gas, mining and native forest logging.

The Greens said that the overall aim of the Bill was to improve transparency and accountability of Australian extractive companies, and to deter corruption by requiring payments to be made public.

“Australia has a responsibility to ensure that our companies operate honestly and responsibly all over the world, but especially in our own region,” Greens leader Christine Milne said.

“A number of Australian companies have been the subject of concerning allegations in relation to corruption, bribery, human rights abuses and environmental degradation. This Bill is an important first step that the Parliament can take immediately to crack down on Australian corruption overseas.

“The Bill creates mandatory reporting requirements for payments made overseas to help shine a light on what can be a murky and deliberately confusing corporate web,” she added.

Under the legislation, extractive companies and their subsidiaries would be required to submit a financial report detailing all payments made to government entities overseas over A$100 000. This threshold would bring Australia in line with the standards set by the US, European Union and the UK in their legislation and directives.
The reports would be published by the Australian Securities and Investment Commission to ensure public accessibility and accountability.

The AAMIG on Friday pointed out that the Greens party made no mention of the commitment Australia had made to the Extractive Industries Transparency Initiative (EITI), for which the country currently has an advanced pilot study in progress.

“The EITI is a well-established, international initiative that provides for supporting companies to publish what they pay to host governments and for host governments to publish what they receive from companies. The reported payments are then reconciled by an independent auditor. It is a methodology that ensures the support of both the governments of compliant countries and the supporting companies,” the AAMIG said in a statement.

The industry body recognised that improved governance, including a determined effort to combat bribery and corruption, could have a significant effect on a country’s attractiveness as an investment destination, and that it could also promote the timely development of industries that can improve the wealth-generating capacity of a country, help governments serve their citizens better, and have a significant impact in alleviating poverty and supporting broader-based industrial development.

However, it suggested that a more appropriate and engaging response to the issue raised by the Australian Greens would be for the federal government, the resources industry and other stakeholders to work together in a collaborative manner to support the existing EITI framework, which importantly, not only incorporates supporting companies, but also compliant host nations.

“The work currently being undertaken on the Voluntary Principles on Security and Human Rights, which involves the federal government, the UN Global Compact Australia Network, the resources industry, security groups and NGOs, is a good example of how a more collaborative approach is likely to deliver a better result,” the industry body said.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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