On transparency bill, Canada should stand its ground against Big Oil

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On transparency bill, Canada should stand its ground against Big Oil

Oct 31, 2017 | 08:10 1 Alan Detheridge
On transparency bill, Canada should stand its ground against Big Oil

Alan Detheridge

Special to The Globe and Mail

Published Tuesday, Nov. 18, 2014 7:29AM EST

Alan Detheridge worked as a senior executive in the oil industry until 2006, and is a member of the governing board of the Natural Resource Governance Institute.

There is a vitally important Canadian transparency law currently sitting before Parliament. If improved and passed, the Extractive Sector Transparency Measures Act will go a long way toward helping people in natural resource-rich countries hold their governments to account. But the oil industry is arguing for a weaker law.

I worked for Royal Dutch Shell for 30 years, including as a vice-president of Shell Canada, and I am concerned by the industry’s efforts to undermine this legislation. The law would require oil, gas, and mining companies in Canada to disclose their payments to governments around the world. This legislation is meant to fulfill Prime Minister Stephen Harper’s G8 commitment to establish “new mandatory reporting standards for Canadian companies operating in this sector.”

Extractive companies can bring great wealth to the countries where they operate. Resource revenues have the potential to drive economic growth and reduce poverty. However, in some resource-endowed countries, these revenues are lost to corruption and mismanagement, with few benefits flowing to the general population.

Providing government officials, parliamentarians, journalists and civil society groups with information about companies’ payments to governments for oil, gas and mining projects enables them to hold their governments to account. Closer to home, the more we can do to help developing countries effectively use their own domestic tax base (billions of dollars of which come from oil– and mineral-sector payments), the less strain there will be on the foreign aid budget funded by Canadian taxpayers.

When I was at Shell I helped launch the Extractive Industries Transparency Initiative (EITI), a global, voluntary effort to improve revenue transparency. But voluntary disclosure is not sufficient. Regulation, such as the proposed legislation, fills the gap where transparency is needed most – in countries where payments remain secret.

That is why I testified before the U.S. Congress in support of similar transparency legislation, which subsequently became law in 2010. I also supported the well-defined and comprehensive European Union rules agreed in 2013 that national governments across Europe are now enacting.

The Canadian mining industry has already gone on the record proposing strong transparency rules. We should applaud its members for taking such a proactive approach. Unfortunately, the oil industry is working against them.

First, the oil industry is opposed to publishing information for individual projects. Rather than provide meaningful information at the project level for communities and local governments to use, some major oil companies, including Shell, argue that they should be able to report at aggregated levels. In Canada, the current legislative draft does not require project-level reporting. That is a significant weakness in legislation that the government of Canada said would be established with a view to “ensuring Canada’s framework is consistent with existing standards and aligned with other G8 countries.” Legislation passed in the U.S. and EU categorically requires project-level reporting.

Second, some oil companies want exemptions from reporting payments when they operate in countries with laws or contracts that prohibit such disclosure. Apart from failing to provide transparency where it is needed most, allowing exemptions would only serve to encourage those governments who wish to withhold information from their citizens to enact such legislation. Failure by Canada to rule out exemptions would undermine the fundamental purpose of the proposed transparency law, which is to place information into the hands of those that can use it to effect positive change. The Canadian rules should align with EU legislation, and not permit exemptions.

Canada is a world leader in promoting transparency and accountability, and so I hope that lawmakers will resist this pressure from the oil industry. The Canadian legislation should require reporting in all countries, and for every project, without exception. Reply With Quote
Oct 31, 2017 | 08:22 2 Canada is a leader in promoting transparency and accountability. Really???? Maybe you should wake up
More fake news from the leftards. Reply With Quote
Oct 31, 2017 | 08:36 3 I dont know whether that is true or not. But you missed the point of the article. Take a look at this website:

https://www.nrcan.gc.ca/mining-materials/estma/18198
This is the ESTMA The Extractive Sector Transparency Measures Act that requires oil companies and mining companies to report what they pay governments in taxes and royalties.

This is what the Guardian used for the article "Revealed: oil giants pay billions less tax in Canada than abroad"

https://www.theguardian.com/environment/true-north/2017/oct/26/revealed-oil-giants-pay-billions-less-tax-in-canada-than-abroad

So when are you "rightards" going to admit that we are highly subsidizing the oil industry and giving away our resources for less than Nigeria and Sierra Leone? Reply With Quote
Oct 31, 2017 | 08:51 4 CC They will never admit anything unless it come from their conservative GOD Reply With Quote
Oct 31, 2017 | 08:57 5 It's not all about royalties there is something called jobs and the spin off industries and all these people pay tax. It's a snowball effect that pays way more than a few royalty dollars. Reply With Quote
blackpowder's Avatar Oct 31, 2017 | 09:47 6 An effort to expose blood money not a bad thing. As I read it anyway. Reply With Quote
Oct 31, 2017 | 11:09 7 [QUOTE=sofa.king;360224]It's not all about royalties there is something called jobs and the spin off industries and all these people pay tax. It's a snowball effect that pays way more than a few royalty dollars.[/QUOTE
Jobs. ?? does not refinery equal jobs.?? Reply With Quote
Oct 31, 2017 | 11:12 8 Sofa king Doesn't building refinery and processing our own resources equal JOBS, and don't give me the money thing all you have to do is jack up the price like the oil cos do and you are rolling in the cash. Reply With Quote
fjlip's Avatar Oct 31, 2017 | 11:23 9
Quote Originally Posted by Horse View Post
Sofa king Doesn't building refinery and processing our own resources equal JOBS, and don't give me the money thing all you have to do is jack up the price like the oil cos do and you are rolling in the cash.
Go ahead TRY build a refinery...the environmentalist will stop you dead...impossible! thanks leftards Reply With Quote
Oct 31, 2017 | 20:45 10 The trade off is jobs indeed, but as you drive by a SAGD plant pumping thousands of barrels a day out of the ground with limited manpower on a crappy patched highway (Turtleford/Edam) highway rutted from truck traffic, it's hard not to ponder the equation, especially given that Sask recently transferred more tax to the agricultural land base, an industry that also creates thousands of jobs. It is a balance indeed between economic developement and taxation, however in the future no longer will barrels of oil pumped equal more long term jobs given SAGD technology. With this technology it will be prudent to look at more royalty based formula for revenue. Reply With Quote
Nov 1, 2017 | 07:37 11 This is why the The Extractive Sector Transparency Measures Act (ESTMA) that requires oil companies and mining companies to report what they pay governments in taxes and royalties is so important.

I am not sure if it is being done on a project by project basis. The oil companies didn't want to report period and were especially concerned about reporting project by project.

Once we know what resource companies are paying and what profit levels they have it will be easier to decide what is a fair royalty rate. We also need to look at what other countries and regions are receiving. According to Guardian article it is low.

It is in our interest as citizens and owners of the resources to know what we are receiving. There has to be a balance between economics and the public good. Especially since the resource will run out and is not sustainable.

Maintaining jobs and economic output is important as we slowly transition away from oil. But there is no reason to give away the resource and not get our fair share for the present and to plan for the future. Reply With Quote
Nov 1, 2017 | 09:01 12 Do they report what shares are given to politicians? Reply With Quote