Mining News

Federal, provincial and territorial governments agree to greater mining industry transparency but challenges remain

Posted by Alana Wilson on 9/12/2013 10:38:07 AM

By Alana Wilson

According to Shawn McCarthy’s article in the Globe and Mail September 4th, the federal, provincial and territorial resource ministers are in agreement that Canada should require mining companies to disclose what they pay to various levels of government both in Canada and for their foreign operations. This agreement was reached last week at a meeting of natural resource ministers in Yellowknife where provinces and territories have agreed to work with the federal government in support of commitments made by Prime Minister Stephen Harper earlier this summer at the G8 summit in London. Furthermore, they have agreed on a deadline of 2015 to implement the new standards.

Despite this agreement, challenges remain in how to actually implement publish-what-you-pay. The mining industry has advocated for mandatory disclosure of payments to government and—in a joint report between the Mining Association of Canada, Prospectors and Developers Association of Canada, Publish What You Pay- Canada and Revenue Watch Institute—suggested that such regulations should be through provincial securities commissions.

However, in the USA, where such an approach was taken, legal challenges have delayed its implementation. The Securities and Exchange Commission (SEC) drafted rules to meet the 2010 Dodd-Frank Wall Street reform laws including mandatory reporting of payments to foreign governments, also known as the Cardin-Lugar rule. Such reporting was successfully challenged in court by the oil industry and earlier this week the SEC decided not to appeal a July ruling that tossed out the mandatory disclosure of payments. As reported by Ana Komnecic on Mining.com:

Opponents of the regulation argue that it hinders competitiveness and would be very costly to implement. Business groups also point out the fact that some countries such as Angola and China have laws which mandate the exact opposite: Resource extraction companies may not disclose payments.

The Canadian Association of Petroleum Producers has already expressed concerns regarding the burden that disclosure regulations in Canada could impose, although they do support the principle of transparency.

McCarthy also notes ongoing challenges between federal and provincial securities regulators, whose cooperation would be required:

Proponents fear the push for publish-what-you-pay laws will become enmeshed in the ongoing dispute between Ottawa and some provinces over a proposed national securities regulator, with the provinces wary that the Conservative government will use it as Trojan Horse to enter what they claim as exclusive jurisdiction.

The potential extension of disclosure rules to First Nations has also raised concerns although the mining industry and its NGO partners have recommended that it that it be “taken off the table to avoid a lengthy battle that would delay broader implementation of the rules”. Ottawa’s position on this is yet unclear.

With all of these issues, getting agreement from the federal, provincial and territorial resource ministers was likely the easy part. Finding a way to implement publish-what-you-pay by 2015 will undoubtedly more challenging.




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