Oil multinationals must declare Third-World payments, says MEP

Date: 12/06/03

By Martin Banks

MILLIONS of euro are being "embezzled" every year due to lack of transparency in payments by oil multinationals to Third-World nations, MEPs will claim at a public hearing today (12 June).

The hearing, at the European Parliament, will be told that payments from extractive oil and mining industries for the right to operate in such countries have been "squandered" by corrupt governments.

Oil giants such as Shell and BP are now being challenged to support mandatory disclosure of such payments.

UK Socialist Richard Howitt, who has organized the hearing, says: "We are saying to these companies: 'Publish what you pay'.

"The only way to stop companies from being played off against each other is for them to support binding EU legislation."

Igho Herbert, from the independent Nigerian-based non-governmental organization (NGO) Helping Hand, and Simon Taylor, from another NGO, Global Witness, will present evidence at the hearing of legitimate revenues allegedly being squandered by a lack of transparency and accountability.

Millions of euro per year of Angola's oil receipts were reportedly "missing" for the last five years - around a quarter of the state's total income.

"Meanwhile, 75 of the population are forced to survive in absolute poverty on less than a euro a day and one child dies of preventable diseases and malnutrition every three minutes," says Herbert.

Howitt, the Parliament's spokesman on corporate social responsibility, added: "BP had planned to publish all the payments they made in Angola but came under such intense pressure that, with threats of having their contract terminated, they backed down.

"We are asking companies like BP to explain why such threats forced them to retract a commitment made in 2001 to publish their payments. This is the time for them to go on the record."

A BP spokesman said that the British oil giant was "committed, within our contractual and legal obligations, to full transparency wherever we operate", but warned that "no one company can bring about change on its own".

"Until 2001, our oil production in Angola was minimal but we have published the taxes we paid to the Angolan government," he said.

A spokesman for Shell said the company "fully supported" the 'Publish What You Pay' campaign. However, he added, "this must be fully inclusive and include not just companies such as Shell, but governments, NGOs and all relevant agencies.

"Revenues from extractive industries are by far the biggest source of income for some countries and, if properly managed, can make a huge difference to the people of such countries," he added.

But, for Richard Howitt, it is vital to make sure that this income does not vanish into corrupt leaders' pockets.

"With new EU-wide transparency rules currently before Parliament, there is a real opportunity for the people of desperately poor countries to stop seeing their oil income embezzled and squandered with the complicity of our European oil companies," he said.