MEPs seek to strengthen corporate transparency

MEPs will next week attempt to get the European Commission to tackle dubious practices employed by western companies operating in corrupt countries by strengthening EU legislation on corporate transparency.

The EU-wide transparency directive is currently being reviewed by the European Parliament. It aims to open up information flows in EU financial markets by getting companies to reveal details such as the identity of major shareholders. It must be transposed into national law by January 2007.

UK Socialist MEP Peter Skinner wants to force through the eleventh-hour inclusion of an international initiative called the extractive industries transparency initiative (EITI) before Parliament votes on the directive next week (24 October).

EITI aims to improve governance in resource-rich countries, many of which are located in Africa, by getting oil, gas and mining companies to disclose all payments made in exchange for extraction rights.

According to a report published two years ago by human rights group Global Witness, a quarter of oil revenue remains unaccounted for each year in Angola. In Congo Brazzaville, corrupt practices by the now defunct French oil company Elf Aquitaine left the government $6.4 billion (€5.1bn) in debt. Major European companies continue to prop up repressive regimes in countries such as oil-rich Equatorial Guinea.

"What we have now is the golden gag," said Skinner. "What we’re saying is that’s not good enough. I am calling on the Commission to allow us to add it [EITI] to the directive to show… what they are doing to reward companies playing ball and to deal with those who are not," he added.

"This problem has been one of the sources of many civil wars," said Michel Roy, who co-ordinates work on the French ‘publish what you pay’ campaign. There should be international norms applicable to all countries. All companies come to capital markets looking for funds, so if there are stock exchange rules requiring transparency, all will be obliged [to disclose payments]."

EITI was publicly promoted by UK Prime Minister Tony Blair when launched in 2003 and is backed by a number of institutions including the International Monetary Fund and the World Bank.

The new measure will not have the force of legislation, but its inclusion in the preamble of the trans-parency directive would ensure that the issues at stake are given attention by EU institutions. "We’re calling on the Commission to stand by the voluntary initiative. If they don’t, we’ll be calling for legislation pretty soon," said Skinner.

MEPs will next week attempt to get the European Commission to tackle dubious practices employed by western companies operating in corrupt countries by strengthening EU legislation on corporate transparency.