* Resource firms object to project-level reporting
* Companies say back transparency, but not red tape
* Other campaigners say project-level reporting crucial
(Adds comment from campaign groups)
By Barbara Lewis
BRUSSELS, Oct 24 (Reuters) - European Union commissioners are expected on Tuesday to approve draft transparency rules for mining, forestry and energy, which resource companies said could impede access to oil, gas and other assets in disputed areas, such as the Caspian.
In a letter to the EU financial regulation chief, a group of companies objected to a proposal for reporting on a project-by-project basis, not just at a government level.
They said that was commercially and politically sensitive, would not add transparency and the rules failed to define what constituted a project.
“One example is oil or gas fields which cross borders, where governments are understandably careful to safeguard the confidentiality of the terms they offer to investors,” said a copy of the letter seen by Reuters.
“Further damage to competitiveness will be caused by the additional cost and administrative burden of project-level reporting,” it said.
Disputed areas key to European energy supplies include the Caspian, which the European Union has looked to as a means of reducing dependence on Russian gas, and the eastern Mediterranean, which has pitted Cyprus, scheduled to hold the EU presidency next year, against Turkey.
Campaign groups have said reporting at project level is the only way to ensure transparency and they too have lobbied the Commission.
“For investors, project-level reporting allows identification of payments which would otherwise be hidden by aggregated or country-level reporting,” said Joseph Williams, advocacy and communications officer for Publish What You Pay.
“For communities in resource-rich countries, citizens will be given crucial information to ensure their local and national governments spend the proceeds of natural resource wealth wisely.”
On Tuesday in Strasbourg, the College of 27 EU Commissioners is expected formally to adopt proposals for a review of the Accounting and Transparency Directive, an EU source said. They must then be approved by EU governments and lawmakers before becoming legislation.
The proposed directives would make it legally binding to disclose information, complementing the Extractive Industries Transparency Initiative (EITI), announced by former British prime minister Tony Blair in 2002. It establishes voluntary guidelines for reporting company payments to governments.
Many resource companies -- including signatories of the letter -- have backed the EITI.
Some analysts have said reporting of projects included in the new EU proposals replicated a part of the U.S. Dodd-Frank package of legislation that the U.S. regulator the Securities and Exchange Commission (SEC) was struggling to enforce.
“The SEC struggles to implement project-level reporting and keeps delaying its proposals,” said Daniel Brinkwerth of consultants GPlus Europe.
The SEC declined comment.
EU commissioner in charge of financial regulation Michel Barnier last week launched the bloc’s new package of regulations for financial instruments.
He said he could not imagine they would be less stringent than the U.S. regulations and was keen to avoid regulatory arbitrage -- whereby companies exploit differences between different legal regimes.
As holder of the rotating presidency of the Group of 20 leading economies, France has made toughening regulation a priority. This has brought stiff opposition from nations such as Britain, anxious not to lose business from its City financial district.
“Understandably, Commissioner Barnier and the French President want to do well in the international beauty contest around the upcoming G20 summit,” said Brinkwerth.
“But copying the one clause of Dodd-Frank which works the least reveals a ready-fire-aim approach to policies at a time when the European economy is already scrambling.”
(Additional reporting by Clara Ferreira Marques in London and Sarah Lynch in Washington; editing by Jason Neely and David Gregorio)
((Barbara.hm.Lewis@thomsonreuters.com)(+32 287 68 43)) Keywords: EU TRANSPARENCY/
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