BRUSSELS (Reuters) - European Union negotiators on Tuesday reached a deal on a law that will make oil, gas, mining and logging firms declare payments to governments, as part of efforts to end poverty in resource-rich nations by ensuring the wealth is shared out.
It echoes tough legislation passed in the United States last year, which has led to a court challenge brought by industry body the American Petroleum Institute.
Now that the EU text has been decided, it requires endorsement from parliament and member states, which should be a formality.
Ireland, holder of the rotating EU presidency, has said it aims to finalise the dossier, part of a wider law to simplify accountancy requirements, before the end of its presidency in June.
European Commissioner Michel Barnier, who is in charge of regulation, welcomed Tuesday’s deal as bringing “a new era of transparency to an industry which is far too often shrouded in secrecy”.
A major sticking point in talks, which dragged on over months, was the issue of exemptions. Oil companies said they were necessary to take account of the law in certain regimes in which they operate, but major EU governments, including Britain and France, supported watertight requirements.
The EU law orders firms to report payments at project as well as country level, beginning at a threshold of 100,000 euros (85,142 pounds), higher than some campaigners had hoped, but far below the million-dollar level resource firms had said was practical.
Oil companies contacted by Reuters did not have any immediate comment, while non-governmental organisations were enthusiastic, although Oxfam said the EU could have been even bolder and included the telecommunications and building sectors.
Bono, co-founder of campaign group ONE said Tuesday’s deal was “a game-changing breakthrough”.
“Transparency is one of the best vaccines against corruption, and now citizens the world over will know what their country’s resources are really worth,” he said in an emailed statement.
The EU deal goes further than the U.S. law in that it includes the logging sector and covers large unlisted EU companies, as well as listed firms.
“Revenues from the sector are too often vulnerable to corruption and mismanagement,” Joseph Williams of campaign group Publish What You Pay said. “The oil, gas and mining sectors have the potential to bring great wealth to countries if they are managed well.”
Together with the U.S. rules, the EU rules will cover 90 percent of the world’s major international extractive companies, Transparency International EU said, and urged further efforts at G8 and G20 level to bring in the rest.
Editing by Bob Burgdorfer