The Extractive Industries Transparency Initiative(EITI) on Monday released new reporting guidelines for companies buying oil, gas and minerals from governments.
The guidelines promote a consistent approach to the disclosure of payments to states or to state-owned enterprises.
The scale and economic significance of payments for these commodities make them a matter of public interest, the organisation said.
It added that at approximately $1.2 trillion to date, in-kind payments alone make up almost half of total government revenues declared through the EITI.
Data from leading commodity traders shows that payments for purchases made from governments far exceed tax payments, the EITI said.
The new guidelines can be applied by any company in relation to any jurisdiction, but are particularly relevant where oil, gas or minerals are being sold on behalf of the state in countries implementing the EITI Standard.
Together with reporting by governments undertaken in accordance with the 2019 EITI Standard, they enable stakeholders to form a more complete picture of the terms of sale of mining, oil and gas resources.
Greater transparency mitigates the risks associated with such trades, which include revenue leakages, misallocation or diversion of revenues, inconsistent terms of trade, conflicts of interest, bribery, corruption and state capture.
Welcoming the guidelines, EITI Board Chair Helen Clark said: “Commodity trades are essential to the global economy. They play an important role in the global flows of goods that underpin economic growth. These guidelines will help shed more light on the substantial commodity trades involving purchases of oil, gas and minerals from public entities.”
State Secretary Marie-Gabrielle Ineichen-Fleisch, Director of the Swiss Confederation’s State Secretariat for Economic Affairs (SECO) said: “I am delighted that SECO has been able to support the work of the EITI on commodity trading transparency. The guidelines reflect the consensus view of a wide range of stakeholders. I urge all trading companies – including those domiciled in Switzerland – to use the guidelines to build trust in a more transparent and accountable commodity trading sector.”
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The EITI’s Working Group on Transparency in Commodity Trading was the driving force behind the guidelines.
Participants include representatives of governments, industry, commodity traders and civil society.
The guidelines cover five key steps to data publication, including mapping selling entities and transactions; determining the data to be disclosed, including the level of aggregation of the data; providing data assurances; communicating disclosures to selling entities; and determining the way in which data is presented and published.
The guidelines also cover two special cases- swap sales and resource-backed loans, EITI said on Monday.
The guidelines can be applied with immediate effect and are available, with supporting documentation, on the EITI website.