The law which introduces the obligation for the petroleum, gas, mining and forestry industries to publish all payments made to governments, project by project in each country where they carry out exploitation or exploration activities, was passed by Parliament on 17 December. This law transposes into the French legal system the European transparency and accounting directives passed by the European Parliament in June 2013.
After the United Kingdom at the beginning of December, France is the second European country to transpose these directives. The French members of the coalition Publiez Ce Que Vous Payez (PCQVP) [Publish what you pay] [1] as well as those of the “Paradis Fiscaux et Judiciaires”[Fiscal and judicial paradises] platform recognize that this is an important step towards transparency and the struggle against corruption in a large number of countries rich in natural resources.
“Two-thirds of the poorest populations live in countries rich in natural resources. This law will enable global standards on transparency and governance to be strengthened in those sectors where obscurity has deprived the people of essential income for financing public services and infrastructure necessary to their development,” emphasizes Martin Willaume, coordinator of the PCQVP coalition in France.
From 1 January 2015, large mining, petroleum, gas and forestry companies registered and/or listed on the stock market in France, such as Total, Areva or Eramet, will have to make public all payments equal to or greater than 100,000€ made to any national, regional or local authority of a third party country, project by project in each country of exploration or exploitation. The first reports on 2015 activity will be published in France in 2016.
“This law is a step forward for transparency in Africa. We will be able to obtain the details of payments made by French companies like Total to our government. That will allow us to ask our country to be accountable, so that this income from petrol benefits everybody. These reports will be available free on the internet and it is important that they can be published in a usable and open format,” adds Brice Mackosso, coordinator of the PCQVP for the Republic of the Congo.
With these directives, the European Union joins a global movement for transparency in the extractive industries, similar laws already existing in the United States of America and in Norway, while others are currently being debated in Canada. Delayed by a complaint from the petroleum industry lobby, the United States must act quickly so that the federal organization for the regulation of markets, the Securities and Exchange Commission, introduces no further obstacle to the application of the Dodd-Frank law voted in 2010 and guaranteeing reporting country by country and project by project equivalent to that in the European Union.
If the vote on this French law constitutes important progress in the struggle against corruption, it remains, however, an opportunity missed by the French authorities to fight tax evasion. “The Parliament and the French government had a great opportunity there to put into action all the declarations of good will on the fight against tax optimization schemes, while the power of tax paradises to cause harm was still prevalent in all economic news this autumn,” reminded Lucie Watrinet, coordinator of the platform “Paradis Fiscaux et Judiciaires”.
In refusing to use this transposed law to oblige extraction and forestry industries to publish the figures on the activities they set up country by country – an obligation imposed on banks from this year – the members and senators are depriving French citizens and host countries of an indispensable tool for tracking the totals which are transferred via tax paradises, in spite of the provisions of the law on development voted in by the same Parliament last July [3].
In addition, the fine of 3,750€ anticipated for companies which publish partial or erroneous information does not constitute an effective, proportionate or dissuasive penalty in line with the demands of the European directive. Other countries, like the United Kingdom, have respected these instructions by putting in place a more restricive regime (legal proceedings against the directors and progressive fines).
While France prepares to put in place the Initiative pour la Transparence dans les Industries Extractives (ITIE) [Initiative for Transparency in the Extractive Industries], the members of PCQVP and the platform “Paradis Fiscaux et Judiciaires” will remain vigilant so that the efforts in favour of transparency in this sector may be continued.
