Canada’s mining industry has endorsed a plan that would require mandatory reporting to provincial securities commissions of all project-related payments they make to governments, a move that global transparency groups are hailing as groundbreaking.
In a final report to be issued Thursday, the country’s two largest mining organizations joined with transparency advocates to urge governments to move quickly to implement the plan, which they said would allow citizens in mineral-rich countries to hold governments to account for the resource revenues they collect.
The Mining Association of Canada and the Prospectors and Developers Association of Canada have launched a lobbying effort to persuade the Ontario Securities Commission and other provincial bodies to adopt the new rules.
Prime Minister Stephen Harper endorsed the idea of mandatory reporting for all resource companies at last year’s Group of Eight summit, and Natural Resources Canada is now consulting with provinces and industry on how to implement the policy for both mining and oil companies.
“This is a real game-changer globally,” said Claire Woodside, director at Publish What You Pay Canada, which worked with industry to finalize the plan. “It’s the first time an industry group has come out in support of mandatory transparency … so this is a real important moment for global momentum.”
Canada is a major force in international mining, with companies such as Barrick Gold Corp., Goldcorp Inc. and Teck Resources Ltd. operating around the world. Some 60 per cent of the world’s mining companies – operating in more than 100 countries – are listed on Canadian stock exchanges and subject to provincial securities regulations.
The new rules would require large mining companies to report, on a project-by-project basis, all payments above $100,000 and set the threshold for junior firms at $10,000.
“The framework is consistent with existing laws in the European Union and the United States, and moves us a big step closer to a global standard,” said Pierre Gratton, chief executive at the Mining Association. “A global standard is critical for this type of disclosure to create a level playing field for companies.”
Mr. Gratton said the regulators are now catching up to the industry and the federal government on the issue. “There was a little bit of a surprise that the industry was asking for more regulation,” he said with a laugh. “But there are business reasons for doing this, and sometimes additional regulations is actually good for business.”
However, the transparency movement suffered a setback in the United States last year when a court upheld an oil industry challenge and forced the Securities and Exchange Commission to reconsider its rules, or at least offer a better justification.
The Canadian Association of Petroleum Producers says it supports the principle of the mandatory publish-what-you-pay rules, but worries about the implementation.
CAPP vice-president Bob Bleaney said the industry wants not just publicly-traded firms but privately-owned and state-owned companies to be covered. He said CAPP would support reporting on a project-by-project approach, so long as there is some flexibility on the definition of what constitutes a project.