June 16:
Today Britain took a big step towards the kind of transparency that will help businesses and investors everywhere know who they are dealing with. An agreement was reached between the UK Government, extractive companies and civil society which will see oil, gas and mining companies operating in the UK disclose their real, ultimate owners. [1]
This kind of openness really matters. Global Witness has revealed in several high profile cases (Congo Secrets Sales, OPL 245) how those with something to hide are able to use layers and layers of anonymously owned companies to do so. As we have seen in the case of Nigeria’s Missing Billion, this makes the theft of vast amounts of public money possible. So revealing who’s actually controlling extractive companies helps prevent conflicts of interest that enable corrupt officials to siphon off cash that could pay for schools, hospitals and skilling people up in countries that badly need it.
Last year, the UK signed up to the Extractive Industries Transparency Initiative (EITI), a global standard which aims to promote open and accountable management of natural resources. The agreement reached today is the first of its kind under the new EITI standard, negotiated in 2013, which calls for full disclosure of the ultimate ‘beneficial owners’.[2]
The UK should be congratulated for taking the lead on this critical issue. Today’s move comes after the government’s commitment earlier this year to create a register of the real owners of companies, another world first that puts the UK and the front of the global turn towards transparency.
Under the agreement, companies will have to disclose who owns them and provide details to allow the media and civil society to identify them. They will also need to disclose any owners who are “politically exposed” - that’s a technical terms for officials who have access to state funds, so could be a corruption risk - both here in the UK and abroad. This is crucial to shed a light on any political links that companies extracting natural resources have and ensure contracts are awarded on merit not cronyism. A senior company official will need to verify the information they are providing which will help ensure accurate and reliable information is provided. All the information gathered will be published in the UK’s first EITI report which is due in early 2016.
The UK has today proved to the world that greater transparency in the ownership of extractive companies is completely feasible if business, civil society and Governments work together. Not just feasible, but desirable – it’s common sense that investors, businesses, governments and citizens who want to know who they are doing business with.
The rest of the EITI should take heed of these important developments and ensure that they continue to be at the forefront of global change by ensuring beneficial ownership disclosure becomes a requirement on all implementing countries from January next year.
For further information about ending anonymous companies see: https://www.globalwitness.org/campaigns/corruption-and-money-laundering/anonymous-company-owners/
Source: https://www.globalwitness.org/blog/big-win-open-business-uk-oil-gas-and-mining-companies-disclose-real-owners/
Today Britain took a big step towards the kind of transparency that will help businesses and investors everywhere know who they are dealing with. An agreement was reached between the UK Government, extractive companies and civil society which will see oil, gas and mining companies operating in the UK disclose their real, ultimate owners. [1]
This kind of openness really matters. Global Witness has revealed in several high profile cases (Congo Secrets Sales, OPL 245) how those with something to hide are able to use layers and layers of anonymously owned companies to do so. As we have seen in the case of Nigeria’s Missing Billion, this makes the theft of vast amounts of public money possible. So revealing who’s actually controlling extractive companies helps prevent conflicts of interest that enable corrupt officials to siphon off cash that could pay for schools, hospitals and skilling people up in countries that badly need it.
Last year, the UK signed up to the Extractive Industries Transparency Initiative (EITI), a global standard which aims to promote open and accountable management of natural resources. The agreement reached today is the first of its kind under the new EITI standard, negotiated in 2013, which calls for full disclosure of the ultimate ‘beneficial owners’.[2]
The UK should be congratulated for taking the lead on this critical issue. Today’s move comes after the government’s commitment earlier this year to create a register of the real owners of companies, another world first that puts the UK and the front of the global turn towards transparency.
Under the agreement, companies will have to disclose who owns them and provide details to allow the media and civil society to identify them. They will also need to disclose any owners who are “politically exposed” - that’s a technical terms for officials who have access to state funds, so could be a corruption risk - both here in the UK and abroad. This is crucial to shed a light on any political links that companies extracting natural resources have and ensure contracts are awarded on merit not cronyism. A senior company official will need to verify the information they are providing which will help ensure accurate and reliable information is provided. All the information gathered will be published in the UK’s first EITI report which is due in early 2016.
The UK has today proved to the world that greater transparency in the ownership of extractive companies is completely feasible if business, civil society and Governments work together. Not just feasible, but desirable – it’s common sense that investors, businesses, governments and citizens who want to know who they are doing business with.
The rest of the EITI should take heed of these important developments and ensure that they continue to be at the forefront of global change by ensuring beneficial ownership disclosure becomes a requirement on all implementing countries from January next year.
For further information about ending anonymous companies see: https://www.globalwitness.org/campaigns/corruption-and-money-laundering/anonymous-company-owners/
Source: https://www.globalwitness.org/blog/big-win-open-business-uk-oil-gas-and-mining-companies-disclose-real-owners/
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