Share this story:
Oxfam welcomes progress but much work for corporates remains to catch up to global norms, especially US companies
A new Oxfam survey of 40 oil, gas and mining companies has found that they are warming to the idea of disclosing their lucrative deals signed with governments, but much work remains to be done. Oxfam welcomes the progress made by major extractive companies in supporting the move to open up contracts and urges them to work quickly to support the emerging global norm.
“Oil, gas and mineral rents totaled $1.7 trillion in 2015 – more than the total GDP of the world’s poorest countries – and these deals can influence a country’s development trajectory for generations. However only a small number of people know about the terms of these projects,” said Isabel Munilla, author and Policy Lead for Extractive Industries Transparency at Oxfam America.
“In closed-door negotiations, multibillion-dollar oil, gas and mineral deals spanning decades are made between company heads and select government officials. Secrecy around these huge deals creates fertile ground for corruption, putting local communities at risk and undermining democracy,” said Munilla. “Contract disclosure is a well-established strategy to address these risks but the extractives industry is still lagging behind the global norms.”
The Contract Disclosure Survey 2018 published today in Nairobi highlights the improvements in oil, gas and mining contract transparency and provides a snapshot of the positions of the industry’s major actors. Over the past 10 years, the International Monetary Fund, the World Bank’s International Finance Corporation, the European Bank for Reconstruction and Development and the Extractive Industries Transparency Initiative (EITI) have all endorsed the need to disclose oil, gas and mining contracts. Civil society groups working to promote better governance of the extractive sectors, including Oxfam and Publish What You Pay, a global coalition with more than 700 members, now include contract disclosure as part of their advocacy strategies.
“A range of international institutions and civil society groups are leading the call for more transparency of oil and mining deals to stop the secrecy that creates serious risks for governments and communities,” said Munilla. “Our report shows there is a growing business case for transparency as well, to counter the public misconceptions and suspicions that can lead to protest and conflict and costly delays for company operations.”
Nearly half (18) of the 40 companies assessed in the Oxfam report support contract disclosure in some form. This includes some of the largest companies in the world including oil giants like Total, BP, Shell, Statoil and Brazilian state-owned Petrobras as well as mining giants BHP Billiton, Rio Tinto, Newmont, Freeport McMoran, Barrick and Vale.
But despite this notable advance, most companies that say they support contract disclosure do not have a concrete public policy that governs their actions. Only five companies have public policies available on their websites including Kosmos, Tullow, Total, Rio Tinto and PanAust. Kosmos and Tullow led the pack by including supportive contract disclosure policies alongside contracts disclosed on their websites.
Over half of the companies assessed by Oxfam’s survey are silent or have no supportive language on the issue. This is despite the fact that the vast majority of the companies assessed publicly support the EITI, the global standard for oil, gas and mining transparency which endorses contract disclosure.
“We have seen some encouraging progress but most companies are still behind the curve,” said Munilla. “With many billions at stake around oil and mining projects, citizens are anxious for companies - especially EITI-supporting companies - to show leadership and put words into action.”
Oxfam calls on all oil, gas and mining companies to adopt full contract disclosure policies and proactively disclose contracts on their websites.