Europe to impose transparency measures for mining firms

EUROPE IS set to impose mandatory transparency measures for mining and forestry companies, requiring them to detail their financial relationships with foreign governments, according to a top European Union official.

EU internal market commissioner Michel Barnier said the move would come as Brussels revised existing rules on transparency this autumn. The new transparency obligations – which would cover money flows, such as tax payments and royalties to foreign governments – were likely to extend beyond “extractive” industries such as mining and energy and cover other “primary materials” businesses, such as forestry.

However, Mr Barnier stressed that Brussels was inclined to favour a “country-by-country” approach to disclosures, rather than more detailed “project-by-project” requirements.

He emphasised that Brussels was looking closely at the competitive position of Europe-based companies and would want to measure the costs this policy would impose before making final decisions.

“We are going to oblige the extractive sector to be transparent,” Mr Barnier added. “We must establish rules of the game which are equitable and effective globally.”

The proposed measures could affect Irish-listed exploration companies with substantial overseas interests, such as Tullow Oil.

The US has already included similar requirements in its Dodd-Frank reform legislation. European countries – including the UK – have been pushing Brussels to take a similar line in an effort to crack down on corruption.

Separately, Mr Barnier indicated that Brussels was tending towards a new category of “organised trading facilities” when it revised securities market rules to cover many of the new electronic trading platforms and facilities.

Financial market structures have changed significantly since the markets in financial instruments directive – which sets out rules for Europe’s securities industry – came into force about four years ago. – (Copyright The Financial Times Limited 2011)