Thank you for chairing the debate, Mr Benton, and for drawing our attention to the new clock regime, which is a very good innovation, particularly the advent of seconds. We can feel the anticipation of the countdown in the closing seconds of our speeches. I congratulate the hon. Member for Falkirk (Eric Joyce) on securing the debate. It has been an important opportunity to highlight what we are doing to increase transparency. I pay tribute to his hard work, particularly in his role on the all-party group on the African great lakes region.
I would also like to thank the hon. Gentleman for his kindness and understanding. When the debate was initially scheduled for a few weeks ago, I was suffering from the cold that was going round and had entirely lost my voice. It would not have been a particularly instructive debate in which to hear the Government’s view, because I would have been very much in listening mode only. I am glad we were able to reschedule. In doing so, it has changed from a half-hour to a 90-minute debate. I do not know whether that is pure good luck in the ballot or karma from the powers-that-be for the hon. Gentleman’s understanding. I am sure that we all appreciate having this opportunity, because we have been able to hear not only his views but contributions from other hon. Members.
In my summation, I shall outline the Government’s position and our commitment to transparency, in particular. I shall go through the latest developments on the EU rules and talk about corporate governance, with particular reference to reporting requirements and the composition of boards. I will also talk about the extractive industries transparency initiative, which several hon. Members mentioned. I will then deal with the impact of mining on the UK economy.
For far too long, the world’s poorest people have struggled to benefit from the vast natural resources in their countries. Millions of people in developing countries
languish in poverty while their corrupt Governments squander or hide large payments from foreign companies. Strong EU action to create a new global standard for transparency in the extractive industries is vital to help those citizens to hold their Governments to account. I am determined that the UK will play a leading role within the EU to make the most of opportunities.
The Government are keen that the mining industry, as well as other extractive industries, provides more information on the payments it makes. Countries rich in natural resources—the minerals that industrialised nations need—can use that wealth to boost economic growth and improve social conditions for some of the poorest people in the world, who badly need that. International mining developments have the potential to boost economic growth dramatically and provide a route out of poverty for resource-rich developing countries. All too often, however, such resources act as a curse, owing to the temptations of corruption that tend to go with them.
To provide some context, the value of exports of oil, gas and minerals from sub-Saharan Africa in 2009 was five times greater than the aid it received, and prices have risen since then. There is huge potential to unlock positive development. Botswana, Zambia and the Democratic Republic of the Congo top the global chart of mineral-dependent countries—those that depend on minerals for more than a quarter of their tangible exports. Well managed extractive resources can provide a big economic jolt, but citizens of such countries are too often unable to find out how much their Governments are paid for access to the resources or how the payments are reinvested, so there is no way to hold them to account.
The Prime Minister has expressed his strong support for the transparency agenda. When he spoke in Lagos in July 2011, he made clear his support for EU action to improve the information available at both country and project level. More recently, he reaffirmed his commitment to the UK leading efforts in the EU to require oil, gas and mining companies to publish details of the payments they make to Governments. The Deputy Prime Minister has also been active in this regard, and last month he and I met campaigners, including that rather well known supporter, Bono. The Deputy Prime Minister has been a strong advocate of transparency and in particular of ensuring that the agenda is driven forward at the centre of Government with the important support of the Prime Minister.
The hon. Member for Falkirk and others talked about the accountancy and transparency directives and where we are with them, and I hope to update the House today. The Government are keen that the EU agrees strong reporting requirements—rules that could improve the lives of millions of people around the world. For the first time, the extractive industries will have to report the payments that they make in all countries in which they operate. It is proposed that such companies, whether listed or not, publish details of what they pay to each level of government—nationally, regionally and locally. Crucially, they will also have to report payments to state-owned organisations, such as energy providers. That will give citizens the information that they need on, for example, the taxes, royalties and other payments made in host countries. If we get the measures right, it will have a huge impact in helping to
combat corruption in developing countries and ensure that natural resources benefit all the citizens of the countries where they are mined.
The hon. Member for Falkirk mentioned the action in the United States, which has already agreed new rules, as we know. The US Dodd-Frank Act requires listed companies to report to the Securities and Exchange Commission each year. That means giving details of the payments, whether in money or in kind, that they make to Governments. The new legislation, published in August, raised the bar on global transparency standards, which I warmly welcome. US-listed companies will have to comply with a set of strict rules that will considerably increase the amount of information available to citizens. Although the EU has been discussing the issue for a long time—things tend to take a long time with the EU—the publication of the US rules has given us an opportunity to go further than we had thought possible in the EU, because, on exemptions, project-level reporting and the threshold for reporting, the rules are more ambitious than many had expected.
In response to that bold move by the US, the coalition Government are pushing for the EU to match the US approach, on, in particular, project-level reporting and setting a low threshold above which payments must be disclosed. The threshold is $100,000 under the US rules, and it would be helpful if the EU agreed to a similar amount in negotiations. It is worth mentioning in passing that if standards in the EU and US were, as far as possible, shared, it would help companies complying with the transparency rules, because it would mean one set of requirements to comply with, rather than extra complexity and therefore extra cost. In America, there will be no exemptions from reporting, which has been a real bone of contention.
Concerns have been raised concerns with my predecessors and me that the disclosure of payments made to a Government might be prohibited by the criminal law in some countries. I have yet to see the titles of specific Acts of Parliament in specific countries that would prohibit that type of transparency. I encourage anyone reading the debate in Hansard who strongly believes that exemptions are absolutely necessary to furnish me with the titles of the Acts that people would be unable to comply with, in whatever foreign country. I will happily receive and respond to such information, if it exists, as I expect it does not. When mining companies based in the United States and Europe have to provide the information, that will cover a large proportion of the extractive industries operating in the developing world.
The hon. Member for Hartlepool (Mr Wright) raised the challenge of the EU process. I am glad that he did not say it was my fault that things were taking a while in Europe; I assure him that it is not. I may have been in this role for only two and a half months, but my predecessors were very active, as am I, on the issue. Since January, there have been 16 meetings of the Department, campaigners and the industry, five of which included Ministers. Since I took on this role, I met members of the Publish What You Pay coalition and representatives from the extractive industries on 12 September, and I again met members of Publish What You Pay on 25 October. We are therefore in close contact on the issues, because it is important to make progress. My right hon. Friend the Secretary of State
for Business, Innovation and Skills had an article in the weekend newspapers on this issue, and we are determined to keep up the pressure.