Revenue transparency is still a good will operation of oil and gas companies, therefore proactive forerunners may lead the way for best practices. The "2008 Report on Revenue Transparency of Oil and Gas Companies" from Transparency International (TI), the first publication of the Promoting Revenue Transparency (PRT) Project, takes a step towards a more coherent and deeper analysis of revenue transparency disclosure in the fight against corruption. The PRT Project is complementary to, yet distinct from the Extractive Industries Transparency Initiative (EITI): it supports EITI criteria, but also encourages companies and governments to go beyond payment disclosure and implementing anti-corruption policies and practices, revenue management and expenditure, contract transparency, accounting practices and regulatory issues.

The report relies exclusively on public information to evaluate 42 leading oil and gas companies in 21 countries in their revenue transparency policies, management systems and performance. Revenue transparency refers to three corporate actions: payments to host governments, operations and corporate anti-corruption programmes. On this basis, TI differentiates between high, middle and low corporate performers. The report concludes that revenue transparency is not yet a common practice in the oil and gas industry. The disclosure of revenue payments however is key to implementing stronger accountability mechanisms to monitor the use of natural resource wealth. Regulations and diverse reporting formats have an impact on company revenue transparency.

TI therefore recommends a proactive reporting of revenues on a country-by-country basis by oil and gas companies, mandatory reporting, the introduction of legislation mandating revenue transparency for all companies by producing countries, and harmonized reporting in an accessible format. The PRT Project will also publish an "Oil and Gas Host Governments Report", an "Oil and Gas Home Governments Report" and a "Mining Report" by 2010. (Meike Westerkamp)

The paper and further information about the PRT Project can be accessed at http://www.transparency.org/policy_research/surveys_indices/promoting_revenue_transparency
 

Published in: ECC-Newsletter, June 2008