UK Prime Minister David Cameron gave a speech in Lagos, Nigeria, where he encouraged the European Union to adopt “Publish What You Pay” rules for the mining, oil, and gas industries. According to GFI estimates, Nigeria loses over $14 billion each year to illicit financial flows, far more than any other African nation, with its energy sector being by far the most prominent contributor.
Task Force member Christian Aid was quick to praise the development, in particular these comments from his speech:
‘Requiring companies to reveal what they pay with regard to each project they undertake is one step towards curtailing such widespread tax abuse, and will help prevent the bribing of politicians to secure contracts.
‘But EU legislation needs to go further. In order to ensure companies are paying the right amount of tax, we need more information on how the taxes they do pay relate to the profits they make.
‘The money lost to poorer countries through tax dodging could make a significant difference to services such as health and education in the countries affected.’
In the speech, he praised U.S. efforts to improve transparency in those industries, through Section 1504 (the Cardin-Lugar provision) of the Dodd-Frank financial reform bill. As previously mentioned, delays by the SEC have prevented full implementation of those practices to date.
Endorsement of improved financial transparency in the EU is a major positive development. Rules similar to Dodd-Frank will help reduce international corruption—improving the daily lives of millions in the developing world and allowing free and open competition in the world energy market, thereby improving the well being of consumers as well.
Disclaimer: Unless specifically stated to be the views of the Task Force, the opinions expressed on this blog are solely the opinions of the individual blogger and are not necessarily those of the Task Force on Financial Integrity & Economic Development.