The IASB Comes Clean: It Doesn’t Serve the Poor

A new strategy review by the Trustees of the International Accounting Standards Board has clarified that its financial reporting standards will focus on the needs of ‘investors and other market participants’. This is a slap in the face for civil society, which has repeatedly made the case for the IASB to properly address the needs [...]

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India Steps Up Campaign to End Tax Haven Secrecy

Indian finance minister Pranab Mukherjee called for international pressure to force non-cooperative jurisdictions to share information about the money they hide at an Asian Development Bank Governors’ seminar last week.

This comes in the wake of a series of moves by India to crack down on the huge black money flows out of the country. Earlier in the year Mukherjee made similar comments in the build up to a meeting of G20 finance ministers, arguing for an “effective multilateral platform for automatic, spontaneous and requested exchange of information”.

India also demonstrated its commitment to financial transparency by joining the Task Force on Financial Integrity and Economic Development. The latest comments indicate strong support for the Task Force’s fourth pillar, automatic cross border exchange of tax related information. This would allow governments to collect information about the income and assets of non-residents and share information automatically with other jurisdictions, with proper safeguards. Ultimately this would bring in more tax revenues for public services, infrastructure and development as rich elites and unscrupulous multinationals would not be able hide their money so easily.

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Shell’s Financial Transparency Claim Rings Hollow

Better transparency in the extractive industries is essential, but, in all sectors, multinationals take advantage of the secrecy offered by the opaque financial system to avoid contributing to the societies from which they benefit. For this reason, country by country reporting must become a mandatory requirement for multinationals in all sectors – and for oil company executives like Peter Voser to attack such transparency suggests not only being out of touch with the political times, and indeed his own company’s position, but also a lack of concern for some of the poorest people on the planet.

Wednesday, the Financial Times reported that Voser, the CEO of Royal Dutch Shell, came out vociferously against the U.S. Dodd-Frank Act requiring companies operating in extractive industries to disclose publicly the payments they make to governments. This landmark legislation has been hailed on all sides by civil society organisations, investors and revenue authorities around the world as a significant step towards greater transparency for the sector. This improved transparency will allow for much greater accountability of companies and governments to citizens in resource rich countries, who have in too many cases not benefited from the enormous riches under their feet.

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The Unaccountable Setter of Accounting Standards

Twenty besuited men and women shuffle and blink around a large conference table at 9 am in the heart of the City of London, with almost panoramic views from their fourth floor room. To the unknowing eye this might seem like the start of yet another corporate board meeting. Yet these people hold power not only over the future of a company, but the lives of literally hundreds of millions of people living in poverty around the world.

This is the International Accounting Standards Board’s (IASB) October meeting, and the first item on the agenda is its ‘extractive activities’ project. The IASB discussed the comments received on a discussion paper it commissioned, which explored the possibility of a new international financial reporting standard for the extractives industry.

Many mining, oil and gas companies operate in poverty stricken and unstable developing countries. It has long been suggested that the lack of transparency around these industries facilitates massive corruption – companies are not required to declare the payments they make to governments, so these governments cannot be held accountable for the revenue they receive.

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