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It is encouraging to see Canada’s mining industry take the reins when it comes to improving transparency. When the federal government is touting the growing importance of the resource sector, it is more important than ever that resource companies try to win public confidence. A plan for mandatory reporting of all payments to governments — both foreign and domestic — is a step in that direction.
Such payments are often in the form of royalties and taxes to the governments of countries in which mining companies operate.
Until recently, Canadian mining companies only released information on a voluntary basis about how much money they paid governments. Under new American legislation — the Dodd-Franks Act — all resource companies listed on American stock exchanges are now required to release the information annually. That includes some of Canada’s resource giants, but it leaves many smaller companies out.
With about 60 per cent of the world’s mining companies listed on the Toronto Stock Exchange, a mandatory rule for Canadian companies would have a significant impact around the world.
Mining companies have plenty to gain from such a regulation — it should help build public support and social capital by underscoring the economic benefits resource companies bring to countries.
Transparency discourages corruption by giving citizens information with which to hold their governments accountable. Governments receiving millions in royalties from foreign mining companies will have to explain how they are using that money and, particularly, how the money is benefiting those directly affected by mines.
Shining a light on the money that passes from resource companies to governments also helps stabilize the investment climate in those countries, which attracts more business and promotes development.
Canada’s two largest mining groups, the Mining Association of Canada and the Prospectors and Developers Association of Canada, as well as the NGOs Publish What You Pay and the Revenue Watch Institute, are collaborating on the plan for mandatory reporting.
It is not only good for the public, but good for business.
Ottawa Citizen
For the original version of this editorial, please go to the Ottawa Citizen website: http://www.ottawacitizen.com/opinion/editorials/Mining+transparency/7208744/story.html