Extractive Industries Transparency Initiative (Hansard, 29 April 2003)

§ The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos)
My Lords, we hope that G8 will endorse action on reporting of revenues and payments in the extractive industries under a voluntary compact being promoted within the initiative as part of a wider agenda on transparency and corruption. G8 endorsement would strengthen the commitment of stakeholders to the principles underlying the initiative and encourage governments and companies to come on board.

§ Baroness Whitaker
My Lords, I thank my noble friend for that positive Answer and I congratulate her on her work on the initiative. Does she agree with me, I wonder, that, although this is a relatively narrow and focused initiative, it can have a most powerful impact on enabling political stability and attracting foreign direct investment to developing countries?
570 But initiatives need exemplars to show the way. Can my noble friend say what progress is being made to identify pilot governments who will stick their heads above the parapet and take part; such as, perhaps, Botswana or Azerbaijan?

§ Baroness Amos
My Lords, first, I should like to thank my noble friend for her comments about my own role. I entirely agree with my noble friend that, although this is a very focused initiative, it is one that could have considerable impact, not least because it would mean that the citizens in the countries that were making these payments transparent would then have an opportunity to hold their governments accountable.
We are holding a seminar in June. There was one in February. A number of governments, companies and NGOs were involved in that seminar. A number of countries have expressed interest in being pilot countries. At this stage I am unable to tell my noble friend which those countries are; we are still at the discussion stage. But once we have agreement, which may be in June, I shall be happy to write in further detail to my noble friend.

§ Baroness Sharples
My Lords, will the noble Baroness please explain in plain English what the extractive industries transparency initative means?

§ Baroness Amos
My Lords, I entirely agree with the noble Baroness; it is rather a mouthful. The complementary initiative to this is called Publish What You Pay, which I think is much clearer. It is about ensuring that those companies in the oil, mining and gas areas which receive payments from governments—that those payments are published so that it is absolutely clear what payments those companies are making to those governments. At the moment those payments can go anywhere and may not actually be used for the good of the country.

§ Lord Hughes of Woodside
My Lords, but at least there was some tentative suggestion that the oil companies might admit what they had been paying to the Angolan Government and that the Angolan Government might admit how much money they had received. Does this agreement or the discussions include, for example, diamonds? We know that for years the north of Angola has been raped by unscrupulous people mining diamonds and transferring them through Brussels or elsewhere as diamonds from somewhere else.

§ Baroness Amos
My Lords, the compact and the current discussions cover the oil, gas and mining industries. In that sense, diamonds would be covered. With respect to the specific question asked by my noble friend about Angola, he will recall that BP tried to encourage greater transparency in its business with Angola some time ago. It was rapped over the knuckles by the Angolan Government for doing that because it was breaking a local contract.
571 The situation in Angola has changed since then with the war having ended. Indeed, Angola attended our seminar in February. Therefore, I am hopeful that Angola will be one of the countries that wants to take part in this initiative in a fuller way.

§ Lord Avebury
My Lords, we discussed this in the debate on Angola in December when the Minister told your Lordships that she had already raised the initiative with not only G8 but also with NePAD. Is it possible that at the summit in Evian there will be not only an endorsement from the G8 but that it will be presented with a draft statement on best practice for transparency and disclosure of payments, involving extractive companies, contractors and host governments? Will the noble Baroness consider extending her remit to cover the international financial institutions, because if they were to sign up to the initiative it would give it an enormous boost?

§ Baroness Amos
My Lords, first, I should like to say to the noble Lord, Lord Avebury, that the international financial institutions are involved. It is a multi-stakeholder initiative and part of the criticism of the initiative from the NGOs is that we have gone for a voluntary rather than a mandatory compact. But the reason that we have gone for a voluntary compact at this stage is so that we can keep all those stakeholders on board. We have not ruled out the possibility of going down the mandatory route at a later stage.
With respect to whether we can go further at the G8 meeting on endorsement, it is partly a matter of timing. It is important to get endorsement from the G8. The further meeting of the multi-stakeholder group will happen after the G8 meeting. It is at that point that we should like to see agreement to the principles, agreement to the action that would then follow and a number of countries coming forward to pilot the initiative.

§ Baroness Greengross
My Lords, which of the developing countries and the industrialised nations is supporting this initiative?

§ Baroness Amos
My Lords, I have an extensive list of those countries which attended our workshop in February and I shall be happy to send it to the noble Baroness. I shall list a few examples: the governments of Angola, Australia, Azerbaijan, Belgium, Botswana, France, Germany, Netherlands, Russia, ourselves and Venezuela were represented, to name but a few. Companies represented included AngloAmerican, the BG Group, Chevron Texaco, Marathon Oil and Rio Tinto. A range of NGOs attended, as well as representatives from international financial institutions. NePAD and UN representatives also attended.

§ Lord Lea of Crondall
My Lords, would it be fair to say that the buzzwords for the Evian summit are "mutual accountability" between north and south? Can it be presented that we have taken forward initiatives on accountability, as have African governments—for example, in the case of NePAD, which was just mentioned? Does it follow that this 572 could form part of the menu for strengthening and deepening the NePAD concept between African countries?

§ Baroness Amos
My Lords, the G8 Africa Action Plan will be one of the topics to be discussed at the G8 meeting, and the issue of mutual accountability is at the core of that. Considering the Evian summit overall, responsible economy rather mutual accountability will be the term that the French would prefer to use. However, as regards the Africa Action Plan and the New Partnership for Africa's Development, I agree entirely with my noble friend that those are good examples of us working together.