British energy and mining firms will from January 1 2015 have to disclose all payments they make to governments in countries they operate in as the UK government increasse its noose on corruption especially in the natural resources sector.
The companies under the new rule will have 11 months to report to the companies’ house with the business ministry terming this move as likely to increase benefits to populations in places they operate in mostly in developing countries. The UK is determined to lead by example, which is why we have introduced reporting requirements on UK-based extractives companies early. Oil, gas and mining can, if well managed, deliver precious economic benefits to the populations of developing countries. Too often, though, the assets from resource-rich countries are not benefiting local people or the local economy,” Reuters quotes Business Minister Jo Swinson said in a statement.
The new rule that was announced on Friday follows consultations with industry stakeholders and members of the public.
Although the move has received backing from many who say this will increase transparency there is however concerns from companies that this could lead to increased expenses.
Reuters while citing oil and mining majors including BHP Billiton, Chevron and ExxonMobil noted concerns that many companies may decrease the attractiveness to list in Britain with costs associated with filing estimated by BP at about $6.5 million to deliver the first filing and $2.5 million a year thereafter.
The Association of British Independent Oil Exploration Companies (BRINDEX) has said the new rules will affect smaller companies more than the giants terming it as an unnecessary administrative burden.