Transparency in the Mining Sector Taxes and Value Distribution

Transcription

1 Transparency in the Mining Sectr Taxes and Value Distributin A presentatin by Edward Bickham 17 April 2014 Senir Adviser, Gld fr Develpment, Wrld Gld Cuncil UKSIF and Sustainalytics Seminar Edinburgh

2 Transparency in the Mining Sectr EITI and Publish What Yu Pay Ddd-Frank and Hme Cuntry Mandatry Disclsure Vluntary disclsure initiatives Pressure fr disclsure has been driven by Resurce curse thery Cmbating crruptin and embezzlement Resurce natinalism Suggestins f pr deals and tax avidance/evasin Industry desire t explain its ecnmic cntributin Wrld Gld Cuncil Member Relatins Strategy & Implementatin Jan

3 Extractive Industries Transparency Initiative Cncept launched by British Prime Minister in 2002 Gvernment-led; multi-stakehlder gvernance Initial fcus n natinal-level cmparisns between cmpany payment and gvernment receipts Meeting prcedural requirements leads t validatin/cmpliance Significant enhancement f infrmatin availability and trust Questins abut impact n gvernance and develpment utcmes Endrsed by UN, Wrld Bank, G8, G20 etc 44 implementing cuntries 26 cmpliant 40+ supprting mining cmpanies Over $1trillin in revenues cvered by reprts Wrld Gld Cuncil Member Relatins Strategy & Implementatin Jan

4 Mandatry Hme Cuntry Reprting Fcus n crprate accuntability and internatinal tax cmparisns Ddd-Frank s.1504 prject-by-prject reprting awaiting implementing regulatins EU Transparency Directive Canadian legislatin in cnsultatin phase But EITI ffers mre Cuntry-wned prcesses and lcal accuntability In-cuntry cmprehensive cverage Fcus n what is dne with revenues Ability t fllw-up n discrepancies Empwerment f parliamentarians and natinal institutins Wrld Gld Cuncil Member Relatins Strategy & Implementatin Jan

5 Challenges fr EITI New Standard has brader cverage f issues: SOE-Gvernment transactins Gives mre scpe t adapt t address natinal pririties Strnger fcus n sub-natinal transfers Disclsure f license wnership and pen cadastres Infrastructure fr minerals barter deals Encuragement f cntract transparency and disclsure f beneficial wnership Encuragement f greater scrutiny f budgeting and expenditures Flexibility v Inclusin Mre fcus n impact and utcmes Influx f OECD implementing cuntries Impact n relatinships frm falling metal prices Wrld Gld Cuncil Member Relatins Strategy & Implementatin Jan

6 What is the respnsible gld mining value distributin reprt? An innvative reprt that quantifies the ecnmic cntributin made by respnsible gld mining cmpanies. It prvides an analysis f hw aggregated value is distributed as between stakehlder grups including emplyees, suppliers, gvernments and investrs Why was it develped? Mining can make a significant impact t ecnmic grwth and develpment. In many cuntries it is a key driver f GDP, tax revenues, freign exchange and emplyment. There is an intense debate abut whether the benefits f mining are fairly distributed. Fr cuntries t benefit frm their mineral reserves, a number f stakehlders need t be invlved, including gvernment, cmmunities, cmpanies and the investrs wh fund the cmpanies. There is ften the perceptin that ne set f stakehlders benefit t the disadvantage f thers. The reprt aims t infrm discussin f hw respnsible gld mining can supprt sci-ecnmic develpment. Wrld Gld Cuncil Respnsible gld mining and value distributin 3 February

7 Methdlgy Each participating Wrld Gld Cuncil member cmpany was asked t prvide infrmatin n payments by cuntry. Cmpanies prvided data frm bth prducing peratins and nn-gld prducing peratins The Wrld Gld Cuncil cnslidated the data n a cuntry-by-cuntry basis. Data was als cnslidated t prvide glbal infrmatin n the amunt f mney that stays in the cuntry where the peratin is lcated and the amunt f mney that is paid t businesses r prviders f capital utside the cuntry. What d we mean by Respnsible Gld Mining? Respnsible gld mining is mining which takes place in cmpliance with applicable laws which bserves high standards f safety and health prtectin and f envirnmental stewardship. Respnsible gld mining is respectful f lcal cmmunities and their cultures and f their human rights; manages its impacts respnsibly and which prvides acceptable and realistic benefits fr all its stakehlders. Wrld Gld Cuncil Respnsible gld mining and value distributin 3 February

8 Key facts and figures , $55bn $35bn $8.4bn $3.4bn 80% 7% 85% participating cmpanies number f emplyees and cntractrs Number f perating gld mines Gld tnnage prduced in 2012 Gld tnnage prduced in 2012 in nn-oecd cuntries (58% f ttal) Ttal disbursements in 2012 Ttal payments t businesses Ttal payments t gvernments Payments t prviders f capital % f expenditure incurred in-cuntry Increase in gld tnnage frm 2009 t 2012 Increase in ttal expenditure frm 2009 t 2012 Wrld Gld Cuncil Respnsible gld mining and value distributin 3 February

9 Glbal value creatin and distributin Wrld Gld Cuncil Respnsible gld mining and value distributin 3 February

10 Glbal Highlights Wrld Gld Cuncil Respnsible gld mining and value distributin 3 February

11 Cnsideratins Respnsible gld mining can cntribute t sustainable scial and ecnmic develpment but expectatins need t be reasnable. The appraches taken must reflect natinal cntexts. Cllabrative effrts with gvernments, cmmunities and develpment agencies are needed t prduce sustained imprvements in standards f living, reduce pverty and imprve access t services and pprtunities. Cllabrative effrts shuld be guided by fundamental principles, including treating all individuals with respect, cmmunicating transparently and wrking t create sustained value fr all stakehlders. Gld mining cntributes t grwth and develpment thrugh jbs, skills training and capacity building, supply chain pprtunities, scial investment and infrastructure Mining is a lng-term business, where mining cmpanies take n significant risk, thrugh the cycle, n behalf f their investrs. Typically frm initial explratin t the start f prductin will invlve years f upfrnt investment. Of the $44.7bn paid ut in cuntry, $39.2bn (88%) was assciated with prducing peratins and $5.4bn (12%) was assciated with nnprducing peratins, which are incurring csts but n incme. We hpe that by prviding further insight f the ecnmic impact f gld mining and clarifying the realities f the mining life-cycle, we can advance the dialgue arund gld mining s rle in develpment. Wrld Gld Cuncil Respnsible gld mining and value distributin 3 February

12 Cnclusins Simultaneus alienatin f hme cuntry gvernments and investrs Need t imprve understanding f distributin f benefits based n transparency Crrsive impact f brad-brush allegatin f massive illicit flws frm Africa Imprtance f building understanding f all facets f mining s ptential ecnmic cntributin Crucial imprtance f appreciatin f impact f cmmdity cycle and mine lifecycle Extractive sectr is leading the way in cming t terms with transparency Wrld Gld Cuncil Member Relatins Strategy & Implementatin Jan

13 T view a cpy f the reprt, please visit: Wrld Gld Cuncil 10 Old Bailey, Lndn EC4M 7NG United Kingdm T F W