Top World Bank Official Supports More Disclosure of Oil Revenue Payments

17 October 2002

Top World Bank Official Supports More Disclosure of Oil Revenue Payments. Oil, gas and mineral companies should fully disclose their payments to governments of developing nations, the head of the World Bank’s private sector lending arm said recently, adding another voice to a steadily growing campaign for such disclosures. More …

Woicke Statement Welcomed. International NGOs welcomed the World Bank’s call for greater transparency. Simon Taylor of the London-based Global Witness, an NGO that has examined the links between the exploitation of natural resources and human rights abuses, said Woicke made "a very significant and useful comment on this general principle." More …

The World Bank/Angola Connection. The World Bank has recently shown interest in the fate of oil revenues in Angola and has gone to the extent of underwriting a major accounting effort. But the Bank isn’t releasing the results. More …

Top World Bank Official Supports More Disclosure of Oil Revenue Payments

Oil, gas and mineral companies should fully disclose their payments to governments of developing nations, the head of the World Bank’s private sector lending arm said recently, adding another voice to a steadily growing campaign for such disclosures.

Peter Woicke, executive vice president of the International Finance Corporation, stated, ‘We would come a long way if all-and I emphasize all-natural resource companies would make their transfers of royalties, fee payments and other revenues to host countries fully transparent.’ He spoke Sept. 30 at an ‘IFC Client Luncheon’ held in Washington, D.C. during the IMF-World Bank annual meeting.

In making his case, Woicke predicted that such disclosures ‘in turn would push governments to invest more wisely.’

‘Hiding behind confidentiality agreements does not help anybody,’ he continued, ‘and those with the most to gain financially from these projects, the poor people, are too often affected the least.’

Such disclosures, however, will not be made a condition of IFC lending. An IFC spokeswoman said, ‘These are all just suggestions, nothing has been done so far."

The Woicke speech is available on the Web here.


Woicke Statement Welcomed

International NGOs welcomed the World Bank’s call for greater transparency. Simon Taylor of the London-based Global Witness, an NGO that has examined the links between the exploitation of natural resources and human rights abuses, said Woicke made "a very significant and useful comment on this general principle." Global Witness is part of more than 60 NGOs worldwide that make up the Publish What You Pay Coalition, formed earlier this year to campaign for greater transparency on payments for oil and other natural resources.

Taylor is particularly encouraged by behind-the-scenes consultations on information disclosure currently taking place between the government of the United Kingdom, NGOs and several major oil companied he declined to name.

British Prime Minister Tony Blair himself endorsed more openness in a speech at the Johannesberg environmental summit this summer. "We want to work with developing countries to ensure that revenues from natural resources are used effectively to reduce poverty," he said. "So the UK is taking a leading role in bringing together countries, businesses, development agencies and NGOS to tackle the current lack of information available, and ensure that all payments by companies are published openly. It will only work if all agree to go forward, together. We want others to join us. We have already received commitments from a wide range of partners who want to work with us to devise a workable scheme." Click here for the full text of Blair’s speech.

Overall, in Taylor’s assessment, "The political indicators of a will to move forward are way ahead of where they were six months ago."

The proposals include encouraging countries to make mandatory disclosures on revenue payments part of routine corporate disclosure requirements. Some companies, however, prefer voluntary action. Others are open to disclosure but fear going it alone; they also want protection from sanctions from governments, such as that in Angola, that prefer to keep revenue payments secret.

While exact figures are unavailable, Taylor says that in Angola, revenue payments of as much as $1 billion a year for the last five years are unaccounted for. He contrasts this with reports that the Angolan government is willing to spend only $60 million for current efforts to alleviate the current hunger crisis there, describing the disparity between what the government earns and what it is willing to spend on its suffering people as "hideous."


The World Bank/Angola Connection

The World Bank has recently shown interest in the fate of oil revenues in Angola and has gone to the extent of underwriting a major accounting effort. But the Bank isn’t releasing the results.

The $2-million oil sector "diagnostic" study being conducted by KPMG was commissioned, under Bank pressure, by the Finance Ministry in Angola. It is being funded 30 percent by the Bank. The Bank and the IMF will receive copies when it is completed. Several interim reports were contemplated. The Angolan government has promised to make some of the results public.

However, under Bank policies, the results of the study are officially the property of the Angolan government and do not fall under the Bank’s disclosure policy, according to Bank officials. Letters to the Bank requesting the study are not returned, consistent with the lack of a Bank policy requiring that requests for information be answered or that reasons for nondisclosure be explained. Also, one Bank official told freedominfo.org, the study has been delayed and is not complete.

The Bank and the Fund are making some efforts in ongoing negotiations with Angola to make the release of oil revenue data a condition for loans. But those long-running discussions have yet to be concluded.

By Toby McIntosh

 

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ABOUT IFTI WATCH

In this column, Washington, D.C.-based journalist Toby J. McIntosh reports on the latest developments in information disclosure in International Financial and Trade Institutions (IFTI).
Contact: freeinfo@gwu.edu or
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