Oil and gas companies have improved the transparency of how they report revenues and information about anti-corruption programs but should take bolder actions to stop corruption, according to a new report released Monday by Transparency International (TI) and Revenue Watch Institute (RWI).
“It is good news that transparency is improving, but too few companies publish what they pay governments in each country where they operate. Two thirds of the world’s poor live in resource rich countries. They have a right to know how much money their governments get from companies to exploit these resources,” said Huguette Labelle, Chair of TI.
The 2011 Report on Oil and Gas Companies, which is based on research conducted in 2010 and is an expanded version of a report published in 2008, rates 44 companies on the public availability of information on their anti-corruption programs and how they report their financial results in all the countries where they operate.
The companies evaluated represent 60% of global oil and gas production.
By disclosing anti-corruption measures and key organisational and financial data, especially on a country-by-country level, companies demonstrate their commitment to stop the misappropriation of revenues. In particular, detailed publication of fiscal payments allows citizens to hold governments to account.
“It’s striking that relatively few companies disclose on a country-by-country basis the payments they made to governments, even as civil society and a growing number of legislators and regulators recognise the importance of that information,” said Karin Lissakers, Director of RWI. “It’s essential data for investors, resource-rich societies and governments.”
The findings of the new report show improvements from 2008 in so far that in 2011 only eight companies failed to score any points for reporting on anti-corruption programmes. In 2008 21 companies out of 42 scored zero in this category; in the 2011 report 24 out of 44 companies reviewed their data. In 2008 only a handful of the companies surveyed agreed to review and comment on the data.
This increase in company involvement may reflect a growing awareness by companies that they have responsibility to help stop corruption and that investors are looking for ways to measure sustainable reporting.
To push for greater transparency, the report recommends that investors include corporate transparency (or lack of it) in their analysis and valuation models.
Some key findings of the 2011 report are that most companies report some information about their anti-corruption programmes, an advance over 2008; regulatory frameworks improve transparency. Publicly listed companies score better in all categories than non-listed companies; International oil companies report more in all categories than national oil companies and reporting on a country-by-country basis is the weakest area, where the average company score is just 16%.