Announcing the agreements on Saturday, UK Prime Minister David Cameron said the aim was to ensure poor countries received the full benefit of their natural resources so they could fund their own development and fight poverty. They were finalised during an event on trade, tax and transparency held in London in the lead-up to the G8 Leaders’ summit, which begins in Northern Ireland today.
While many developing countries have vast extractive resources like oil, gas and minerals, they are often sold at below market prices, or the money made is misused or poorly invested.
Under the transparency agreement, the G8 nations will partner with eight developing countries to help them improve the information available on the sale of extractives. This includes encouraging companies and countries to adopt the Extractive Industry Transparency Initiative, where governments disclose what they are paid by companies for extractives and companies disclose what they pay for those resources. Currently, 23 countries worldwide comply with this.
The deal will also strengthen communication between governments, companies and civil society so that new information on extractives can be properly used to hold governments to account. Countries will also be encouraged to introduce stronger legal frameworks to regulate their extractives sector.
Under the second agreement, seven partnerships will help developing countries to implement globally agreed guidelines on governance and safeguard individuals' and companies' rightful claims to land to improve the transparency and accountability of land deals.
These will help local authorities to formally register and protect rights to land. They will also support countries to collect better data on land transactions and to attract economically beneficial investment.
UK International Development Secretary Justine Greening said: ‘Lack of transparency is preventing developing countries from benefiting from their valuable resources. When they do not know how much their resources are worth, people and governments have no way of knowing if they are getting a good deal for them.
‘These partnerships will help developing countries make the most of their valuable resources, attracting the investment and income needed to drive economic growth, fight poverty and, eventually, end their need for aid.’
The partnerships for mining transparency involve: Burkina Faso (France); Colombia (European Union); Ghana (UK); Guinea (US); Mongolia (Germany); Burma (US); Peru (Canada); Tanzania (Canada). Private sector and civil society backing the partnerships include Rio Tinto in Peru and Mongolia and British Gas in Tanzania.
Those co-operating on land rights include: Tanzania (UK); Nigeria (UK); Senegal (France); Burkina Faso (US); South Sudan (EU); Namibia (Germany); and Niger (EU).
Saturday’s event also saw the UK’s overseas territories agree to take action to tackle global tax evasion by signing up to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, held by the Organisation for Economic Co-operation and Development.
In a statement, Anguilla, Bermuda, British Virgin Islands, Gibraltar, Montserrat and Turks & Caicos Islands also confirmed they had agreed to play an active part in the new pilot initiative of multilateral automatic tax information exchange launched by the UK, France, Germany, Italy and Spain and announced by UK Chancellor George Osborne last month.
The countries said: ‘It is our collective view that as we free up the world economy we must make sure openness delivers benefits for rich economies and developing countries alike and that we maintain confidence in the fairness and effectiveness of our tax systems and in the operation of global markets. Tackling tax evasion and fraud is a global responsibility in which we will continue to play our full part.'
