SYDNEY – Papua New Guinea’s “weak” score of 43/100 in a survey released today of the governance of natural resources reflects critical gaps in government oversight across most aspects of its resource sector.
Revenue Watch’s Resource Governance Index measures the quality of governance in the oil, gas and mining sector of 58 countries worldwide. Together these nations produce 85 percent of the world’s oil, 90 percent of diamonds and 80 percent of copper, generating trillions of dollars annually. Each country, from Norway to Myanmar, is ranked according to four criteria:

• Institutional and Legal Setting: Laws and systems that facilitate open, accountable government.

• Reporting Practices: The information governments actually share with the public Safeguards and Quality Controls: The checks and balances in place to follow the money.

• Enabling Environment: The broader policies and practices that support democracy, transparency, accountability and rule of law.

The Revenue Watch Index ranked PNG 39th out of 58 countries surveyed. The PNG survey results cite deficiencies in government revenue collection mechanisms, parliamentary oversight, public access to information, corruption control and the rule of law.

“The Revenue Watch Institute report on PNG endorses our view that sound political institutions and strong governance are essential to prevent PNG’s considerable resource wealth from being squandered and to ensure the benefits are well spent and fairly distributed,” said Carmelan Polce, Executive Director of Jubilee Australia.

Jubilee Australia is the publisher of Pipe Dreams, a detailed investigation into the $19b PNG Liquified Natural Gas project, the largest investment project in PNG’s history, which was controversially backed by Australia’s Export Finance and Insurance Corporation.

The results also highlight civil society concerns about Prime Minister Gillard’s intentions to start “a new chapter in bilateral relations” with PNG. Pipe Dreams makes the case that if the Project’s promises to deliver economic development and prosperity are not met and serious, resource project-related civil conflict again erupts in PNG then the Australian Government will share the burden of complicity.

Resource-rich countries have struggled with this great paradox for far too long. The opportunity for these nations to experience social and economic independence is there — the problem is that too often weak institutions, corruption and a lack of transparency and accountability obstruct the path to development.

“The Index research reveals a governance deficit in how transparent and accountable countries are with their natural resources,” said Daniel Kaufmann, president of Revenue Watch. “But by pointing to reforming states and to solutions, we reject the tired notion of the deterministic ‘resource curse’,” Kaufmann added.

“The Index analysis not only shows where we are now, but points out ways forward for countries, companies and global initiatives, and this matters because improved governance in natural resources is arguably the development challenge of this decade,” Kaufmann said.

The Index offers recommendations for both highly-ranked countries like Brazil and low-ranking countries like Afghanistan. From disclosing contracts to passing a freedom of information act to improving state-owned company oversight, there are many ways for governments of resource-rich countries to become more effective and accountable to their citizens.

“Political reform in PNG is the most important insurance against abuse and misuse of resource revenues,” said Ms. Polce. “Reform in PNG will involve the gradual integration of modern-state democratic institutions and is a long-term project, but the Index can help show the way.”

For more details on the Index data and the report, visit www.revenuewatch.org/rgi.

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Media Contact: Carmelan Polce Executive Director Jubilee Australia www.jubileeaustralia.org 02 8259 0817

0403 897 489

 

 

We still have a small window of opportunity to convince the Government to CHANGE THE LAW which allows trade secrecy. But we need your help.

We have been carefully studying the policies and practices and impacts of Australia’s export credit agency for many years. This work, along with that of other advocates, helped provoke the November 2011 establishment of a Productivity Commission Inquiry into Australia’s export credit arrangements. The final report, released May 2012, suggested widespread changes to the EFIC (Export Finance and Insurance Corporation) Act.

But in its response, the Government has tabled an amendment Bill before Federal Parliament which ignores key recommendations of the Commission, including those directed to improving transparency and accountability.

Despite the explicit recommendation of the Productivity Commission, and the recommendation of United Nations Independent Expert on Debt and Human Rights after his 2011 mission to Australia, and the views of academic experts around the country, the Government refuses to remove the special exemption provided to export credit deals under the Freedom of Information Act. In maintaining this secrecy provision, Australia lags behind the UK, US, Europe and elsewhere.

Last week we made a submission to the Senate Legislative Committee currently reviewing the Bill, restating our key recommendations which were supported by the Productivity Commission Inquiry findings:

Make EFIC subject to freedom of information legislation,

Require that the Government release a National Interest Statement for National Interest Account transactions, 

Ensure adequate assessment and disclosure of human rights impacts and environmental damage,

Remove its exemption from the operation of environmental legislation,

Disclose its intention to finance Australian based projects.

We have a short window to convince the Government to end the policy of trade secrecy. But we need your help.

write to the trade Minister

To submit an electronic letter through the website, use this link: http://www.aph.gov.au/Senators_and_Members/Contact_Senator_or_Member?MPID=83V

To post a letter, use this address: The Hon Dr Craig Emerson MP, Minister for Trade and Competitiveness, PO Box 6022, Parliament House, Canberra, ACT 2600.

Here's some suggested wording.

Dear The Hon Dr Emerson,

The Export Finance and Insurance Corporation (EFIC) is an organ of the Australian Government, spending taxpayer money in the fulfillment of its mandate of providing funding and insurance to Australian exporters. As such, I believe EFIC should be subject to the transparency and accountability mechanisms applicable to other statutory bodies.

Currently EFIC has a blanket exemption from Australia’s freedom of information laws. This means that the interests of client confidentiality are placed above public interest concerns. EFIC has a responsibility to inform the public adequately of the risks to the environment, people and communities posed by the projects it proposes to support and to manage them on behalf of the Government and taxpayers who are the ultimate bearers of these risks.

Freedom of Information laws are a cornerstone of our democracy. In this spirit, I ask that you please support the removal of EFIC’s statutory exclusion from the Freedom of Information Act 1982.

Yours sincerely,

(Signed....)

Thank you!

END TRADE SECRECY 19 April, 2013.

Jubilee Australia has made a submission this week to the Senate Foreign Affairs, Defense and Trade Legislative Committee, urging the Federal Government to ensure the key recommendations of the recent tax payer funded inquiry into export credit arrangements are adequately incorporated into legislation.

The work of Jubilee Australia and other advocates helped lead to the November 2011 establishment of a Productivity Commission Inquiry into Australia's export credit arrangements, the final report of which (released May 2012) suggested widespread changes to the EFIC (Export Finance and Insurance Corporation) Act.

In response, the Government has tabled an amendment Bill before parliament which ignores key recommendations of the Commission for reform of Australia's export credit agency's operation, including those recommendations directed to improving transparency and accountability.

EFIC is a federal government agency that funds international projects and deals to promote Australian exports. The decisions of the agency can have an enormous impact on poor communities overseas. As Jubilee's most recent research publication - "Pipe Dreams: The PNG LNG Project and the Future Hopes of a Nation" - detailed, EFIC has been a major financier of the Papua New Guinea Liquefied Natural Gas Project. Not only is this $19 billion project the largest development project in the history of the Pacific region, it has also completely transformed the PNG economy. EFIC has also supported other 'mega-projects' throughout its history. These projects can have significant social and environmental impacts, which need to be weighed up against their potential benefits.

Jubilee Australia has invested many years into carefully investigating EFIC's policies, practices and impacts on the projects it supports. In this most recent submission on Australia's export credit arrangements we reiterate the following recommendations, which were supported by the findings of the Productivity Commission Inquiry:

• make EFIC subject to freedom of information legislation,
• require that the Government release a National Interest Statement for National Interest Account transactions,
• ensure adequate assessment and disclosure of human rights impacts and environmental damage,
• remove its exemption from the operation of environmental legislation,
• disclose its intention to finance Australian based projects.

Read our full submission:

For further information or interview:

Jubilee Australia Executive Director

Ms Carmelan Polce - carmelan@jubileeaustralia.org

DODGY DEAL ALERT

MEDIA RELEASE 12 December 2012

Jubilee Australia today released Pipe Dreams, an in-depth report into the US$19 billion ExxonMobil-led LNG Project in Papua New Guinea, and its foreseeable impacts on the country’s precarious political institutions, economy and society.  The findings raise concerns that the Government, by investing taxpayer funds into the massive Project, has placed already vulnerable Papua New Guineans at even greater risk, in order to prop up the balance sheets of private Australian corporations.

ExxonMobil (until recently, the richest corporation in the world) and its joint venture partners which include ASX-listed Oil Search and Santos, began construction in the PNG’s Southern Highlands in 2010.

PNG LNG is a liquefied natural gas scheme backed by the largest project finance deal ever made, including an Australian export credit loan of US $350 million. It has been hailed as a catalyst for PNG’s economic transformation. But Jubilee Australia’s new research casts doubt over the overly positive predictions, suggesting that in some cases they may simply be ‘pipe dreams’:

“If this project is going to pay off for PNG’s broader economy, and if the vast government revenues are going to be preserved for the people’s long term future, a great many factors will need to go exactly right. In our assessment, the greatest risk-bearers in this Australian-backed ‘roll of the dice’ are among PNG’s most vulnerable,” said Luke Fletcher, Jubilee Australia Research Director, “while the greatest benefits from the project will accrue to the multinational corporations and the local political elites in PNG.”

The report highlights the warning signs from community leaders in the affected areas, that they will take disruptive action if they grow unhappy with the Project.

“Many community leaders have gone on record making public threats against the Project and its workers if they do not get what they want, and informants say that weapons are being smuggled into the region in preparation for violent conflict if expectations are not met,” said Mr Fletcher. “The project proponents and financiers, including the Australian Government, were warned about these possibilities many times, and yet they backed the project anyway” he said.

The report claims that the Australian Government will share the largest burden of complicity in any serious Project-related trouble which unfolds in PNG.

“The significance of Australia’s involvement in supporting the PNG LNG Project reaches far beyond its relative small share of the total debt package. Viewed as the ‘PNG specialist’, Australia’s involvement was something of a green light in PNG LNG securing financial backing of other international export credit agencies, including the US Ex-Im Bank, China ExIm Bank, as well as the commercial banks.”

Since the launch of its previous report Risky Business in December 2009, the same month the Rudd Government announced it would extend the largest ever export credit loan to support the LNG project, Jubilee Australia has been putting Australia’s Export Finance and Insurance Corporation (EFIC), and the financial support it gives to Australian mining, oil and gas companies, under the spotlight.

“Pipe Dreams provides the strongest evidence to date that all EFIC decisions on the publicly-funded National Interest Account should be subject to proper scrutiny,” said Mr Fletcher. “Jubilee Australia supports this and the other recommendations in the Productivity Commission’s Report into Australia’s Export Credit Arrangements.”

The release of the Government’s response to the recommendations for reform of EFIC made in the Productivity Commission Report, which was released in June this year, is expected by the end of the month.

-----------------

Media Contact:  Carmelan Polce
Phone:  0403 897 489
Email:  Carmelan@jubileeaustralia.org

Pipe Dreams: The PNG LNG Project and the Future Hopes of a Nation

Launched by Jubilee Australia on Wednesday 12 December, 2012.

More information and to download the report.

 

It wasn’t easy to reach this point, but incredibly this week we saw the Federal Parliament debate Jubilee Australia’s proposal for a new law to protect highly indebted poor countries from ending up the prey of profiteering private financial outfits known as vulture funds. 

Since 2011 Jubilee Australia has been stirring public sentiments with the story of a small New York based private equity firm that earned $32 million by suing the Democratic Republic of Congo in an Australian Court. Vulture funds search for debts owed by very poor countries which they can buy from the original lender at a discounted rate, only to sue the country for the full amount (plus interest and fees) in order to make a profit.

Thousands of Australians have sent Stop Debt Vulture postcards to their member of Parliament since the beginning of this year, such that when Jubilee’s staff arrived at Parliament House last week to have face-to-face discussions, we found the support of many MPs and Senators right across the political spectrum.

As a result, on Monday this week Independent Member Rob Oakeshott moved a motion in the House of Representatives, seconded by Labor MP Melissa Parke, calling upon the federal government to act - to close the legal loophole which currently allows vulture funds to unconscionably profiteer off the indebtedness of developing country’s in Australian courts (Link to the speeches).

We’re getting there! 

One significant step closer to having vulture fund legislation passed in Australia. This would not have happened without the action of so many of you. Congratulations!

What next?

Next is the Senate, where we hope our motion will be moved in the coming days, jointly sponsored by three Senators each representing the different parties. To find out what you can do help, visit the Stop Debt Vultures campaign website established and maintained by our remarkable volunteers, led by Phil Jones: TAKE ACTION 

Background information on Vulture Funds

There is something terribly wrong with the international financial system. While the Greek society suffers under drastic cuts to public spending, with rates of suicide, murder and HIV on the rise, the owners of a 'vulture fund' based in the Cayman Islands (a tax haven) are enjoying their approximately AUD 700 million in winnings, having bought Greek bonds at a fraction of their value when the country faced crisis, and subsequently made a killing by suing for repayment of the full amount. Read the May 17 Guardian article by Jubilee Australia's UK partner, Jubilee Debt Campaign called "Greece: here come the vulture funds".

How many gigantic multi-national companies can you name? No doubt, a few. They are part of our daily lives: doing business with the food we eat, clothes we wear, energy we use, mobile phone we buy, and much more. Yet despite the remarkable extent to which business has become globalised, the regulation of business activity on a global or multi-national level (as opposed to national laws governing domestic business) has not kept pace. And the result is what many people are calling a significant and costly 'governance gap'. 

What does this have to do with global poverty and injustice? Everything, when you consider the impact that unregulated business and financial activity can have on poor countries and communities.

John Langmore, Professor at the University of Melbourne and academic advisor to Jubilee Australia, made an address at a roundtable of the UN General Assembly in New York, 8 December 2011. In pointing to this 'governance gap' he said: "the Great Recession has illuminated the extent of the gaps, distortions, asymmetries and other failures in global economic institutions and policies, and the enormity of the costs with which they have been associated."  Read his full speech below.

GLOBAL ECONOMIC AND FINANCIAL GOVERNANCE
Address to Roundtable 1 of the UN General Assembly High-level Dialogue on Finance for Development New York, 8 December 2011, John Langmore

The remarkable growth in international economic integration has far outpaced the existing capacity for global economic governance. This became especially apparent during the Great Recession. The speed with which economic problems in one country spill over to others indicates the importance of strengthening international institutions to ensure they are capable of taking swift, effective corrective action.

The Great Recession was the most destructive economic catastrophe for developed countries for nearly eighty years. Yet the models underlying it were those that were the basis for the conditionality which developing countries borrowing from international financial institutions were required to accept. At the same time some countries which had maintained their own strategies and resisted the pressure from the neoliberal states and institutions to conform continued their growth paths.

Since the start of the eighties the developed neoliberal world has given much freer reign to the economically powerful to do as they wish. The philosophical justification has been provided by those who regard maximisation of individual income through improvements in competitive efficiency as the preferred economic goal. It is now clear that the hubris and sense of entitlement which this generates has established mechanisms for rapidly growing inequity, severe financial instability, ecological erosion and the entrenchment of a global underclass. Radical reform is essential.

The key features of a renewed economic paradigm would be of most value if they focused on equitable improvements in personal and national wellbeing. These are genuinely broad and more fully inclusive goals than simply seeking maximisation of the incomes and expecting the benefits to flow down to the rest.
Means to the ends of improving both equity and economic efficiency would involve restoring a better balance between the market and the state. Establishing strong regulatory frameworks is a priority. It is vital to acknowledge the necessity of carefully judged regulation in contributing to reducing the risks of economic and financial instability and abuse. In addition, recognition of the value of diversity in economic strategy would reduce the tendency towards hubris in the centres of capitalist power.

Stronger regulation of banking is essential. Paul Volker writes wisely in urging that though „regulatory responsibilities and enforcement authority (for instance, setting and enforcing capital standards for “nonbanks” such as hedge funds) will likely vary from country to country ... there can‟t be much doubt that success will require international consultation, exchanges of information, and in some areas coordinated action‟. Agreement on international accounting standards is vital. International review of the role and structure of credit rating agencies is also essential.

Volker also emphasises that: "the time has clearly come to harness money market mutual funds in a manner that recognizes both their structural importance in diverting funds from regulated banks and their destabilizing potential‟.

Further, he argues for concerted focus on the issue of the dominance of banks which are perceived as too large to fail." The risk of failure of “large, interconnected firms” must be reduced, whether by reducing their size, curtailing their interconnections, or limiting their activities‟. He rightly continues to emphasise the importance of treating retail and investment banking separately, and would prefer that those functions be conducted by separate companies.

A particularly clear example of an issue which could only be effectively addressed through international regulation is the tax evasion facilitated by banking secrecy. It has become commonplace to blame tax havens in developing countries for this practice but in practice there are also centres enabling international tax evasion within developed countries. Any country guaranteeing banking secrecy could be providing the context for tax evasion.

Tax competition undermines revenue collection in both developed and developing countries. While he was Managing Director of the IMF, Michel Camdessus said (in 1998) that: “estimates of the present scale of money laundering transactions are almost beyond imagination – 2 to 5 per cent of global GDP would probably be a consensus range”. (Baker, 2005, p. 162) Applied to global GDP of $58 trillion in 2009 this indicates international money laundering in the range of $1 to 3 trillion annually. Another example of culpable tax evasion is corporate transfer pricing.

The OECD argues that it should be allowed to continue to control this area of international policy and it has been undertaking useful work doing so. But the issues are global and the OECD has focused on the interests of its own member states rather than the interests of all countries. Demonstrably the current preoccupation with tax evasion through offshore tax havens without simultaneous attempts to tackle the more substantial examples of tax evasion within developed countries is both inequitable and inefficient.

What is required is the establishment of reciprocal international agreements on issues of tax secrecy, the sharing of information, and decisions which are enforceable by international courts. International rules are also necessary requiring multinational corporations to publish country-by-country reports that show the profits and taxes they have paid in each country in which they operate.

Establishing an international tax organisation would be the most effective step. An obvious way to do this would be to upgrade the UN Committee of Experts on International Cooperation on Tax Matters into an intergovernmental body. Such a body could have an elected governing council, representative of member states, and responsible for drawing up broad objectives and major issues of policy (with the help of a highly competent staff.) An agreement to strengthen international tax cooperation would be of value to every country, developing or developed, that is seeking to increase its revenue, to reduce tax evasion and to strengthen equity.

A significant innovation since the Great Recession has been the upgrading of the G20 to head of government representation. This certainly has the advantage of over the G8 of including major developing countries in membership. But the membership was selected by the US and Canada. Inviting other countries and multilateral bodies as observers eases the extent of exclusion but does little to increase accountability. The autocratically selected, static membership and the exclusion of most middle level and all smaller countries undermine the G20‟s usefulness and effectiveness. It lacks a legal basis, a formal secretariat, and a collective implementing capacity. The G20 made valuable decisions at its first couple of meetings at head of government level which substantially reduced the depth of the Great Recession, but significant doubts about its decisiveness and overall effectiveness are now growing. Although a positive step, the G20 does not adequately resolve the democratic deficit in global economic governance. The G20 lacks the legitimacy that is required for global consensus building.

The Global Governance Group (3G) has proposed several modest practical actions that could be taken quickly without significant alteration to current arrangements. These steps aim to consolidate linkages between the G20 and the UN and broaden the representational credentials of the G20. The 3G‟s suggestion that the G-20 undertake consultations as widely as possible with non G-20 members through the UN before and after the G-20 Summits is being implemented.

But comprehensive collaborative economic policies cannot be achieved by G20 members alone. This is why the Stiglitz Commission on Reform of the International Monetary and Financial System argued that: “it is absolutely essential to create better institutional arrangements for coordinating global economic policy”. They suggested the establishment of a Panel of Experts and a Global Economic Coordination Council. (UN, 2009, p. 137) “There is a need for global collective action to address not only ... issues of global „externalities‟ but also the provision of global public goods. Among the global public goods are the stability of the global economic system and fair trading rules. ... without coordination, countries do not have sufficient incentives to invest in global and regional public goods ... The same is true for common social objectives such as combating poverty. Among the most important of the global public goods is preservation of the environment.”(UN, 2009, p. 88)

The Commission‟s proposed Panel of Experts could be established quickly, using experts from all continents in order to pool the knowledge and research results of a large number of acknowledged experts, the way the Intergovernmental Panel on Climate Change has done. Membership would be by election through a constituency system designed to ensure that all continents and all major economies are represented. It would actively consult with the other institutions of global economic governance.

Another vital recommendation of the Stiglitz Commission was the need for reform of the global reserve system. Not only has the current system favoured the US but it has also worsened instability. If the dollar falls it reduces the value of reserves held in dollars by other countries. When exchange rates were floated in the seventies and eighties this reduced countries‟ capacity to achieve full employment. Some leaders, including those of China, have suggested that the best method of eliminating these problems would be to do as Keynes proposed and to create a supranational/international reserve currency. The Stiglitz Commission says that “this is an idea whose time has come”. One method would be to steadily increase the number of Special Drawing Rights issued by the IMF, for which the $250 billion which the G20 authorised is an important start. Many issues would have to be worked out and negotiated first, but the initial step would be to decide to start the discussions.

To conclude, the Great Recession has illuminated the extent of the gaps, distortions, asymmetries and other failures in global economic institutions and policies, and the enormity of the costs with which they have been associated. The imperative for major reform is therefore clear. The question is whether there are sufficient wise and influential countries to be advocates for addressing the challenges of establishing effective global economic governance.

(Find out more about Professor John Langmore and Jubilee Australia's other academic advisors)

We often hear and are led to believe that we are powerless to impact the system – how things are decided and the way things are done in our world.

But we are also in amazing and implausible times. The Arab Spring has shown us that sometimes right beats might. Occupy Wall Street protests are confronting the mightiest of the mighty with the simplest of messages:  the status quo is unfair and unacceptable; we’re not leaving til you fix it. Injustice and inequity are becoming downright unfashionable!  It’s a time that seems to have enormous potential.  

Debt cancellation for the poorest countries was at one time the preserve of radicals, dismissed by governments and international institutions alike. Only mass public pressure had the power to force debt cancellation onto the mainstream agenda and eventually into international policy.

The leaders of the nations comprising the G-20 have just concluded their gathering in Cannes, France for the annual meeting. There were two topics on the table for discussion that Jubilee has worked very hard, in concert with others, to bring from obscurity into the fore: 

•  Ending Tax Haven Secrecy 

Last week the G20 named 11 tax havens. While they continue to ignore that the biggest tax havens are in the G8 countries (especially London), this crucial issue is growing in profile and we are making significant progress on what seemed an impossible task. 

•  Financial Transactions Tax

Outrightly dismissed not so long ago as economically irresponsible and politically unfeasible, after last week's G20 meeting the FTT has no more opponents in the eurozone, and these supporters are joined by Brazil and Argentina, South Africa, the African Union, Ethiopia, and Ban Ki Moon, UN Secretary General. Whilst not yet supportive, President Obama agreed the financial sector must contribute more to the cost of the crisis. 

The times do genuinely seem to have enormous potential – let’s keep our leaders on their toes to make sure it’s not opportunity squandered.

Less-developed countries lose more money each year due to tax dodging by multinational companies than the total amount of international 'aid' given.  Taxation is a primary means of generating essential revenue.  For this reason the tax payments foreign corporations make to host governments are of paramount importance, especially to nations struggling to organise basic healthcare, education and social services. Without the capacity to generate domestic revenue, less-developed countries will continue to be dependent on foreign loans and investment, whilst foreign companies profit from such things as extracting the countries' natural resources.

Jubilee Australia is a member of End Tax Haven Secrecy, a global coalition involving 56 organisations in more than 20 countries, whose aim is to end tax haven secrecy and its deeply corrosive effects around the world.  The coalition is calling for changes in the way that companies are required to report their accounts, to ensure that multinational companies publish the taxes they pay and the profits they make in each country where they work. 

In its work to generate action to close down tax havens the End Tax Haven Secrecy campaign collected signatures from more than 40,000 people from around the world on a letter to French President Nicolas Sarkozy, chair of the Cannes G20 Leaders Summit.  The letter, delivered to President Sarkozy on 2 November, urged him to use the meeting to tackle the problem of tax haven secrecy.  

Getting this issue on the G20 meeting agenda was a substantial achievement. Adele Webb, executive director of Jubilee Australia said:

‘G20 countries have the power to force tax havens to stop keeping the secrets of people and companies who dodge tax, pay or receive bribes and launder money.

'Removing the secrecy that havens offer would make tax dodging much more difficult.  It would enable governments of poorer countries to determine just how much they are losing in tax revenues so they can take appropriate action.'

G20 countries, including Australia, have been called upon to act now to challenge the injustice of tax havens by agreeing on measures to stop tax haven secrecy.  

As a supporter of Jubilee Australia you may know that the Financial Transaction Tax (FTT), also known as the Robin Hood Tax, is a very small tax on institutional trades of financial assets such as currencies, stocks, bonds, derivatives and interest rate securities.  Estimates suggest it would raise billions of dollars annually for underfunded domestic and international needs whilst mitigating the harm of high frequency speculative trades generating chronic market instability.  It would reduce the profitability and, therefore, the enormous volume of low margin, high speed computer-generated trades that are fuelling Australian and global market volatility. 

As outlined in the Robin Hood Tax Australia Coalition’s submission to the Australian Government’s October Tax Forum in the last 18 months interest in the FTT has grow demonstrably, culminating in last month’s introduction by the European Parliament of FTT legislation to be implemented across  the European Union and discussion at the G20 Leader’s Summit of the implementation of a global FTT. 

Sovereign debt crises in Western Europe, urgency around the need for global climate change action, continuing demand for international aid and growing concern for economic inequity have perhaps precipitated the tipping point for FTT in the search for innovative forms of finance.  

Jubilee Australia joined our colleagues in the Robin Hood Tax Australia Coalition in great anticipation of what announcements about the FTT might emerge from the G20 Leaders Summit. 

Jubilee Australia joins with others in Australia's Publish What You Pay (PWYP) group to applaud the announcement that the Government will run a pilot of the Extractive Industries Transparency Initiative (EITI) - international best practice for mining, oil and gas operations.

Media Release: 27 October, 2011

Australia to trial mining, oil and gas transparency initiative

Publish What You Pay Australia has welcomed the Australian Government’s announcement at the Commonwealth Heads of Government Meeting that Australia will trial the Extractive Industries Transparency Initiative (EITI).  

The EITI requires governments to publish what they receive in payments from mining, oil and gas companies and for companies to publish what they pay governments. This process is overseen by a multi-stakeholder group comprising equal representation of government, industry and civil society.

Peter Colley from the CFMEU’s Mining and Energy Division said, “Today’s announcement is warmly welcomed as a first step in helping all Australians better understand how we are benefitting from the extraction of our finite natural resources.  This comes at a time when companies are making record profits and there is increasing community concern about how this wealth is shared. 

“Australian implementation of the EITI will improve trust and accountability in our mining, oil and gas sector”, added Mr Colley. 

Carmelan Polce from Jubilee Australia said, ‘The commitment by Australia to the EITI sends a strong signal to other governments and to all Australian extractive companies that we are serious about transparency and accountability in the mining, oil and gas sector.’

A pilot of the EITI is a good start but it is not enough. “We will be pushing for the Government to commit to the EITI permanently in order to cement its status as the global standard for transparency in the extractive industries”, added Ms Polce.   

Many resource-rich countries are also poor countries, characterised by corruption and conflict.  The EITI is one way of tackling these problems.  

Australia will join 35 other countries already implementing the EITI and will become the third developed country to commit to the initiative after the United States and Norway.  As part of Norway’s EITI process, the Norwegian Government also publishes tax concessions and subsidies given to companies allowing the net benefit from natural resource to be calculated. 

Francis Grey from Economists at Large said, ‘The Australian Government and mining companies involved in the EITI trial would be wise to follow Norway’s lead and provide a complete picture of revenue flows to and from the public purse by including payments from the Government to companies in a future EITI report.’ 

To learn more about the challenges for extraction of natural resources to be a positive experience for less-developed countries, see Export Credit and Mining.