OTTAWA – The Canadian mining industry is backing recommendations that publicly traded mining companies report project-related payments to foreign and domestic governments that can range from royalties and taxes to transportation fees.
The recommendation was included in a report Thursday by a group including the Mining Association of Canada and the Prospectors and Developers Association of Canada.
The report suggested that improved transparency could help citizens and communities hold their governments accountable, deter corruption, inform public debate and assist investors.
“Greater transparency surrounding the collection of resource revenues can help to address these issues and improve the development outcomes of resource extraction for billions of citizens in oil, gas and mineral producing countries,” said the report which proposed a framework for disclosure.
Mining companies have faced a number of challenges at home and abroad in recent years over just who benefits from projects under development.
The debate has raged over the New Prosperity project in British Columbia and the federal environmental review process for the proposed mine.
Meanwhile, Gabriel Resources was dealt a significant setback last year after legislators rejected a bill that would have allowed its Rosia Montana project in Romania to proceed.
Last summer, Canada adopted a G8 initiative that would require companies to disclose any payments they make to governments. However, the government is still working on implementation details.
The mining industry group said Thursday that its recommendations for implementation aim to bring Canada in line with standards in the United States and the European Union.
Canada is a world leader in the mining industry, home to companies like Barrick Gold (TSX:ABX), one of the world’s largest gold miners, while the Toronto Stock Exchange is a key venue for mining companies around the world looking to raise cash.
The report recommended that large mining companies disclose payments over $100,000 and small firms disclose payments of more than $10,000.
The requirement, the group said, will allow the public and investors to have a clear picture of payments made by companies to governments including taxes, royalties, bonuses, dividends, infrastructure payments and transportation and terminal operations fees.
The working group’s report recommended that disclosure be made to provincial securities regulators through harmonized rules across the country and that there be no exemptions under its proposed framework.
“Transparency of payments to governments will highlight the financial contributions and benefits that come from resource development,” said Ross Gallinger, executive director of the Prospectors & Developers Association of Canada.
In addition to the PDAC and the Mining Association, the group included Publish What You Pay-Canada and the Revenue Watch Institute.