Starting in 2012, the PDAC has been actively trying to promote and advocate for greater transparency in the mineral exploration and development sector. Below are some of the highlights and developments, in chronological order.
Extractive Sector Transparency Measures Act comes into force (June 2015)
On June 1, 2015 the Federal Government brought into force the Extractive Sector Transparency Measures Act (ESTMA). All extractive companies engaged in the exploration or extraction of oil, gas or minerals are required to annually report certain payments (e.g. taxes, royalties, fees, and production entitlements) of $100,000 or more that are made to all levels of government in Canada and abroad. A reporting entity will need to submit a report no later than 150 days after the end of its financial year, disclosing the payments it has made during that year.
The PDAC welcomes the announcement (press release and article in PDAC's Core magazine) after several years of promoting the need for Canada to adopt such a standard since 2012 when we helped form the Resource Revenue Transparency Working Group (RRTWG).
Implementation tools, including guidance and more information on the form and manner of reporting, are under development and will be communicated publicly to support compliance with the Act. The PDAC has been participating on a working group established by Natural Resources Canada to help develop these tools, with the support of representatives from two exploration companies: Roxgold and Goldeye. Included in the ESTMA, deferred for two years, is the requirement that after June 1, 2017, companies report payments to Aboriginal groups in Canada.
PDAC Representatives on NRCan’s Working Group:
Nadim Kara, Senior Program Director, represents the Association on the NRCan working group with the support of two junior company representatives:
Goldeye Explorations Limited
Robin Luke Webster is President of Goldeye Explorations Limited, a company which is engaged in mineral exploration activities at its flagship Weebigee Project, near Sandy Lake, in Northwestern Ontario.
Since 2012, he has managed the company's community relations program and led its highly intensive and hands-on consultation efforts with Sandy Lake First Nation which resulted in the signing of a comprehensive Exploration Agreement in 2013.
Robin grew up in a family with deep industry roots and has worked as a field assistant and operator on geophysical surveys throughout Ontario. Robin studied economics and politics at Trent University, graduating with a BA (Hons). Robin also attended the Arabic Language Institute at the American University in Cairo.
Roxgold Inc.
Mr. Pullinger has over 9 years of experience working in the resources sector. Most recently, he was a research analyst at Toll Cross Securities Inc. Mr. Pullinger's experience ranges from underground mining in narrow vein deposits in northern Canada through to exploration primarily on shear zone hosted gold deposits in China and Ghana. Before Joining Toll Cross he worked as a Senior Project Geologist with Pelangio Exploration where he worked to advance Pelangio's projects in Ghana at Obuasi and Tepa culminating with discoveries at Pelangio's Manfo Project South of Ahafo.
Quebec commits to Resource Revenue Transparency (June 2014)
On June 4, 2014, the newly appointed Québec government tabled its 2014-2015 Budget. It was announced that the Québec government will participate in the federal government's initiative on mandatory reporting standards for extractive companies. The Ministère des Finances and the Ministère de l’Énergie et des Ressources naturelles will work with the Autorité des marchés financiers to implement this initiative to facilitate public access to information in the mining sector. In June of 2013, Prime Minister Stephen Harper announced that mining, oil and gas companies would publish annual reports of all payments of $100,000 or more that are made to the government. At the moment Canada is on track to pass the legislation by April 1, 2015, in which case it would be implemented by June 1, 2015. Québec marks the first province to publicly support the federal government.
The PDAC released recommendations on mandatory reporting of payments in January 2014 as part of the Resource Revenue Transparency Working Group and continues to advocate for their implementation. To view the complete recommendations, please click here.
Tabling of Extractive Sector Transparency Measures Act (October 2014)
On October 23, 2014 the Government of Canada tabled a new act to establish mandatory reporting requirements for payments made to governments by Canadian extractive sector companies. Click here to read the Act (Division 28).
The Government of Canada has invited several representatives of the exploration, mining, and oil and gas sectors to provide input in to the development of a guidance document that will accompany the reporting requirements; the PDAC looks forward to being part of this on-going process.
Resource Revenue Transparency Working Group (January 2014)
Canadian exploration and mining associations, in collaboration with civil society organizations, released recommendations for the development of a payment transparency standard for all publicly-traded mining companies in Canada on January 16, 2014.
The Resource Revenue Transparency Working Group’s recommendations provide Canada’s federal and provincial governments, alongside provincial securities commissions, with a blueprint for a payment reporting framework. This framework will better serve the needs of the data’s end-users, such as citizens, governments and investors, but also those of the reporting companies.
Government implementation of these recommendations will provide citizens around the world with valuable information about payments from companies to governments in countries that produce minerals. Increased transparency will allow citizens and media to hold their governments to account for the revenues generated from mining activities and help to ensure that these revenues contribute to sustainable development and poverty reduction. For example, the Africa Progress Panel suggests that Africa is home to 30 percent of the world’s mineral reserves, yet resource-rich African states still lag in almost all development indicators. Enhanced payment transparency is critical to ensuring that governments mobilize natural resource revenues to fight poverty and promote development.
Full text of the recommendations can be found here.
Government of Canada Consultation (2013-2014)
In June 2013, Prime Minister Harper acknowledged the importance of transparency in the extractive sector and announced that the Government of Canada will be developing mandatory reporting requirements for Canadian extractive sector companies within two years. The PDAC and its Working Group partners since played an on-going role in the Government of Canada's consultations with its provincial and territorial counterparts, as well as with industry and civil society organizations on how to establish an effective reporting regime.
In May 2014, Natural Resources Canada released a consultation paper on establishing mandatory reporting standards for the extractive sector (available here). In response, the PDAC made two submissions. The first is a joint submission with the members of the Resource Revenue Transparency Working Group, which builds on the framework released by the group in January 2014. The second submission specifically addresses the Government’s proposal to require disclosure of payments made to Aboriginal entities. This submission, made jointly with the Mining Association of Canada, raises a number of concerns and issues which the PDAC is encouraging the Government to take additional time to consider before integrating in to disclosure requirements.
Click here to open the RRTWG Submission to the government of Canada consultation on mandatory reporting.
Click here to open the PDAC - MAC Submission to the Government of Canada Consultation on Mandatory Reporting.
Resource Revenue Transparency (September 2012)
On September 7, 2012, Publish What You Pay Canada, the Revenue Watch Institute, the Mining Association of Canada (MAC) and the Prospectors & Developers Association of Canada (PDAC), announced the official launch of the Extractive Resource Revenue Transparency Working Group (“Working Group”). The Working Group was created in order to collaboratively develop a framework for the mandatory disclosure of payments made to governments by Canadian mining companies, both within Canada and abroad. The goal of the framework is to provide citizens in resource‐rich countries with the tools they need to hold governments accountable for natural resource revenues and determine whether their governments collected what was owed, while simultaneously helping companies communicate their contributions to domestic economies and aiding investor analysis.
The Working Group was created following international momentum to improve the transparency of extractive sector payments to governments. In the United States, for example, new securities rules for publicly listed oil, gas and mining companies recently enacted under section 1504 of the 2010 Dodd‐Frank Act will require covered companies to report their payments to governments on a country‐by‐country and project‐by‐project basis. The European Union is also in the process of implementing similar disclosure requirements through the EU Transparency and Accounting Directives, expected to be finalized in June 2013. Regulations in both the US and EU will complement the existing Extractive Industries Transparency Initiative (EITI), a voluntary regime now adopted by more than 35 resource‐rich countries.
Throughout the creation of the framework, members of the Working Group closely examined emerging regulations and standards on the disclosure of payments to governments, including those in the US and EU, as well as the EITI, to ensure alignment while also bearing in mind the unique nature of the Canadian mining industry and its current disclosure requirements. Members of the Working Group are in agreement that alignment across various jurisdictions is necessary, and will be of benefit to governments, industry actors, investors and civil society alike. The framework’s recommendations have been developed by the four members of the Working Group, and are being released at this stage as a complete draft framework aimed at soliciting comments from interested stakeholders.
The recommendations are the result of 10 months of collaborative research, dialogue, outreach and negotiation – conducted through extensive consultation with extractive sector companies, investors, regulators, other government officials, academics, accountants, lawyers, and civil society groups across Canada and internationally. Once the final framework is agreed to by all four members of the Working Group later this year, each organization is committed to engaging with a variety of stakeholders at the federal and provincial levels, in order to promote the implementation of the recommendations set forth in the document. The Working Group welcomed the statement made by Canadian Prime Minister Stephen Harper regarding Canada’s commitment to implement mandatory disclosure requirements, and looks forward to inputting into this process.
PDAC News Release Resource Revenue Transparency June 12, 2013