Clifford Chance

Disclosure requirements for natural resource companies: baring all in Europe

16 July 2012

New rules have been proposed in Europe for disclosure of payments to governments by natural resources undertakings, both listed and unlisted. If you're negotiating concession agreements today, it's time to start preparing.  

 

Summary

The European Commission has proposed new disclosure rules requiring large natural resources groups and companies based in Europe to disclose payments to governments anywhere in the world. The rules are similar to – but go further than - measures proposed under the US Dodd-Frank Act.

When first announced in spring 2011 the rules were expected to be on a country-by-country approach, but by the time the proposals finally came out, the Commission had moved to project-by-project reporting. This created a storm between NGOs and natural resources companies in a bid to influence the outcome of the European Union's (EU's) lengthy legislative process. Based on the latest developments as of mid-June 2012, it looks like a country-by-country approach has won the day. However the legislative journey is not over yet.

Whatever the outcome, European companies need to get ready: more reporting is on its way. Any European natural resources company negotiating a licence or concession with a government today needs to ensure it will be able to comply with forthcoming EU disclosure requirements without breaching its licence or concession.
 

 

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