March 30, 2012
The Global Movement for Budget Transparency, Accountability and Participation (BTAP) is an effort by a broad range of activists and organizations working on public finance and budget accountability issues from around the world to work with collaborative international level advocacy to advance the BTAP agenda. The organizations that have joined the Global Movement have embraced a cause whose principles are expressed in The Dar es Salaam Declaration on Budget Transparency, Accountability, and Participation signed on November 18, 2011. Currently, the Global BTAP has 86 active members. These are national and international civil society organizations which, as part of their core agendas, work on the promotion of transparent, accountable and participatory public budgets
We are writing to urge the SEC to swiftly adopt final rules for Section 1504 of the Dodd Frank Wall Street Reform and Consumer Protection Act. We consider it important that the final rules do not allow for exemptions from reporting for any country and that information be disclosed at the project level, where a project is considered to be equivalent to a lease, licence, concession or similar legal agreement.
Countries dependent on natural resource exports are often characterised by a high degree of corruption and poor development. The huge revenues earned from oil, mining and gas exports often fail to translate into proper spending and saving plans in national budgets and, through these, into broad-based and sustained improvements in development for the majority of citizens. Instead, much of the money remains off-budget and is used to reward patronage, cronyism and corruption.
The information published by extractive companies under Section 1504 would assist citizens and budget activists in following the money from extractive companies into national budgets and prevent its diversion or misappropriation. Our coalition and others will be able to use the information to cross-check information on revenue receipts reported by governments, enabling us to track the flow of revenues into national budgets. Exemptions proposed by some companies for reporting in particular countries, by their nature, would hamper this process and prevent citizens from assessing whether government reports of the management and spending of revenues fully account for all revenues received. Indeed, such exemptions are likely to be granted to worst performing countries in terms of budgetary transparency and development outcomes where such information is most needed.
Disclosure of natural resource revenue flows that are generated by a particular contract or agreement on a project-by-project basis, with reporting thresholds in the tens of thousands where all types of taxes, royalties, payments-in-kind and CSRs can be tracked, is also very important. Many of our global coalition members are local grassroots organisations who monitor municipal and regional budgets. Local information like this is vital to strengthen their work and it would enable citizens in that area to assess the development benefits of natural resource extraction to their particular communities.
In certain countries such as Indonesia, for example, the law requires that a specific percentage of natural resource revenues earned within a particular region be transferred back to that province by the central government. In order to determine that a region is receiving the correct amount of revenue from the central government, it is necessary to know how much revenue originates from that region.
We regard Section 1504 as a vital step forwards in promoting global transparency and accountability which significantly strengthens our work to translate that transparency into accountable management of national revenues by governments. We urge you retain the very clear intent of Congress in making the original law to this end. For these reasons, we believe strongly that the SEC should make its final rules on the basis that company reporting should be on a project-by-project basis, where project should be equivalent to a legal agreement such as a concession or licence, and that there should be no reporting exemptions for any country.
Please find attached a list of members of the Global BTAP Movement, and a copy of the Dar Es Salaam Declaration on Budget Transparency, Accountability and Participation.
Thank you.
(Attached File: s74210-305.pdf)