PAYMENTS by mining companies to governments in Australia and developing countries will become more transparent after the federal government revealed it would trial stringent global disclosure requirements for the resources sector.
Foreign Minister Kevin Rudd and Resources Minister Martin Ferguson revealed Australia would undertake a pilot of the global Extractive Industries Transparency Initiative. It will also help bankroll the initiative in developing countries.
The EITI raises transparency over payments to governments and government-linked entities in the mining and oil and gas sectors and transparency over revenues by host-country governments.
It has been implemented in 35 resource-rich countries, and 29 countries have produced EITI reconciliation reports. The initiative aims to limit sovereign risk for international mining companies.
Under the EITI pilot, Australia will assess the transparency of its financial-reporting arrangements for the resources sector against EITI principles -- seen as a global benchmark for natural resource revenue management.
"Given Australia's very significant mining sector, we hope this decision will encourage other countries to adopt EITI," Mr Rudd said at the CHOGM Australia-Africa Foreign Ministers' Mining Breakfast in Perth yesterday.
"Transparency and accountability are key for developing countries to reap the full benefits of their resource sector. Well regulated, the sector cannot only provide economic growth but also broader development benefits by funding basic services like health and education."
Beginning on July 1 next year, the $500,000 pilot will be funded by the Department of Resources, Energy and Tourism and will be overseen by government representatives, industry and non-government organisations.
Mr Rudd said Australia would provide $12.7 million to support the advocacy of EITI, including supporting developing countries with technical challenges.
The Australian
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