14 August 2008
The International Finance Corporation (IFC) fails to provide adequate links to government payment disclosures by its extractive industry clients.
The International Finance Corporation (IFC) requires extractive industry (EI) clients to publish all material payments to the government, as laid out in its Policy on Social and Environmental Sustainability. The IFC provides links to these disclosures on its website. The site was to be updated in July 2008 and then subsequently in June of each year. However, as of August 13, 2008, only six of the nine applicable projects contained activated links. Of these six, one provided only 2006, rather than 2007, figures. Projects without any links included Vostok in Russia, Melrose in Egypt and Bulgaria, and Pan American Energy in Peru.
The types of data reported varied greatly among companies. For example, Kappa Energy in Columbia reported detailed payments by level of government and payment type. On the other hand, Petrotesting, also in Columbia, provided only aggregate taxes and royalties. The Petrotesting data was for 2006, not 2007, and was available only in Spanish. Similarly, though IPR broke down its payments by specific concessions, it provided only a lump sum for the amount paid to the government. Lonmin in South Africa provided data for 2006 and 2007 but did not disaggregate taxes. Finally, for the two projects in Peru, the only country in the group party to EITI, one project (Maple Energy) had an active link while the other (Pan American Energy) did not.
Clarity was another significant issue in reported data. For example, Lonmin provided data on its cash distributions. However, it was not clear which payments, other than the aggregate “government taxes,” were made to the government. The report also contained payments to “community projects” and “donations.” It is unclear whether any part of these social payments was directed to the government. For many companies, it was unclear whether the data referred to the total amount paid by that company to the government or only to the specific IFC project. This was complicated by the location of the data. In certain cases, the links went directly to government payment data. In others, the data was within larger company reports, making it more difficult to locate. Data contained within company reports was more limited than the data from companies with links to government payments alone.
These discrepancies among company data likely reflect a lack of clarity in IFC policy. The types of payments to be disclosed are not adequately specified, nor are the ways in which these payments should be broken down. The IFC has also failed to enforce its own reporting standards, as a third of the projects are still missing links on the website.
For a summary of company data, see:
Available Company Data for IFC Required Disclosures (Acrobat pdf, 174 KB)
Or visit the IFC EI Payment Disclosure website.