June 12, 2013
Mike Pickersgill, partner and co-head of the firm’s Mining and Metals practice, was quoted in the Canadian Bar Association’s National magazine in an article on financial disclosure in the mining and other resource industries; specifically, regarding concerns about resource companies’ disclosure management with foreign organizations and governments. Below is an excerpt of the article.
Last year, the Securities Exchange Commission was the first to adopt a new rule under the Dodd-Frank Act requiring issuers in the U.S. to disclose payments made to a foreign government for the purpose of the commercial development of oil, natural gas, or minerals. Now the European parliament has overwhelmingly approved plans to bring its disclosure rules in line with the SEC. The Canadian government announced its mandatory reporting rules in London ahead of next week’s G8 meeting in Northern Ireland where tackling trade, taxes and transparency top the agenda.
To this end, Canadian regulators will soon receive a framework from the Resource Revenue Transparency Working Group, which consists of non-governmental organizations Publish What You Pay (PWYP) and the Revenue Watch Institute (RWI) as well as the Mining Association of Canada (MAC) and the Prospectors and Developers Association of Canada (PDAC). The working group’s recommendations are expected to be similar in scope to U.S. and E.U. legislation, though the payment threshold will likely be lower, some observers say. Even without Canadian regulatory participation, the majority of global extractive firms will have to comply.
That said, any new reporting laws are subject to consultations with provinces, territories and First Nations. They also go hand-in-hand with recently stiffened anti-corruption legislation following a slew of cases against Canadian mining resource firms.
Liberal MP John McKay has already introduced a private member’s bill, the Transparency of Payments Made by Mining, Oil and Gas Corporations to Foreign Governments Act. PDAC says, however, it does not support the bill because the organization is providing its own framework.
“This is primarily intended to be a reporting obligation and the good news is that many companies in the extractive industries have for some time been managing and now disclosing in various formats the efforts, financial and otherwise to support their social licence to operate,” says Michael Pickersgill a partner at Torys in Toronto, who like, other sources in this story, spoke to National prior to this week’s announcements.
To read the full article, click here.