Natural resource revenues are a critical source of income for governments of more than 50 developing countries. When properly managed, these revenues should serve as a basis for poverty reduction, economic growth and development. Unfortunately, in some situations, resource revenues are mismanaged and accusations of government corruption arise. As a result, international oil and gas companies often face stakeholder concerns about how resource revenues are used by host governments.
There has been increasing criticism of companies that provide a revenue stream that is mismanaged by a host government, yet, no company has control over the actions of a sovereign state. Nonetheless, more companies now view financial transparency as a risk management tool, which can be crucial in maintaining a favourable corporate reputation and a stable operating environment.
Publish What You Pay
The Publish What You Pay (PWYP) campaign, launched in 2002 by George Soros and a coalition of NGOs, aims to help citizens of developing countries hold their governments accountable for management of extractive industry revenues. PWYP calls for all extractive firms to disclose annual net figures of payments to host countries. Talisman has adopted this approach since 2002.
It is not possible for companies, even if reporting in accordance with the high standards advocated by PWYP, to fully address the issue of resource revenue mismanagement. While individual companies have a role to play, the long-term and comprehensive solutions lie with host governments. It is for this reason that Talisman, along with many other multinational extractive companies, supports the Extractive Industries Transparency Initiative (EITI).
Supporting the EITI
The EITI is a global coalition of governments, companies, civil society, investors and international organizations that supports improved governance in resource-rich countries through the full publication and verification of company payments and government revenues from oil, gas and mining activities, with the goal of ensuring that extractive industry revenues contribute to sustainable development and poverty reduction.
Talisman became a signatory to the EITI in 2005 and has actively participated in the development of the policy framework for the EITI, including the development of a validation process for implementing countries and companies. An EITI Secretariat has now been established in Oslo, Norway. The EITI Board has recommended that the implementing countries, the private sector and the supporting countries share the principal funding responsibility for the international management costs of the EITI with the support of civil society organizations and the host Norwegian government. In this regard, Talisman has committed $50,000 per year to EITI for an initial three-year period. In 2007, Canada also joined EITI as a supporting country, announcing an initial contribution of $750,000 to the multi-donor trust fund and an annual commitment of $100,000. Talisman has consistently advocated to the Canadian government that it support the EITI process and the Company looks forward to working with the Canadian government on EITI issues.
Launched by UK's Prime Minister Tony Blair at the World Summit on Sustainable Development in Johannesburg, South Africa in September 2002, the EITI is a global multi-stakeholder initiative of developing country governments, donors, companies, investors, civil society organizations and international financial institutions seeking to increase transparency in the extractives sector in developing countries.
Strengthening the Relationship with Transparency International
In 2007, Talisman became a Charter Member of Transparency International (TI)-Canada. Launched in 1996, TI-Canada is a voluntary not-for-profit organization affiliated with more than 90 other national chapters formed, or forming, across the world, and an International Secretariat in Berlin. Its purpose is to inform and direct the attention of the business community, government and general public to the effects of corruption in the national and international marketplace. TI-Canada provides support and resources for public and private sector initiatives to confront and eliminate corrupt business practices in business transactions.
