Trafigura Beheer BV, the world’s third-largest independent oil trader, will from next year disclose some payments to foreign governments after joining a programme to promote transparency.
It joins the Extractive Industries Transparency Initiative, a voluntary programme set up in 2003 under which resource companies disclose payments, taxes and license fees paid to governments and state-owned enterprises in member countries, the Amsterdam-based firm said today in an e-mailed statement.
“This policy reflects Trafigura’s commitment to transparency and accountability, as core components of responsible trade and better-governed natural resource sectors,” Jeremy Weir, chief executive officer, said.
Trafigura’s membership marks the first time a dedicated commodity-trading company has agreed to adhere to the program that already covers about 90 mining and energy firms including Glencore plc and Royal Dutch Shell plc, which also trade commodities. Trafigura’s commitment is “unprecedented,” said Jonas Moberg, head, EITI International Secretariat, who hopes other trading firms will follow.
READ ALSO: NNPC exports oil and gas worth $3.71bn in last two years – report
“We hope that this will spur transparency and accountability in the commodity trading industry,” Moberg said in the Trafigura statement.
Gunvor Group Ltd said it may also join the EITI. “We have been considering joining EITI and view it in principle as a good thing,” Seth Pietras, a spokesman for Gunvor, said by phone from Geneva.
Trafigura’s move is a rare breaking of ranks within the commodity-trading industry, where players tend to behave in lockstep regarding regulatory issues.
The programme covers countries compliant with the EITI, including Azerbaijan, Chad, Cote d’Ivoire, Guinea and Zambia, plus candidate countries that range from Afghanistan and Colombia to the U.K. and the U.S.
Trafigura will disclose payments it makes to governments and state-owned enterprises for purchasing oil, Andrew Gowers, a spokesman for the company, said. The disclosure won’t cover metals trading or product swaps, such as those in Nigeria where Trafigura exchanges gasoline for crude exports.
Activists who have called on commodity traders to be more transparent welcomed the news while cautioning they still have concerns about the scope of disclosure to prevent corruption.
“Trafigura should disclose its payments to those governments that don’t participate in the EITI,” Alexandra Gilles of the Natural Resource Governance Institute said in a report on the NGO’s website. “Why would transparency be less valuable to citizens in those places?”
The company for example, wouldn’t have to disclose purchases of oil from countries like Angola, where Trafigura or related companies have joint ventures, Gilles said.
