Overview

This bill mandates increased transparency in the extractive industries (oil, gas, and mining). Companies meeting specific criteria must publicly disclose payments made to governments and government-owned entities, along with detailed financial information related to their operations in each country.

Description

Reporting Requirements

Resource Extraction Companies (RECs), defined as UK-incorporated or UK-listed companies involved in resource extraction or having subsidiaries/associates involved, must report:

• All payments (taxes, royalties, fees, bonuses etc.) to governments and government-owned entities, categorized and electronically tagged (amount, currency, period, business segment, recipient government, project).
• Detailed financial information per country of operation: sales, purchases, labour costs, financing costs, pre-tax profits, tax charges (including payments and liabilities), asset details, and estimated reserves data.

Non-Compliance Penalties

Failure to comply results in civil penalties under the Companies Act 2006.

Definitions

The bill defines RECs, specifies what constitutes "payments," and clarifies the definition of a "country in which the REC operates."

Government Spending

The bill is unlikely to directly increase or decrease government spending. The primary impact is on increased administrative and enforcement costs associated with overseeing the reporting requirements.

Groups Affected

This bill will primarily affect:

• Resource Extraction Companies (RECs): Increased reporting burdens and potential penalties for non-compliance.
• Governments and Government-Owned Entities: Increased public scrutiny of payments received from extractive industries.
• Investors and the Public: Increased access to information about extractive industry activities and financial dealings.

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