EITI to tackle mining industry links to money laundering, transfer pricing, corruption and tax evasion

Mining Companies Will Have Be Transparent About Owners

EITI: “The lack of transparency in this area often creates an environment for other illegal activities such as money laundering and transfer pricing. This affects other sectors of the economy and often create a conducive environment for corruption and tax evasion” 

Post Courier | July 4, 2017

Companies directly involved in the petroleum and mining sectors will be required to disclose information regarding their beneficial owners come 2020.

Beneficial owner(s) of resource projects (mine, oil and gas companies) refers to the natural person(s) who directly or indirectly owns or controls a corporate entity/ company.

This follows after a signing of contract between PNG Extractive Industries Transparency Initiative (PNGEITI) National Secretariat and KPMG yesterday.

KPMG is the successful bidder for the implementation of the Beneficial Ownership Roadmap that spells out how Papua New Guinea can develop a matrix to report beneficial owners.

The implementation of the roadmap was effected yesterday and will be rolled out until the final quarter of 2019. During this time a platform or matrix will have been developed for reporting -through the EITI reporting process in 2020.

Head of the PNG Extractive Industry Transparency Initiative National Secretariat Mr Lucas Alkan said it was the decision of EITI international board.

It wants all EITI implementing countries, including Papua New Guinea, to ensure that corporate entities that bid for, operate or invest in extractive assets disclose the identities of their beneficial owners by January 1, 2020.

Mr Alkan said this was done to identify the real owners of the companies who had acquired rights to extract oil, gas and minerals which, in many cases were not known and often hidden behind a chain of corporate entities.

“The lack of transparency in this area often creates an environment for other illegal activities such as money laundering and transfer pricing. This affects other sectors of the economy and often create a conducive environment for corruption and tax evasion,” Mr Alkan said.

He said people living in resource-rich countries such as Papua New Guinea risked losing out as revenues generated from resources exploitation in the extractive industry were often misallocated and wasted.

“The EITI requirement will ensure that beneficial ownership information is made available through public registers such as those collected and stored at the Investment Promotion Authority through company registration process,” Mr Alkan said.

Mr Alkan expressed confidence working with KPMG to successfully implement the roadmap.

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Filed under Corruption, Financial returns, Papua New Guinea

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