CANADA has enacted a new law that will compel all Canadian mining companies such as First Quantum Minerals Ltd (FQM) and Barrick Gold Lumwana which run mines in Zambia to publicly disclose their financial payments to governments both in Canada and overseas.
The legislation will require that FQM,owners of Kansanshi Mining Plc and Kalumbila Minerals Limited, and Barrick Gold’s Lumwana Mining Company in Solwezi, declare all taxes borne and the taxes paid to both Ottawa and Lusaka.
The Extractive Sector Transparency Measures Act which has come into force is designed to help promote transparency and reduce instances of corruption in the mining industry.
The new Act would also help to ensure that the revenues collected and declared contribute to sustainable development and poverty reduction.
It would be mandatory for Canadian mining companies to report all payments to Government related to extractive activities which include the money effected as out of pocket; income tax, royalties and employer pension contributions. They will also be required to declare revenue collected from payroll taxes, value added tax, withholding taxes, among others.
According to the Mining Association of Canada (MAC), the enhanced transparency that will result from the legislation will help reduce instances of corruption by enabling citizens around the world to hold their governments accountable for how they allocate and spend mining revenues.
“This legislation places Canada at the forefront of international efforts to eliminate corruption and promote transparency.
The Mining Association of Canada and its members are proud to have played an active role in collaboration with the Government of Canada and civil society in the promotion and design of this important legislation,” says MAC president and chief executive officer, Pierre Gratton.
According to the Act, the reporting will have to be provided to the Ministry of Mines and posted to the company’s website within 150 days of the financial year end, which is May.
MAC says the first year of reporting is 2016 but a detailed administrative guidance of exactly how the reporting will be implemented would be communicated soon.
In a statement released in Ottawa, Canada, on June 1, MAC and its members expressed support for the coming into force of the Extractive Sector Transparency Measures Act and described the development as a fulfilment of Canada Prime Minister Stephen Harper’s commitment from June 2013 to enact such transparency legislation within two years.
The statement says the Canadian mining industry has been a strong supporter of transparency.
It adds: “From 2012 to 2014, MAC and fellow members of the Resource Revenue Transparency Working Group (RRTWG)—the Prospectors & Developers Association of Canada, Publish What You Pay-Canada and the Natural Resource Governance Institute—developed recommendations for Canadian governments and advocated for Canada to join the global transparency movement by making payment disclosure mandatory through legislation.
-Courtesy of SUMA SYSTEMS.