Originally posted at my blog spin.off , while working on the book.
Lingering in the back of my head is this campaign idea along the line of the Publish What you Pay initiative:
Publish your PR, (not the best name because of the restricted meaning or connotation of the term PR, but anyway.) Maybe better call it ‘Open your agenda’ or ‘File your agenda’ or whatever.
The idea would be to set up a campaign that forces companies to publish who they hire, and what for – and vice versa force PR companies and consultancy firms to publish their client lists, including what they were hired for.
Meanwhile Publish what you Pay has started this extentive research, called ’Measuring transparency (of companies) in the Extractive Industry’. I’ve included the research outline in this posting.
I would like to investigate the possibilites of joining this campaign, this research, or hooking up with our own and propose an extention of the Publish What You Pay campaign, with any given coalition of groups, now or later.
Tell me what you think.
For the latest on this research, check the Measuring Transparency website
TITLE: Measuring transparency (of companies) in the Extractive
AUTHOR: Publish What You Pay, Henry Parham
DATE: 1/30/2005
SUMMARY & COMMENT: Save the Children UK is managing this project on behalf of Publish What You Pay. The project examines steps taken by the Canadian government and some Canadian oil and gas companies to increase revenue transparency in the extractive industry. PWYP networks around the world, working with investors, are planning to use the findings and the measurement frameworks developed during this work as lobbying tools to push for concrete changes that promote greater revenue transparency so that we can hold corporations and governments accountable.
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Measuring transparency in the Extractive Industry: Proposal for measuring companies
1. Project Summary and Objectives
Project objectives: to measure and compare the relative disclosure performance of 36 international oil and gas companies in 6 resource-rich, transparency-poor countries.
Strategic objectives: provide a lobbying tool for NGOs to increase pressure on companies for greater transparency; highlight “leaders and laggards” in the industry to raise public and media awareness of transparency issues; provide investors with information to influence companies in which they invest; to embed the methodology into other institutions and organisations so that it becomes an essential part of measuring business risk and responsibility in the sector.
2. Background
Extractives Industries (EI) have generated enormous wealth and yet continue to be linked to high levels of conflict, poor economic growth and worsening poverty. The resulting instability is also a risk to the investment environment. Improving the governance of the industry and the revenues it generates through greater accountability is therefore in the interests of both civil society and the business community.
Such accountability in turn depends upon stakeholders having access to the information they need to judge performance. There has been a growing focus on the importance of improved transparency in the EI as a means of doing this. But beyond the rhetoric, how much progress is really being made? Who is being transparent and who is not? And how does their performance compare?
This proposal builds on a recently completed pilot project conducted by Save the Children UK which designed and tested a framework of indicators to measure how well companies, host and home governments support transparency of revenue payments and receipts in the extractive sector. A set of indicators for each actor was developed and tested in three countries: Nigeria, Azerbaijan and East Timor. The indicators were designed to capture actors’ performance on transparency on three levels: their policy commitments, the existence of management systems to support such commitments, and actual revenue disclosure.
Feedback on the pilot from a range of stakeholders including NGOs, the EITI secretariat and investors was very positive.
The value of the framework in being able to benchmark, measure and compare the progress of companies and governments over time was clearly recognised:
· A tool to measure corporate performance represents a powerful mechanism for investors and NGOs, identifying leaders and laggards in the industry, and to facilitate the lobbying of companies to improve performance on transparency.
· The framework to measure the progress and performance of host governments represents a useful tool for local civil society organisations and Publish What You Pay (PWYP) platforms in host countries to lobby their governments for change. For the EITI, the same framework also provides a useful basis for measuring EITI member country progress on its commitments to the EITI process.
· The framework for measuring home government support for transparency is a valuable lobbying tool for “northern” or G8 country-based NGOs. Information from the testing of this framework can be used to make demands on respective home governments to place greater disclosure requirements on companies through accounting, insurance or securities listing standards.
Conducting a full-scale study to measure the performance of all three actors simultaneously is not feasible for reasons both resource and timing related. Tactical reasons have also been considered. This phase of work seeks to focus on corporate disclosure performance. [A separate proposal will address the home government component]
3. Project description: Measuring corporate transparency performance in the oil and gas sector
a) Introduction
The choice of focus is driven by two key factors:
1. A focus on corporate performance will create high profile media interest
2. The EITI process to date has placed more emphasis on tracking progress of host government progress on EITI commitments; tracking the progress of companies has not proceeded at the same pace, even though the process is supposed to be tri-partite.
Our focus on corporate performance will lend much-needed balance to the process
b) Scope of work
Companies to be researched: 36 international oil and gas majors and minors operating in the following countries: Nigeria, East Timor, Azerbaijan, Angola, Venezuela and Indonesia.
Criteria for choice of companies is to some extent guided by the countries we wish to cover. This includes all major international listed companies and a range of small and medium sized companies.
Choice has also been dictated by the need to include state-owned companies with significant international operations, such as the Chinese National Offshore Oil Company (CNOOC) and Malaysia’s Petronas.
[please see Appendix 1 for detailed breakdown of companies operating in each country]
Choice of countries has been guided by a combination of factors: those that have made an official commitment to the EITI process; potential future members of EITI; those that remain resolutely outside the EITI process; those on the cusp of major oil developments; key oil producing regions (Africa, Asia, Middle East); those who represent a range of progress on transparency and governance.
Finally, the choice of companies also enables a complementary representation of major home countries we wish to address in the second component of our work, including major G8 countries that are home to oil producers. [Please see second proposal addressing home country performance]
Scope of work for this project will include three components:
Finalising the existing measurement framework for home countries that was developed in Phase I Collection of key data covered in the framework for each company, including:
i). Core information on revenue disclosure: Policy commitments to revenue disclosure and transparency (at HQ level) Proof of such commitments by existence of management processes and systems (at HQ level) Actual revenue payment disclosure at country level
ii) Other relevant information associated with disclosure performance (corporate reporting): Disclosure of information on operations and contract regimes at country level
· Disclosure of company financials at country level
· Disclosure of information on production/reserves (past, present and future)
3. Scoring and ranking of all companies’ performance using the indicator framework
c) Methodology and analysis
True disclosure performance rests on the premise that the information should be in the public domain, free, accessible and comprehensible to those who seek it. Therefore an accurate assessment of disclosure performance means that research methodology will remain primarily desk based. Key sources of information will be:
– annual reports
– similar documents published for shareholders and stakeholders
– company websites
d) Output and deliverables
A final report will deliver the following information:
· Benchmark and comparison of companies’ policies and systems for transparency at HQ level
· Benchmark and comparison of company performance on revenue disclosure across 8 host countries
· Illustration of discrepancies between those that claim to have policies in place but that have not delivered performance on the ground
· Demonstration of incremental progress
· Illustration of how far companies have yet to go on disclosure performance
· Identification of a “gold standard” for company performance
The report is intended as a lobbying tool to be used by a range of actors (identified in the background section of this proposal) to press for greater revenue transparency in companies.
Communication and dissemination
The product is intended for wide dissemination. Following finalisation of the report in early March, key British, European and international mainstream, CSR and financial press will be contacted with a press release and copy of the report timed for the March EITI conference.
The report will also be put on the PWYP website and members will be sought to aid its dissemination. Key target audiences: investors, companies, rating agencies, IFI’s, home and host governments, European and international bodies (UN, OECD etc). Additionally, it is expected that SC UK will seek to place feature articles also. A detailed communications plan will be developed by the Project Manager during the course of the project and submitted to donors one month in advance of dissemination.
COMPANIES TO BE COVERED IN PHASE II (yet to finalise last country)
Azerbaijan, East Timor, Nigeria, Angola, Venezuela, Indonesia Amerada Hess Corporation, BHP, BP, Canadian Natural Resources, Chevron Texaco Corporation, Conoco Phillips, CNPC, Devon Energy Corporation, Eni SpA, Exxon Mobil Corporation, Korean National Oil Co, Lukoil, Marathon Oil Corporation, Nexen Inc, Norsk Hydro, Northstar Energy Inc, Petronas, PetroCanada, Repsol YPF, Roc Oil Company, Royal Dutch/Shell, Santos Limited, Statoil, Sterling Energy, Talisman Energy Inc, TransAtlantic Petroleum Corp, Unocal Corporation, Woodside Petroleum,
Secret Manoeuvres 