Corporate giants stay silent on local impact, report shows
The world’s biggest companies disclose little or no financial details about their operations outside their home country, a new report from Transparency International has shown. Ninety of the 124 companies assessed do not disclose the taxes they pay in foreign countries, while 54 disclose no information on their revenues in other countries.
The report, Transparency in Corporate Reporting, analysed 124 companies from the Forbes list of the world’s biggest publicly-traded companies. The companies, whose combined market value is more than US$14 trillion, are ranked based on their reporting of the measures they take to prevent corruption, information about subsidiaries and holdings, and key financial information about overseas operations. According to these criteria, UK companies are the best performers, Chinese companies the worst.
“We need more transparency from multinational companies, whose power in the world economy closely rivals the biggest countries,” said Transparency International Chair, José Ugaz. “With greater economic power comes greater responsibility. Bad corporate behaviour creates the corruption that causes poverty and instability. By not responding to people’s demands for greater transparency and accountability, companies risk harming their brand and losing customers.”
The report shows that the world’s biggest oil, gas and mining companies are not ready for the kind of transparency rules that will enter into force across the EU from July 2015. These regulations require extractive companies to report payments such as taxes to governments on a country-by-country and project-by-project basis. In the US, Section 1504 of the 2010 Dodd-Frank act includes similar measures, but implementation has been delayed by an oil lobby lawsuit. The respective laws will apply to large companies registered in the EU, and to companies listed on EU or US stock exchanges.
Of the 24 extractive companies in the report who would fall under the new EU and US rules, 19 disclose tax payments and revenue in less than half the countries where they operate. Only BHP Billiton, Statoil and Indian firms ONGC and Reliance disclose tax payments in almost all the foreign countries where they operate.
You can download the full report here.