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Large extractive companies dealing with oil, gas and minerals will be obliged to disclose full details of their payments to national governments for every project that they operate, under a deal between Parliament and Council negotiators backed on Thursday by the legal affairs committee. The aim is to make companies dealing with strategic resources and national governments more accountable.

Arlene McCarthy (S&D, UK), responsible for the legislation, said: "This is a major step forward in the global fight against corruption. Parliament maintained a strong line during the tough negotiations with member states. As a result, project-level reporting, a low materiality threshold for disclosure and no exemptions from reporting payments were secured, giving communities in resource-rich countries the necessary tools to hold their governments to account for payments they receive from multinational companies."

Full disclosure

A major success for Parliament was to remove the "tyrant's veto" from the draft legislation – a clause exempting companies from the reporting requirements where the host country's criminal law bans such disclosure.

The draft law forces large extractive companies dealing with oil, gas and minerals and loggers of primary forests to provide full details of their payments to national governments.

Main achievements of the legislation:

o Companies will be obliged to publish payments to governments on a project by project basis, i.e. for each lease or licence obtained to access resources, for example a mine or an oil field.

· All payments above €100,000 would have to be disclosed. There is an anti-evasion clause to ensure that companies cannot artificially split or aggregate payments to avoid disclosure.

· All levels of government are concerned: payments to federal, national, regional and local governments will have to be reported.

· The types of payment to be reported include: production entitlements, certain taxes, royalties, dividends, bonuses, fees and payments for infrastructure improvements.

· A review clause was added: three years after entry into force, the European Commission will explore the possibility of including additional sectors and disclosure provisions.

The rules will also reduce the administrative burden on small and medium sized businesses.

The text has now to be confirmed by the full House, possibly on 12 June in Strasbourg, and formally adopted by Council in order to enter into force.

Committee on Legal Affairs

On the Chair: Klaus-Heiner Lehne (EPP, DE)

Rapporteur: Arlene McCarthy (S&D, UK)

Procedure: ordinary legislative procedure (codecision)