Publish What You Pay’s Statement: Senate Inquiry into exploration and production of oil and gas in the Beetaloo Basin.

Opening Statement

-          My name is Clancy Moore and on behalf of Publish What You Pay Australia I would like to thank you for the opportunity to speak today.

-          PWYP Australia is a coalition of anti-corruption, human rights, faith-based, environment, landowner and union organisations campaigning for greater transparency and accountability in the mining, oil and gas sectors. PWYP Australia works with the global Publish What You Pay coalition, a network of over 1000 organisations in more than 51 countries around the world, united in our call for an open and accountable extractive sector, so that communities share in the benefits of our natural resources and a just transition.

 Today, I will focus on two points:

-          Firstly, how weaknesses in Australia system of governance of the mining, gas and oil sectors, increase the chances of corruption, dodgy deals and tax avoidance.

-           Secondly, I will outline integrity risks and red flags in relation to three of the fourteen eligible companies receiving public money under the Beetaloo Cooperative Drilling Program. These red flags includes the use of secrecy jurisdictions, shell companies and political donations.

-          Australia is seen as a leader in the mining, gas and oil sectors, however, Australia’s standard of governance for these sectors, including addressing corruption and financial transparency lags way behind OECD nations - Germany, Canada, UK, the 27 EU nations and even our neighbors PNG and Indonesia.

-          Unlike 51 other resource rich countries, the Commonwealth has chosen to delay for many years implementing Extractive Industries Transparency Initiative (EITI). The EITI is known the  as gold standard for anti-corruption and ensuring governance of the oil, gas and mining sectors.

Despite widespread support from MCA and APPEA, the Commonwealth’s failure to do this  means communities, investors and even governments are left in the dark as to project level revenue flows and who ultimately benefits from the companies in the Beetaloo. More broadly, this increases the risk of corruption and tax avoidance.

-          Additionally, Australia unlike the UK and Canada does not have laws requiring companies to disclose their ultimate owners and beneficiaries. Or have laws to outlaw the use of anonymous offshore shell companies.

-          Hidden ownership and the use tax havens or secrecy jurisdiction can allow companies to avoid scrutiny and regulations including tax responsibilities, including some in the Beetaloo basin.

-          Senators, it is estimated that Australia loses between $5 billion and $6 billion in revenue every year to ‘offshoring’ across all industries.

-          Understanding who benefits from resources for example in Beetaloo basin, money flows, deals, licensing process and contract is of great public interest, particularly for traditional owners whose land if often the site of a mine and gas well.

-          To be clear, any company that receives tax-payers money from the Commonwealth must adhere to the highest standards of transparency and accountability.

-          Publish What You Pay research and recent media coverage raise red flags for 3 companies in particular. This includes Falcon Oil and Gas, Sweetpea Petroleum and Empire Energy.

-          In the case of Sweetpea Petroleum and Falcon Oil Gas, these companies both have use shell companies, tax havens and also opaque ownership structures. 

-          As reported in by Nine Media, Anne Hyland on May 29th, Empire energy also appears to have strong links with the Liberal Party. This raises further raises questions as to the recent awarding of 21 million dollars in grants to their subsidiary Imperial Energy.

Based on the above:

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-          1) To ensure integrity in Australia’s system of governance of oil and gas, including in the Beetaloo basin, the Commonwealth to restart the multi-stakeholder group of the Extractive Industries Transparency Initiative (EITI) in 2021 and commit with a timeline to Australia becoming an EITI candidate country

-          2) the Commonwealth should rule out any public money under the program going to oil and gas companies, including their subsidiaries, who use secrecy jurisdictions and offshore shell companies without sufficient, or reasonable explanation.