Implement the Extractives Sector Transparency Measures Act (CA0058)

Why do this: The Government of Canada remains committed to improving the transparency and accountability of the Canadian extractives sector. In its second Action Plan, legislation was introduced, the Extractive Sector Transparency Measures Act (ESTMA), which established new reporting and transparency obligations for the Canadian extractive sector to contribute to global efforts against corruption in the extractive sector. How will it be done: Canada’s extractive sector has a well-established financial reporting system, which ensures transparency and the good governance of natural resource revenues. Implementation of the ESTMA will help improve the transparency of payments made by extractive companies involved in the exploration and/or extraction of oil, gas, or minerals to all levels of government, both foreign and domestic. The new reporting system complements existing reporting requirements with a view to ensuring Canada’s framework is aligned with other G-8 countries and is consistent with existing international standards, particularly those of the United States and the European Union

17. Implement the Extractives Sector Transparency Measures Act

Commitment Text:

The Government of Canada will implement the Extractive Sector Transparency Measures Act (ESTMA) that requires the reporting of certain payments made to governments related to the commercial development of oil, gas, and minerals.

Milestones:

17.1. Undertake outreach activities with reporting entities to ensure awareness and understanding of processes for publishing their reports based on a consistent template and format.

17.2. Improve public access to published reports through a common online window.

17.3. Seek broader alignment of ESTMA with other jurisdictions in Canada and around the world.

Responsible institution: Natural Resources Canada

Supporting institution(s): N/A

Start date: Not specified

End date: Not specified

Editorial Note: The text of the commitment was abridged for formatting reasons. For full commitment text, visit: http://www.opengovpartnership.org/wp-content/uploads/2001/01/Canada_AP3.pdf.

Context and Objectives

Canada passed the Extractive Industry Transparency Measures Act (ESTMA) in connection with its second action plan, and it came into force on 1 June 2015. This commitment aims to improve implementation of ESTMA and expand the utility and accessibility of ESTMA material through outreach to reporting entities, publishing reports through a common online window, and aligning ESTMA across jurisdictions. Although the milestones under this commitment are clear and target an important action area, Publish What You Pay-Canada, a leading civil society stakeholder on this issue, noted that the milestones set a relatively low bar, and that strong accessibility still required significant improvement beyond what the commitment promises.

Completion

Natural Resources Canada carried out several outreach activities to promote awareness of ESTMA (Milestone 17.1), including developing a webinar on its website,[Note147: Available at: http://www.nrcan.gc.ca/mining-materials/estma/18184#webinar.] participating in events in Vancouver, Calgary, Winnipeg, Toronto, Ottawa, Montreal, and St. John’s, and posting an article on Rock to Road, an industry publication.[Note148: Available at: https://www.rocktoroad.com/news/everything-you-need-to-know-5131.] Natural Resources Canada also created a survey of reporting challenges. The results are set to be analysed during the second year of implementation. Substantial progress has been made here, and the milestone is on time to be completed.

In terms of Milestone 17.2, Natural Resources Canada developed an online portal for ESTMA reports.[Note149: At: http://www.nrcan.gc.ca/mining-materials/estma/18198.] This is substantial progress, and the milestone is on time to be completed.

For Milestone 17.3, Natural Resources Canada reports that they have held bilateral meetings on ESTMA with Quebec, the United Kingdom and France, to align standards for reporting on payment categories, the definition of 'payee', and similar values. This represents limited progress, and the milestone is on time to be completed.

Early Results

Implementation of ESTMA has been moving forward, as evidenced by the reporting posted on Natural Resources Canada’s online portal. In terms of civil society, Publish What You Pay-Canada has been utilising the information which has been uploaded, though they are also critical of the materials which are available, as outlined below.

Next Steps

Several Canadian civil society organisations including, though not limited to, Publish What You Pay-Canada, are keenly interested in tracking more information about Canada’s extractive industries, and have identified this as an important priority area going forward. However, in utilising Natural Resources Canada’s online portal, Publish What You Pay-Canada noted that searchability is virtually non-existent and, even more problematic, reporting is not being done via machine-readable formats. The IRM researcher recommends bringing these disclosures in line with better practices for open data. This includes both building additional accessibility and searchability into the website and imposing better formatting standards for companies regarding their ESTMA disclosures to better facilitate scraping and reprocessing of this information.

17. Implement the Extractives Sector Transparency Measures Act

Commitment Text: The Government of Canada will implement the Extractive Sector Transparency Measures Act (ESTMA) that requires the reporting of certain payments made to governments related to the commercial development of oil, gas, and minerals.

Milestones:

17.1. Undertake outreach activities with reporting entities to ensure awareness and understanding of processes for publishing their reports based on a consistent template and format.

17.2. Improve public access to published reports through a common online window.

17.3. Seek broader alignment of ESTMA with other jurisdictions in Canada and around the world.

Responsible institution:Natural Resources Canada

Supporting institution(s): N/A

Start Date: Not specified

End Date: Not specified

Editorial Note: The text of the commitment was abridged for formatting reasons. For full commitment text, visit http://www.opengovpartnership.org/wp-content/uploads/2001/01/Canada_AP3.pdf.

Commitment Aim

This commitment built on a commitment from the previous action plan to pass legislation establishing new reporting and transparency obligations for the Canadian extractive sector: the Extractive Sector Transparency Measures Act (ESTMA). This commitment aimed to improve the implementation of ESTMA, and the accessibility of information published under that law, by doing the following:

•Conducting outreach to reporting entities to raise awareness of the new standards;

•Developing an online window for access to reports submitted under ESTMA; and

•Engaging with other jurisdictions to align reporting standards.

Status

Midterm: Substantial

From July 2016 to June 2017, Natural Resources Canada conducted several outreach activities connected to Milestone 17.1. These included an online webinar, events in seven Canadian cities, and an article in an industry publication.[Note144: See “Recorded Webinar on the ESTMA,” Natural Resources Canada, http://www.nrcan.gc.ca/mining-materials/estma/18184#webinar; and “ESTMA 101: Everything You Need to Know,” Rock to Road, 2 February 2017, https://www.rocktoroad.com/news/everything-you-need-to-know-5131.] The department also developed a survey of reporting challenges, meant to inform and improve outreach and awareness-raising efforts going forward. Regarding Milestone 17.2, by the midterm, Natural Resources Canada had developed an online portal for Extractive Sector Transparency Measures Act (ESTMA) reports.[Note145: “Links to ESTMA Reports,” Natural Resources Canada, http://www.nrcan.gc.ca/mining-materials/estma/18198.] Under Milestone 17.3, Natural Resources Canada reported having held bilateral meetings on ESTMA with Quebec, the United Kingdom, and France, to align standards for reporting. Such standards included those on payment categories and the definition of “payee.”

End of term: Complete

Building on the survey carried out in connection with Milestone 17.1, Natural Resources Canada developed a revised guidance document for reporting entities. The department provided this guidance to stakeholders in March 2018.[Note146: The guidance document is available at https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/estma/pdf/ESTMA%20Guidance%20-%20Version%202_1%252C%20July%202018.pdf.] It also formed a Stakeholder Advisory Group to collaborate on improving tools and guidance. Regarding Milestone 17.2, over the course of the second year of implementation, Natural Resources Canada uploaded 850 reports to the online portal, and 1,419 reports were available as of June 2018.[Note147: “Links to ESTMA Reports.”]

Under Milestone 17.3, Natural Resources Canada reports that discussions about cross-jurisdictional reporting requirements continued during the second year of the action plan. The discussions covered the development of a memorandum with the government of Quebec regarding collaboration and the sharing of information.[Note148: “Entente de Principe Concernant la Coopération, la Consultation et l'Échange de Renseignements Relatifs aux Mesures de Transparence Conclue entre le Gouvernement du Québec, Ressources Naturelles Canada et l'Autorité des Marchés Financiers,' 22 October 2017, https://lautorite.qc.ca/fileadmin/lautorite/reglementation/mesures-transparences/Ententes/2017oct22-transparence-entente-echange-renseignements-fr.pdf.] Natural Resources Canada also pointed to a determination they made that reports filed under the European Union Accounting and Transparency Directives are now determined to be an acceptable substitute for reporting under Extractive Sector Transparency Measures Act. However, in the absence of more proactive measures to harmonise reporting, that seems to be less of a step forward in terms of expanding access to information. It appears to be a move to ease the burden on industry. Nonetheless, all three milestones have been completed.

Did It Open Government?

Access to Information: Marginal

Canada passed the Extractive Sector Transparency Measures Act (ESTMA) in connection with its second action plan, and it came into force on 1 June 2015. Its passage was generally welcomed as an important step forward.[Note149: See, for example, the 2016 end-of-term IRM report, available at https://www.opengovpartnership.org/wp-content/uploads/2001/01/Canada_EOTR_2014-2016_EN.pdf.] Consequently, working on implementation and improving the accessibility of information published under ESTMA are natural areas for further engagement. However, during the consultations for developing Canada's midterm IRM assessment, Publish What You Pay-Canada, a leading civil society stakeholder on this issue, noted that this commitment sets a relatively low bar. The organisation pointed to a need for additional actions, such as enhanced searchability, and for a requirement that reporting be done in machine-readable formats. Although a few of the latest reports are in an XLS format, the vast majority are in PDF format. This makes them more difficult to harvest, process and manipulate, though the search and filtering function seems to have improved and now permits users to sort the reports by date, name, size and type, as well as to find reports based on key words. The commitment constituted a step forward, as information is more available and accessible than it was at the outset of this action plan. However, considerable work remains in terms of breaking down barriers to the information's use.

Carried Forward?

There are no commitments in Canada's fourth action plan related to the implementation of the Extractive Sector Transparency Measures Act.