Transparency in Extractive Industries (FR0010)

STAKES
Transparency in the extractive industries aims to promote greater corporate social responsibility and better public governance, as well as to increase the trust of investors and the public in the mining sector.
It also fulfills the duty for exemplary behavior that France wishes to demonstrate towards developing and emerging countries, by strengthening standards that contribute to putting international companies on an equal footing. It supports political will to develop a responsible mining activity in French Guiana and to promote the mining sector in metropolitan France.

CONTEXT & AIM Since 2002, the Extractive Industries Transparency Initiative (EITI) has brought together, on a voluntary basis, States, extractive companies and civil society organizations wishing to promote, in countries that are rich in natural resources, greater transparency in the income from mineral exploitation. France has provided political, technical and financial support to this initiative since 2005. The main mining, oil and gas companies, such as AREVA, TOTAL, ERAMET and ENGIE officially support ITIE. Also, the international coalition "Publish What You Pay", a civil-society movement at the origin of the ITIE, has a French platform currently coordinated by Oxfam France. At the G8 summit in Lough Erne in June 2013, the President of the French Republic stated that France intended to apply the ITIE standard throughout its territory and become a "candidate country" for the initiative. At the same time, France argued for the adoption, at the European level, of a restrictive standard for transparency (Chapter 10 of directive 2013/34/EU of the European Parliament and Council meeting dated June 26th 201314, transposed in the Act No. 2014-1662 dated December 30th 2014 covering various provisions on the adaptation of legislation to European Union law in economic and financial matters15), which would oblige French companies to declare, per project and per country, the payments they make as part of their extractive activities from the 2015 tax year. This legislative provision was included in the French commercial code on December 30th 2014.

ROADMAP
• Join the Extractive Industries Transparency Initiative (EITI) and work on the accessibility of open data as part of ITIE and of the declarations of companies, according to chapter 10 of the European accounting directive
- Summer 2015: designate a French high representative for ITIE and set up a project team with the necessary human and financial resources to prepare the French application to join ITIE
- September 2015: establish a national tripartite committee for ITIE
- March 2016: first declaration of companies as required by chapter 10 of the accounting directive
- Before December 2016: presentation of the French application to join EITI
- 1st half-year 2017: France becomes a "candidate country" for the EITI

8. Transparency in Extractives

Commitment Text:

Strengthen transparency in payments and income from the extractive industries. 

ROADMAP

· Join the Extractive Industries Transparency Initiative (EITI) and work on the accessibility of
open data as part of ITIE and of the declarations of companies, according to chapter 10
of the European accounting directive

o Summer 2015: designate a French high representative for ITIE and set up a project
team with the necessary human and financial resources to prepare the French
application to join ITIE

o September 2015: establish a national tripartite committee for ITIE

o March 2016: first declaration of companies as required by chapter 10 of the
accounting directive

o Before December 2016: presentation of the French application to join EITI

o 1st half-year 2017: France becomes a 'candidate country' for the EITI

Editorial Note:This is a partial version of the commitment text. For the full commitment text please see France's national action plan: https://bit.ly/2MTYhsR.ITIE is the French acronym for EITI. The two acronyms are used interchangeably in the commitment text.

Responsible Institution: Ministry of Foreign Affairs and International Development; Ministry of Ecology, Sustainable Development and Energy; Ministry of Finance and Public Accounts; and Ministry of the Economy, Industry and the Digital Sector

Supporting Institution(s): N/A

Start Date: Summer 2015 

End Date: September 2017

Commitment Aim

This commitment aimed to strengthen transparency in payments and income involved in the extractive industry by joining the Extractive Industries Transparency Initiative (EITI). This commitment sought to implement Directive 2013/34/EU of the European Parliament and Directive of the EU Council of 26 June 2013 concerning transparency within extractive industries. French civil society considers the implementation of these directives essential to combatting corruption and exposing cases of questionable practices by French multinational extractive companies. Nineteen French CSOs published a paper supporting the CBCR –Country-by-Country Reporting – as applied to global companies.

President François Hollande first announced France's wish to join EITI in May 2013 but the process was not begun by the time of drafting France's first action plan. In 2014, France was one of the first countries to enact the transparency and accountability elements of the EU Directive by publishing public reports of extractive enterprises, which were useful but failed to meet the level of disclosure of CBCR. In 2013, the French parliament reviewed a proposal to require financial establishments to release reports on each country in which they operate. However, this bill was never voted on.

Status

Midterm: Limited

Implementation of this commitment was limited by the midterm. The process lacked inclusiveness and stakeholders were unable to agree on priorities and geographical delimitation.

In an effort to form a multistakeholder group, two inter-administration meetings took place in March and April 2016 and civil society representatives held a roundtable discussion on 3 June 2016. Disagreements about the financial and geographical limits of EITI in France stalled further progress on forming the multistakeholder group. Civil society believes EITI practices should extend to all overseas French territories, particularly French Guiana and New Caledonia, to ensure that French petroleum, gas, and mineral companies will be held to a standard of transparency even when operating abroad. The government, meanwhile, would like to limit the EITI to “mainland” France (France métropolitaine).

Oxfam France noted that the project lacked ambition and did not take into account the views of the 15 CSOs that constitute Publish What You Pay (PWYP) France. The organisation says that the process was not sufficiently inclusive and that many relevant groups were not invited to the table.

The Ministry of Economy and Finances - in charge of France's EITI application - halted the process altogether in anticipation of the presidential election of May 2017. For more information, please see the IRM midterm report.^{[Note72: Independent Reporting Mechanism, France Rapport D'ètape (OGP, 2017), https://www.opengovpartnership.org/wp-content/uploads/2001/01/France_Progress-Report_2015-2017.pdf.]}

End of Term: Limited

The IRM researcher did not find any publicly available information signalling that further steps were taken by France to establish a multistakeholder group and move toward joining EITI during the implementation period. The government self-assessment indicates that completion is limited and that efforts toward accession to EITI have been suspended indefinitely. The self-assessment recognises that this commitment will not be fulfilled if sufficient resources are not allocated to these activities. Then Minister of Economy and Finances announced during the OGP Summit in December 2016 that the revision of the Mining Code, then discussed in Parliament, should move the process of accession forward and allow France to join EITI by the end of 2017.

Etalab indicated that there are still disagreements between the government and civil society as to the perimeters of EITI in France, and that fiscal secrecy remains an obstacle. The team indicated that there was a leadership issue and that joining EITI is currently at a standstill. Quentin Parrinello from Publish What You Pay France notes that the government has not made any progress toward joining and implementing EITI. He adds that after the roundtable organised in June 2016, there was no outreach to civil society, and that informal statements from French officials suggested that France would not implement EITI despite continuing to promote it on an international level. However, no official declaration has been shared with civil society to formally announce this decision.

Did It Open Government?

Access to Information: Did Not Change

Civic Participation: Did Not Change

Due to a lack of implementation, the IRM researcher concludes this commitment did not open government practice regarding access to information or civic participation.

It is important to note that during this implementation period, circumstances relevant to the successful implementation of this commitment have become more restrictive. The law “Sapin 2,” adopted December 2016, initially contained an article on publicly reporting industry involvement in each country, a critical component for joining EITI and therefore related to this commitment. Though this country-by-country report was limited in scope, the Constitutional Court as an obstacle to free enterprise censured the article.^{[Note73: Cour constitutionnelle, Décision n° 2016-741 DC du 8 décembre 2016, http://www.conseil-constitutionnel.fr/conseil-constitutionnel/francais/les-decisions/acces-par-date/decisions-depuis-1959/2016/2016-741-dc/decision-n-2016-741-dc-du-8-decembre-2016.148310.html (accessed on 17 December 2017).]} CSOs like CCFD-Terre solidaire consider this a political decision since the Constitutional Court had previously declared that freedom of enterprise was not absolute. Additionally, constitutional experts have declared that country level reporting and fiscal openness was not unconstitutional.^{[Note74: La Croix, Loi Sapin 2 : « la censure du reporting pays par pays est une décision désastreuse » (La Croix, 9 Dec. 2016), https://www.la-croix.com/Economie/France/Loi-Sapin-2-censure-reporting-pays-pays-decision-desastreuse-2016-12-09-1200809335 (accessed 28 Sept. 2017).}

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Carried Forward?

This commitment was not carried over to the next action plan.