Written answers

Tuesday, 6 July 2010

Department of Foreign Affairs

Extractive Industries

10:00 am

Photo of Joanna TuffyJoanna Tuffy (Dublin Mid West, Labour)
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Question 57: To ask the Minister for Foreign Affairs his views on the recent Concord proposals regarding European Union policy on extractive industries in view of the fact that such considered proposals represent a wide consensus among European non governmental organisations. [29640/10]

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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A recent report by Concord, the European umbrella organisation for development Non-Governmental Organisations, focuses on the use of tax planning and trade pricing mechanisms by multinational mining corporations to avoid tax payments in African countries. It calls for the implementation of a series of measures to counteract such practices, including "country by country" reporting in European and international accounting regulation and the imposition of sanctions for uncooperative tax havens. The report also focuses on the need to build the capacity of tax collection administrations in developing countries.

The Government believes strongly that the building of developing countries' capacity to mobilise domestic revenues is vital to development. This is particularly the case in countries which are rich in natural resources. Several of the priority countries for Ireland's development programme rely on the utilisation of natural resources to augment their domestic revenues: for example gold, precious stones and minerals in Tanzania, oil in Uganda and copper in Zambia.

The Extractive Industry Transparency Initiative (EITI) initiative, which has been developed under the EU-Africa Governance Partnership, has been instrumental in supporting improved governance and accountability through the verification and full publication of company payments and government revenues from oil, gas and mining. Ireland strongly supports the further development of this important initiative.

We also support the work now taking placing within the OECD to examine the question of a mandatory county-by-country reporting requirement for the extractive industry sector.

In recent months, Ireland has contributed to the formulation of Council Conclusions on Tax and Development which were adopted by the June 2010 Foreign Affairs Council. They set out an action plan for the further development by the EU of a comprehensive approach to support for tax administration and reforms. They promote improved donor coordination in the tax area, and a concerted EU effort to contribute to the wider OECD agenda on tax transparency, including on transfer pricing, exchange of information, and country-by-country reporting.

The EU also seeks to promote good governance in taxation as an essential element in development cooperation. Ireland is actively supporting these efforts to develop a more transparent, cooperative and fair international tax environment, which we regard as essential to enable developing countries to finance their development, fight poverty and reduce their dependency on aid.

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