Catherine Olier, Policy Advisor at Oxfam’s EU Office, reflects on a hard-fought victory that will force oil, gas, mining and logging companies to come clean on their finances in the developing world. The European Parliament and EU member states are expected to give their final green light to the agreement in the coming months, bringing EU legislation in line with the US Dodd-Frank Act.

John F. Kennedy could not have been more right when he said, “Victory has a thousand fathers, but defeat is an orphan.”

Last week’s victory – the political deal agreed between EU Member States, the European Parliament and the European Commission to guarantee greater transparency on the activities of extractive and forestry companies – has countless mothers and fathers.

Just over a year ago, when I personally started working on so-called “country-by-country reporting” (the transparency obligation for extractive and forestry companies to disclose in their financial accounts their payments to governments on a country-by-country basis), I had no idea how much impact it could have on poor countries.

Then I listened to voices from Mali, Niger, Ghana, the Democratic Republic of Congo, Zambia, Tanzania, and many other countries, all of whom told us that bigger  transparency in the extractive sector is crucial because:

• We will finally know if companies pay the right amount for the resources they extract, thus contributing to the development of Southern countries and helping to lift people from poverty;
• Citizens and civil society organisations will be able to play their watchdog role and hold their governments to account to ensure funds are properly used;
• Communities affected by extraction projects will be able to claim part of the benefits to increase funding for essential rights like universal access to health and education, and the right to food.

I am proud that Oxfam has engaged in this battle from the early days along with other members of the Publish What You Pay coalition, participating in a more than ten-year old movement for greater transparency. Dedicated decision-makers also carried the project through and helped make it a life-changing reality for many. It is in that sense that this is “a victory of a thousand mothers and fathers”.

By ensuring that the proposal allows no exemption for any company and obliges them to disclose information regarding payments above €100,000 – a sufficiently low threshold for communities affected by extractive projects – this proposal is sending a strong signal that it is time to end the “resource curse” from which developing countries suffer. Of course, the proposal could have gone further by requiring companies to also disclose information about the profits they make in the country and the number of people they employ – to detect possible shifts of profit to tax havens in order to pay less tax. But new debates on tax avoidance against the background of growing public anger against tax dodgers show that this is the obvious next step – one we hope will be made soon.

“Defeat  is  an  orphan” because some extractive  companies, such as Shell,  which  have been fighting   hard  against  this  EU  legislation,  are  now  publicly welcoming  more transparency  and  are  making  a commitment to play the game by disclosing requested  information.  It’s difficult to believe them when you read that several of these oil companies belong to the American Petroleum Institute (API), which is currently suing the US government to block a similar transparency obligation under the Dodd-Frank Act. But I have high hopes that companies will eventually change their mind and drop the suit because as JFK – him again – also said, “change is the law of life. And those who look only to the past or present are certain to miss the future.”