Andy Flannagan on ethical trading

Andy Flannagan
Andy Flannagan

'The earth is the Lords and the fullness thereof'. These words are written large above the Royal Exchange in the City of London. How I wish more people who work in that square mile would take the time to look up.

The raw materials that were traded through that Exchange, making huge profits for the UK while leaving the colonies penniless have left a lasting stain on our nation and the world. In 2011 we must make sure that history does not repeat itself.

About 3.5 billion people live in countries rich in oil, gas and minerals. Revenue from these sectors are often one of the greatest sources of wealth generated within developing countries, but the irony is that such wealth often provides little benefit to the people living in these countries; especially for those living in poverty. Many states with abundant resources perform less well than their counterparts that are resource poor. Increasing transparency is the key to removing this 'resource curse'.

Many large multi-national oil, gas and mining companies are listed on the London Stock Exchange (LSE) - about 86. There are several others listed on stock exchanges elsewhere in Europe. The companies registered on the LSE pay large sums of money to resource-rich countries for the sale of oil, gas and minerals, which could serve as a basis for development and poverty reduction.

The problem is that money talks. In countries where money is scarce, it screams very loud indeed. Companies often turn a half-blind eye in the midst of procurement processes, effectively buying off swathes of government departments and civil servants. Nigeria is a prime example, where the actions of Shell in connection with the Government there are well-documented.

Companies should be made to report a basic set of accounts on a country-by-country and project-by-project basis. This increased transparency will make companies and governments more accountable to citizens and makes it more likely that proceeds from minerals, oil and gas will actually go towards development.

In the UK and at the European Parliament, we want to see legislation passed requiring oil, gas and mining companies to report key financial information for each country they operate in and for each project that they are working on.

The European Union is already discussing a proposal for this legislation. It is essential that the UK Government supports the strongest possible proposal when it is discussed at the Council of Ministers later this year and as it goes through the European Parliament. The Chancellor of the Exchequer, George Osborne, has already expressed the UK's support for legislation at the EU level.

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'What you have said in the dark will be heard in the daylight, and what you have whispered in the ear in the inner rooms will be proclaimed from the roofs.' Luke 12:3 CR

The opinions expressed in this article are not necessarily those held by Cross Rhythms. Any expressed views were accurate at the time of publishing but may or may not reflect the views of the individuals concerned at a later date.