Business Case for Transparency
The VCC strongly supports the transparency of contracts and tax flows. The VCC shares the belief of many stakeholders that transparency is essential so that
a) governments can assess whether their contracts and laws are fair and comparable in terms and benefits to those in other countries with similar endowments;
b) communities and civil society can assess how the risks, benefits and responsibilities are allocated among the various stakeholders, and
c) governments and investors can be held accountable for their commitments.
One of the common concerns of industry representatives is that increased transparency would be harmful for their business. In response, the VCC identified the listed extractive industry companies that disclose tax payments on a country-by-country basis and showed the correlation between this reporting practice with both higher financial performance and fewer reported incidences of human and environmental rights violations in the communities where they operate.
In December 2011, the results related to higher financial performance were submitted to the US Securities & Exchange Commission to inform the regulatory deliberations of the Dodd Frank Wall Street Reform & Consumer Protection Act. A paper presenting the complete findings of the analysis is attached here.