Udviklingspolitisk direktør Ib Petersens tale på Ibis-konference om udvindingsindustrien den                              ...
But before I leave the floor to the key speakers of the conference, I would liketo comment briefly on the main issues to b...
Ingerslev from the Danish Commerce and Companies Agency [Erhvervs- ogSelskabsstyrelsen] will tell you more about the actio...
I should like to mention a few other initiatives. The Danish government lastyear launched a strategy on “The international...
Regarding the possibilities for mobilizing resources from extractive industriesin developing countries – in other words, u...
Generous tax holidays for extractive industries offered to attract them in thefirst place and a lack of expertise in devel...
discrepancies and outstanding payments totaled more than $ 5 billion forrevenues generated by the oil and gas sector in Ni...
Africa, Asia and Latin America. Denmark has also supported national taxadministration in several countries, for instance i...
statement, the G20 stands ready to use countermeasures against tax havens fromMarch 2010. These are welcome steps, taking ...
governments of developing countries to seek membership and exploit thebenefits of this in the future.[Afsluttende bemærkni...
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Opening by Ib Petersen, State Secretary for Development Policy, Danida .

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Opening by Ib Petersen, State Secretary for Development Policy, Danida .

  1. 1. Udviklingspolitisk direktør Ib Petersens tale på Ibis-konference om udvindingsindustrien den 23. oktober 2009.Let me start off by welcoming you all to Eigtveds Pakhus for this conference. Itis indeed a pleasure to see so many present here. I should also like to thank thelead organizers of today’s conference, Ibis, for inviting me to make someopening remarks.Today we focus on the Extractive Industries, but I would actually like to startby highlighting the subtitles on the programme: “Unleashing EconomicPotentials - Respecting People and the Environment”. In times like ours, wheredeveloping countries are particularly hard hit by an unprecedented globaleconomic crisis, and by the impact of climate changes on the environment, Icertainly subscribe to an approach focusing not on the problems but on thepotentials.There is no doubt that the issue for today’s discussions raises important but alsovery complex questions. Developing countries and their partners face a lot ofchallenges in trying to solve these questions. The aim of your efforts here todaywill be to come up with recommendations for how to turn these challenges in toopportunities. 1
  2. 2. But before I leave the floor to the key speakers of the conference, I would liketo comment briefly on the main issues to be debated.[Protection of human rights and the environment:]Denmark has a long standing tradition as a responsible nation with responsiblecompanies that treat employees decently and respect human rights as well as theenvironment. Denmark has made a determined effort internationally to promoterespect for human rights, the rights of employees, the protection of health andenvironment, as well as the fight against corruption. Bilaterally, we havepromoted human rights, decent working environment for employees throughgood governance initiatives, business sector programmes and other initiatives inour partner countries. These efforts have indeed been based on our basic valuesand our long term political priorities and political interests.As a more recent example, let me mention that last year in May 2008 theDanish government presented its Action Plan for Corporate SocialResponsibility (CSR). The action plan aims at promoting CSR andstrengthening the efforts to ensure that Denmark and Danish businesses aregenerally associated with responsible growth. I expect that Mr. Carsten 2
  3. 3. Ingerslev from the Danish Commerce and Companies Agency [Erhvervs- ogSelskabsstyrelsen] will tell you more about the action plan later today.Clear and transparent international rules and principles are important in order toensure that companies operate on equal terms. Our point of departure is clear. Itis a state responsibility to protect human rights. And it is a state responsibilityto set environmental policies and regulatory frameworks in place to cater for asustainable development. But private business itself has responsibilities as well.In this respect, the United Nations Global Compact initiative and the 10universally accepted principles in the areas of human rights, labour,environment and anti-corruption, play a crucial role. They have indeedstimulated interest in CSR in recent years. In June this year the Ministry ofForeign Affairs together with UNDP published a booklet with ten Danish casestories on human rights, labor standards, environment and anti-corruption ininternational business activities. By showing how Global Compact works inpractice for a number of Danish companies, we hope to inspire companiesworldwide to take action on these issues. This strategic policy initiative and theten principles are also relevant for businesses in the extractive industries. 3
  4. 4. I should like to mention a few other initiatives. The Danish government lastyear launched a strategy on “The international human rights cooperation”. Withthis strategy, the government pledges to ensure that the promotion andprotection of human rights is mainstreamed into all foreign policy anddevelopment policy areas and activities. Within the EU, Denmark has alsoplayed an active role in bringing about a common EU position on CSR.And finally, Denmark politically and financially supports the mandate and thework of the “Special Representative on the issue of human rights andtransnational corporation and other business enterprises”, John Ruggie. Welook forward to the Special Representative’s development of a set of guidingprinciples for states and businesses, applicable in all sectors and all regions.This will be of great value to all stakeholders, but most importantly to privatecompanies.[Extractive industries – unleashing the economic potentials, mobilisingrevenues and combating tax evasion]: 4
  5. 5. Regarding the possibilities for mobilizing resources from extractive industriesin developing countries – in other words, unleashing the economic potentials inextractive industries – I think today’s discussion has a perfect timing.Internationally, there is indeed an increasing focus on what is normally calleddomestic resource mobilization. Sustainable development is only possible ifdomestic resource mobilization can be increased and sustained. It is a questionof both broadening the tax base, basically by attracting investments and creatingjobs, and of building up national institutional capacities for formulating andimplementing relevant tax regimes.There is no doubt that the extractive industry is a significant potential sourceof income and revenue for many developing countries. More than three and ahalf billion people live in countries rich in oil, gas and minerals. The potentialfor stimulating growth and reducing poverty in developing countries with taxrevenues and royalties from natural resources like oil, gas and minerals, is huge.Yet, many of these developing countries do not today obtain more than a smallfraction of the taxes and royalties which they could have received in the best ofall situations. 5
  6. 6. Generous tax holidays for extractive industries offered to attract them in thefirst place and a lack of expertise in developing countries for negotiating morefavorable deals for the countries concerned seem to be the main reason for thisstate of affairs. But the lack of transparency often surrounding these deals andoperations also serve to hide illicit transaction with revenue being directed toprivate accounts rather than to the state treasury.Obviously, and almost by definition, it is difficult to get exact data on theprecise amount of illicit financial flows associated with the extractive industry.However, in 2007 the Stolen Asset Recovery (StAR) Initiative, launched by theUN and the World Bank, estimated the cross-border flow of the global proceedsfrom criminal activities, corruption and tax evasion to be between $1 trillionand $1.6 trillion per year. According to a report published in December 2008 byGlobal Financial Integrity in Washington, illicit financial flows out ofdeveloping countries are estimated at some $850 billion to $1 trillion per year.There are no exact data concerning extractive industries as such in this context.However, it seems that significant problems do exist in extractive industries aswell. For instance, according to a report published in August this year by theNigeria Extractive Industries Transparency Initiative (NEITI), financial 6
  7. 7. discrepancies and outstanding payments totaled more than $ 5 billion forrevenues generated by the oil and gas sector in Nigeria in 2005. This is anenormous amount of money that could have brought better education and healthor other essential services to a large number of people.At the same time, I should indeed like to caution against jumping to quick butinaccurate conclusions on the behavior of a whole industry. Being in theextractive industries in developing countries certainly does not automaticallyimply that companies engage in illegal activities, nor does it imply that acompany is involved in systematic illicit financial transactions, criminalconduct or illegal tax evasion. There are plenty of examples and experiences ofmining companies living up to their corporate social responsibility. And thesesexperiences of course form an important input to today’s discussion.As already mentioned, a very significant part of the solution to the problemsconcerning tax evasion in developing countries is capacity building and goodgovernance. Capacity building and support to good governance are importantelements in the bilateral cooperation between Denmark and our partners in 7
  8. 8. Africa, Asia and Latin America. Denmark has also supported national taxadministration in several countries, for instance in Tanzania and Mozambique.However, the solution to tax evasion is indeed also to be found outside thedeveloping countries, that is, in the developed countries. And here we seeprogress being made. Bilaterally, Denmark has recently concluded agreementsconcerning exchange of information with a number of countries [Schweiz,Østrig, Luxembourg og Singapore]. Work is in progress at multilateral levels,especially between the Nordic countries and within the EU and between theOECD countries. And as you probably are aware, the Group of Twenty [G20]recently confirmed their commitment to fight so-called non-cooperativejurisdictions.According to the G20 statement from Pittsburgh in September this year, theparticipants are committed to maintain the momentum in dealing with taxhavens, money laundering, proceeds of corruption. G20 welcomed theexpansion of the Global Forum on Transparency and Exchange of Information– including the participation of developing countries – and welcome theagreement to deliver an effective program of peer review. According to the G20 8
  9. 9. statement, the G20 stands ready to use countermeasures against tax havens fromMarch 2010. These are welcome steps, taking their political significance fromthe fact that G20 encompasses both developed and developing economies.I am sure that Steen Lohmann Poulsen from the Ministry of Finance will tellyou about the Danish measures in relation to taxation and financial marketslater today in the afternoon.Transparency is the key to accountable government, and to the mobilization ofresources for sustainable growth. Therefore, the Extractive IndustriesTransparency Initiative (EITI) is an important initiative promoting thefundamental interests of developing countries in this respect. The EITI sets aglobal standard for managing revenues from natural resources and aims tostrengthen governance by improving transparency and accountability in andaround the extractive industry. In addition, EITI helps improve the internationalcredibility by enabling governments to affirm their commitment to fightcorruption. Denmark supports that developing countries seek membership ofEITI, and in this respect it is important that the IMF and the World Bank aswell as a number of other donors including Denmark encourage the 9
  10. 10. governments of developing countries to seek membership and exploit thebenefits of this in the future.[Afsluttende bemærkninger]Finally, let me go back to my initial remarks and emphasize that the challengesfacing developing countries are many and difficult, especially after the globalfinancial crisis. Therefore, it is as important as ever to assist these countriesthrough effective international solutions. This also applies to the challengesrelated to ensuring that the extractive industrial sector in developing countriesplay its part in fighting poverty, by unleashing economic potentials andrespecting people and the environment.Thank you. 10

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