The Publish What You Pay coalition and others met in a large scale private meeting with the International Accounting Standards Board, investors in the extractive industries sector and representative companies working in that industry yesterday. The meeting was private. All comments were made unattributably. But I do feel able to comment. I was PWYP's technical lead.
The mood of investors present was unambiguous: they want country by country data, and most want it on revenues, costs, profit, taxes and other benefits paid to individual governments. Most thought an IFRS the only possible delivery mechanism. Few present sought to disagree.
The EI companies represented saw reasons for not supplying data: candidly I think we dealt with all the issues without difficulty. One industry representative ended up concluding that the data we are asking for could be supplied at relatively small cost given enough notice of the change. Of course I wanted to believe that commentator. I also happen to believe their comment accurate.
Some present, whether from civil society or the investor community were shocked when it was made plain that many subsidiaries of at least some of the companies present were never subject to audit inspection. One investor, shocked by this, made clear that by acting in this way the companies in question were transferring risk to the shareholder without their knowledge. She clearly felt our demand would not just provide new information, it would increase the quality of the consolidated data already reported. She had no doubt about the benefit of that for investors everywhere.
The claim by one party that to audit country by country tax information would increase audit and reporting costs by at least 25% was treated with some incredulity: if such limited additional information would cost so much how little data was being validated now was the obvious, and somewhat shocked response of some I spoke to.
But perhaps most interesting was the comment to me from a senior representative of the profession present. He was categoric to me: we have shattered forever the previously accepted belief that regional data is either useful for the purposes of investment appraisal or analysis of this sector.
Now we have to see how matters progress: this is for from being a closed case as yet. There is still a long way to go to agree on what needs to be disclosed on a country by country basis and whether, as we and the investors present argued, all countries must be disclosed for fear of what transpires to be material information being lost in aggregation.
But in a very small way I think the world of accounting changed yesterday. The fact that there is risk in multinational corporations that can only be properly appraised if data is reported on a country by country basis has, I think, been clearly recognised. That's a massive step forward.