In 2016, the OECD Development Centre published the report on Corruption in the Extractive Value Chain: Typology of Risks, Mitigation Measures and Incentives, presenting the first evidence-based analysis of patterns of corruption at each segment of the value chain, taking a multi-dimensional approach in order to address both the supply and demand sides. The Corruption Typology noted that the lack of transparency around key commodity trading-related data constitutes a significant corruption risk, also in light of the scale of revenues derived from the sales of publicly-owned commodities. In that regard, the Corruption Typology set out a number of mitigation measures that host governments, home governments and buying companies can take to mitigate corruption risks in the commodity trading sector, including the requirement for companies active in commodity trading to disclose their payments to governments (OECD, 2016[1]).
Following on from the recommendations in the Corruption Typology, and in response to the call received from the 2016 London Anti-Corruption Summit and the high-level mandate received from its Governing Board on 3 October 2017, the OECD Development Centre launched the Thematic Dialogue on Commodity Trading Transparency, with the specific objective of exploring approaches to improving transparency and countering corruption in commodity trading, including paving the way for the possible development of a common global reporting standard (Governing Board of the OECD Development Centre, 2017[2]) (OECD Development Centre, 2017[3]).
This report sets out concrete actions that home and host governments, including their state-owned enterprises, as well as trading hubs, free zones, commodity exchanges and industry associations can take to increase transparency of payments to governments made for the purchase of commodities from state-owned enterprises (SOEs) or other public entities.
This report complements the work on Illicit Financial Flows (IFFs) and Oil Commodity Trading, developed under the auspices of the Anti-Corruption Task Team (ACTT), a subsidiary body of the OECD’s Development Assistance Committee (DAC). The OECD-DAC’s Programme of Work on Illicit Financial Flows and Oil Commodity Trading is undertaken in dialogue with oil-producing African economies, and aligns with the OECD’s high priority afforded to tackling IFFs by focusing on the vulnerabilities to IFFs that arise in the oil sales process. The Programme of Work highlights what OECD members and partners can do to mitigate IFF risks in the commodity trading sector, including through official development assistance (ODA) and in their role as the home or host of the range of markets and enablers that may raise or exacerbate IFF risks.