Isometrix has recently attended the PDAC convention in Toronto and learnt more on Canada’s Extractive Sector Transparency Measures Act which came into force on June 1st, 2015. The Act requires extractive companies, subject to Canadian law, to publish annual reports on certain payments made, to all levels of government in Canada and abroad, of $100,000 or more. Here is a brief overview of this new obligation for the Canadian extractive sector.
The Extractive Sector Transparency Measures Act (ESTMA or the Act) came into force on June 1, 2015. The Act introduces new reporting and transparency obligations for the Canadian extractive sector and contributes to global efforts against corruption in the sector.
Canada’s requirements are broadly aligned with those in the European Union (EU) (Transparency and Accounting Directives) and the United States (Provision 1504 of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act) in an effort to ensure a level playing field for Canada’s extractive sector.
Map of the perceived risk of bribery and corruption in countries in which the Extractive industry operates
Who needs to report?
Determine if you are a Reporting Entity by using the following flow chart:
What needs to be reported?
Reportable payments to a payee must relate to the commercial development of oil, gas or minerals and total at least C$100,000 in one of these payment categories:
- Taxes (other than consumption and personal income).
- Fees (including rental fees, entry fees and regulatory charges, as well as fees or other consideration for licences, permits or concessions).Production entitlements.
- Bonuses (including signature, discovery and production bonuses).
- Dividends (other than dividends paid to payees as ordinary shareholders).
- Infrastructure improvement payments.
What is a payee?
- Any government* in Canada or abroad.
- A body established by two or more governments.
- Any trust, board, commission, corporation, body or authority that exercises a function, power or duty of any government in Canada or abroad.
When do you report?
Reporting Entities must report on payments made during financial years beginning after June 1, 2015. They are required to publish their report within 150 days following the end of their financial year.
How do you enroll and submit a report?
Reporting Entities must enroll with Natural Resources Canada (NRCan) prior to submitting their annual report. NRCan encourages enrolment before June 30, 2016. Consult the Technical Reporting Specifications and Guidance available on the NRCan website for further information on reporting. Other reporting templates are available on the NRCan website.
IsoMetrix and ESTMA
Metrix Software Solutions is a leading South African based supplier of integrated Governance, Risk and Compliance management software. IsoMetrix is an agile application, thus its business model is to customise its solution to match its client processes and procedures. ESTMA is applicable through IsoMetrix Compliance Management solution. Isometrix has a global footprint with more than 60,000 users.
Source – https://www.nrcan.gc.ca/estma