UK-Listed Mining Companies

Robin Walker Excerpts

Wednesday 28th November 2012 Westminster Hall

[Mr Robin Walker (Worcester) (Con)]

It is a pleasure to follow the hon. Member for Hayes and Harlington (John McDonnell), who raises some serious concerns about London-listed companies, and to speak in this debate. The hon. Member for Falkirk (Eric Joyce) gave an excellent introduction and spoke about the importance of overseas issues. Like my hon. Friend the Member for Hexham (Guy Opperman), I refer hon. Members to my entry in the Register of Members’ Financial Interests, and in particular to the fact that before I came to this House, I advised a number of international mining companies on their financial communications. I no longer have any such financial relationship although, like my hon. Friend, I own a very small number of shares in the company BHP Billiton. I also want to mention a constituency interest: a mining supplies and parts business called Joy Mining Machinery, which employs a number of people and supplies mining companies around the world, including UK Coal. I appreciate the concerns about that that my hon. Friend raised, and I shall point them out to the company in my constituency.

The hon. Member for Falkirk is, like me, a member of the all-party trade out of poverty group, and he pointed out that the work of London-listed mining companies in developing countries can help with that, as long as governance is good and clear regimes are in place to ensure that royalties are paid. There are several countries where that has happened, such as Chile, Botswana and, from time to time, Zambia, and there have been substantial benefits. Good governance and transparency are vital. The hon. Gentleman also brought up two initiatives, which, I think, started in London: the extractive industries transparency initiative, and the International Council on Mining and Metals. Both were supported in their beginnings by the UK, and UK-listed companies have played an important part in setting them up. It is a great shame that although the EITI is embraced by countries around the world—even the likes of the Democratic Republic of the Congo are looking to sign up to it—this country is not yet a signatory. I encourage the Minister to consider whether the UK can become a signatory to the EITI, because that would encourage every listed UK company to maintain the degree of transparency that we would expect about where payments go in the countries where they operate. It would also send a powerful message to other countries that we might wish to encourage to join. They would include countries such as Brazil that have arrived on the international economic scene and consider themselves as no longer developing countries but developed countries, as well as other developed countries. Norway has signed up, as the UK should.

Most of the mining companies that I dealt with in my career understood that corporate social responsibility was crucial to their licence to operate, and most would embrace improved UK listing requirements. Indeed, in my previous career, I heard concerns that the listing requirements in Hong Kong are, in theory, tighter than those in the UK. For the sake of our international competitiveness, we should ensure that ours are just as strong.

We have heard much about the amount of tax paid by international companies. Of course it is right that companies operating elsewhere in the world and listed in the UK should pay most of their tax in the jurisdictions where they operate, especially when that can help a developing country. However, I will be interested to know whether the UK Government or the Treasury have ever carried out an analysis of the benefits to the UK economy and taxpayer of having so many international companies listed in London, and therefore employing people at headquarters for investor relations and as consultants in the London market. Such a piece of work would be interesting.

Wherever mining companies operate, they need to balance the environmental and social concerns that are rightly raised by many UK NGOs with the benefit that can be brought through employment and investment in infrastructure. One aspect of the debate that we should consider is the fact that it is not only UK-listed mining companies that carry out work in developing parts of the world—with the potential to do good or damage. We have enormous competition, not just from other areas of the world where companies are publicly listed, but from the likes of China, which are investing huge amounts in projects and may not necessarily hold businesses to account as we would like on the way in which they benefit the economies in question. We should champion greater transparency and more listing of international companies in London so that we can ensure that they are held to account. A challenge for this country is to ensure that the whole industry understands the importance of acting responsibly and the benefits of greater transparency, and for the UK to show that the EITI, which we helped to launch, is not just for developing economies, but something to be embraced across the board by all economies.

The hon. Member for Falkirk pointed out that, in the developing world, mining can encourage development. We should examine the UK’s position as a leading destination for listings and see how we can take the most advantage from that to encourage best practice in the industry and responsible development around the world.