UPDATE 2-Oil traders could face new rules on purchases
* Rules would apply to Swiss, UK-based traders
* Decision on new measures to be made within a year
* NGOs call for strict, global measures on trading
By Emma Farge
GENEVA, April 23 (Reuters) - Oil traders buying from national oil firms could face new disclosure rules within a year if measures designed to crack down on the traditionally opaque realm being discussed by the Extractive Industries Transparency Initiative (EITI) come into force.
Norwegian non-governmental organisation (NGO) EITI, said it had already implemented these rules in Iraq and Norway although this will be its first attempt to bring such transparency measures to oil-rich regions like Africa.
EITI has stakeholders in the public and private sector including major oil traders such as Glencore and oil-producing countries including the United States.
It said the rules would apply to all companies trading with EITI signatories such as Nigeria, where a parliamentary report has recommended an overhaul of the state oil firm due to corruption.
The measures would include media-shy Switzerland-based traders like Vitol and Glencore as well as UK-based traders such as BP even though their host states are not currently implementing the EITI measures.
"The EITI is discussing a number of things and one is the extent to which trading should be covered. This is an area that needs improved governance," said Jonas Moberg, head of the EITI secretariat.
"There are many countries with very extensive allegations of mismanagement, corruption and mispricing of resources."
Talks are still at an early stage and a decision on whether the rules will be optional or part of a minimum requirement for participants will be made within a year, he added.
Major producers among EITI's 35 implementing countries include Iraq and Nigeria, although there are significant omissions such as OPEC members Iran and Angola.
Moberg said that EITI was currently in discussions on membership with other producers such as Libya.
Matthew Parish, partner at Geneva-based law firm Holman Fenwick Willan who advises commodity firms, said that it would be difficult to forge binding global rules for oil sales.
"EITI is simply a Norwegian NGO. Achieving a consensus amongst the EITI members, and then ensuring that consensus is actually implemented, may prove elusive," he said.
Non-governmental groups on Monday called for global measures on transparency for oil trading that go beyond the EITI proposals ahead of a conference in Lausanne, Switzerland this week on commodities trading.
"It is not enough to cover oil trading within the EITI. Home countries have the responsibility to require their companies (to make) such a disclosure," said Oliver Classen, co-author of a new book by Swiss NGO Berne Declaration entitled 'Commodities: Switzerland's Most Dangerous Business'.
The book argues that a lack of regulation and transparency as well as low taxes in Switzerland have attracted trading companies "as a dunghill attracts flies".
A third of the world's oil is traded in Geneva alone, according to the Geneva Trading and Shipping Association.
NGO Revenue Watch's head of governance Alexandra Gillies said that the publication of price, volume and crude oil grade for every oil cargo sold should be a requirement.
It is relatively rare for oil traders like Glencore to buy directly from national oil companies as most exporters prefer to deal directly with refiners. Exceptions include African producers such as Nigeria and Libya.
Nigeria is expected to release the results of its 2012 crude oil term allocations within the next few weeks, with major Switzerland-based traders expected to be top contenders.
- Housing, jobs data weaken, but overall economic picture still upbeat
- Last-minute Obamacare exemption for those with canceled plans
- U.S. diplomats, but not prosecutors, seek to quell India dispute |
- Target cyber breach hits 40 million payment cards at holiday peak |
- New York Mayor-elect's reputation for lateness parodied on Twitter