* 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 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
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
"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.