By Stella Dawson
"I have truly embraced the inner nerd,” said rock star and anti-poverty campaigner Bono at a TED talk this week.
Taking off his trademark sunglasses, Bono declared himself a “factivist” who has been infected by the database virus, which offers people tools to unlock the factors holding them in extreme poverty.
Bono’s embrace of data is another sign that the data transparency movement has won its basic argument – that the release of more financial information to the public by governments and companies increases accountability, reduces corruption, builds citizens’ trust and, ultimately, decreases poverty.
And the movement made further headway this week on its campaign for even more detailed data to be released.
The Extractive Industry Transparency Initiative’s board agreed in principle to require governments to break down the revenues from oil, gas and mining companies by project if they want to win the EITI seal of approval, said several participants at a meeting in Oslo this week.
Project detail allows a community rich in natural resources to monitor where the revenues from resource extraction are spent and whether promised community development is delivered as a way to break the cycle of corruption and poverty. An estimated 3.5 billion people live in resource-rich countries, yet many are poor. No immediate details of the board decision were available, and first it must be adopted by the EITI at its May summit.
The move would bring the EITI, as the global standard setter, in line with the high standard set by the United States in its landmark decision last year to require detailed project breakdown for the oil, gas and mining industries, although this faces a legal challenge from a sector of American business.
But the momentum for more detailed disclosure is clearly there. The European Union is expected to adopt similar extractive industry legislation in coming months and is adding the timber industry to the list.
And it’s not only the extractive industries. In a similar vein, governments are agreeing to share lots more tax data, making it harder and harder to hide assets in another country. Following the money is a way officials can capture drug traders, human traffickers, terrorists, arms dealers and kleptocrats who impoverish countries.
The U.S. Treasury is working with over 50 countries to strike agreements on sharing financial data about their citizens as it implements the Foreign Account Tax Compliance Act by 2014. It is part of a worldwide effort to crack down on tax evasion.
The banking industry is also under scrutiny. European Union officials late on Wednesday reached agreement on legislation that would require banks to disclose profits and taxes broken down country-by-country by 2014. This type of detail of a bank’s financial profile would make it much harder to shift profits from a high-tax jurisdiction to a low tax one and avoid paying taxes. The measure still needs final approval by EU leaders.
Raymond Baker, director of the watchdog Global Financial Integrity, called it a major victory.
“Disclosing this information will make it much more difficult for financial institutions to artificially shift their profits to low and no tax countries and dodge taxes, at a time when rich and poor nations alike are struggling to collect enough revenue,” he said, urging a similar step for U.S. banks.
An even more sweeping piece of legislation was introduced this month into the U.S. Senate. Carl Levin, a Democrat from Michigan, and Sheldon Whitehouse, a Democrat from Rhode Island, have proposed that all multinational companies provide a country-by-country breakdown of their revenues, tax payments and employees. The bill would close a swathe of tax loopholes by tightening up on tax havens and cracking down on companies transferring profits offshore, which the U.S. Joint Committee on Taxation estimates could net the U.S. $189 billion.
These measures rarely make big headlines, but they matter. Daniel Kaufman, president of Revenue Watch, estimates there is a 300 percent development dividend from improving governance and controlling corruption and that releasing detailed data to measure performance is a vital part of achieving that.
Or as Bono said: "Forget the rock opera, forget the bombast, my usual tricks. The only thing singing today will be the facts."
Click here to see the TED talk in full