Natural Resources and Violent Conflict - WaterWiki.net

who gets the money? 45Reporting by Host GovernmentsHost countries receive revenue from resource extraction and exports ina number of ways. The most important of these usually are paymentsby private extraction companies, including taxes, royalties, and one-offor periodic payments, such as licensing or concession fees, signaturebonuses, and other bonuses related to a particular stage in a project.The following are examples of payments that international companiesmake to host governments in the oil and gas sectors:• Payments to central and federal governments, such as ministriesof finance, the revenue authority, and the central bank, includingtaxes, royalties, dividends, signature bonuses, and profit share• Payments to regional and local governments, including developmentfunds and regional taxes• Payments to other government agencies, including customs duties,fines (for example, to environmental agencies for spills and emissions),costs for studies (payable to government institutes or laboratories), andport fees• Payments to state companies, including tariffs to pipeline monopolies;payments to utilities, railway, and air transport state monopolies;and drilling contracts• Payments in kind (barrels of oil equivalent) for royalty, profit,and equity share• Payments for the acquisition of shares in state companies, for example,through government privatization, including the purchase ofbonds issued by state companies• Payments related to joint ventures with state oil companies, includingprofit and dividend payments to the state company (includingmoney remitted from ventures executed in other countries) and contributionsfor capital expenditures.Other revenue flows can be provided via state-owned resource extractioncompanies, which may be partners in joint ventures with foreignfirms, especially in the oil and mining sectors. Joint venture projects canimply income for the government that is not derived from payments byprivate or foreign companies.Reporting Procedures in OECD Countries. Revenue reportingprocedures are generally well documented and transparent in countriesof the Organisation for Economic Co-operation and Development(OECD). For example, a recent, publicly available review by the UnitedKingdom’s National Audit Office notes, “There are clear reporting linesthrough which the U.K. Oil Taxation Office provides Inland Revenuesenior management with regular accounts of progress against targets”