I was excited to see today that Canadian industry associations representing the world’s largest mining companies have endorsed regulations requiring fully public disclosure of companies’s payments to governments for all extractive projects. According to recommendations released today, mandatory disclosure is good for business, investors, and society. This could be a strong blow to the oil industry, which is waging a costly legal battle against similar regulations in the U.S. based on arguments that the Canadian recommendations resoundingly reject.

Big Oil’s silence in Canada on revenue transparency is a stunning contrast to its behavior here in the United States. The American Petroleum Institute (API) has insisted to the SEC and to the D.C. federal courts that mandatory disclosure would cost extractive companies billions, undercut their competitive edge, force them to flout host country laws, and violate their First Amendment free speech rights. None of these arguments actually stands up to scrutiny, but API’s legal delay tactics have halted the roll-out of disclosure rules and forced the SEC to go back to the drawing board.

In Canada, by contrast, the oil industry chose to sit on the sidelines as civil society groups and the mining industry formed a collaborative Working Group to bring Canada in line with global momentum on transparency in the extractive industries. And the results are telling: the Working Group’s recommendations directly contradict the oil companies’ central arguments against transparency. For example, the Working Group explains that full public disclosure creates a more stable business environment for extractive companies, and debunks the myth that payment disclosures would contain commercially sensitive information. It points out the ways that investors can use detailed payment information to help them better calculate the riskiness of their investments, and shows that major extractive companies have created value for their shareholders through transparency. And it recognizes that for disclosures to be useful and to create a level playing field, the rules must cover all countries, with no exemptions.

So, what’s next? Prime Minister Harper has pledged his government to adopt mandatory disclosure regulations, so the work should begin soon to transpose these recommendations into law across all of Canada’s provinces.

As for the United States, the SEC will proceed – as it must, according to law – to enact new rules requiring publicly listed extractive companies to disclose their government payments. The oil industry will presumably raise the same old arguments in opposition, but this time, they’ll be facing a formidable new barrier: the need to explain why their mining colleagues just north of the border are actually demanding precisely the rules Big Oil is so dead set against.

UPDATE

It looks as if the oil industry is struggling to respond to the decision of Canada’s mining associations to support mandatory public reporting of government revenues from extractive projects. The Canadian Association of Petroleum Producers (CAPP) was just quoted as saying they can support mandatory project-level disclosures, as long as there’s flexibility in the project definition. This is directly contrary to what the API said in the U.S. Not only did Big Oil oppose all public, project-level reporting, it actually objected to the flexibility for defining projects that the SEC built into its original set of rules.

CAPP’s membership includes subsidiaries of all the major oil producers who also constitute API — ExxonMobil, Chevron, Shell, and more. How can it be that these companies claim to fear catastrophic harm if they have to publish their payments when they’re talking to the U.S. federal courts, but they think it’s just fine in Canada?