ECR MEPs today welcomed new rules to improve transparency and crack down on exploitation through the financial reporting process for companies running mining and other extraction operations abroad.

ECR MEPs today welcomed new rules to improve transparency and crack down on exploitation through the financial reporting process for companies running mining and other extraction operations abroad.

The rules were approved in a vote by the European Parliament sitting in Strasbourg.

The Accounting Directive will contain new requirements for financial statements by mining, drilling and logging companies. “Country by country reporting”, as it is termed, will mirror rules in the United States obliging companies operating in third countries to report any payments they make to governments relating to their overseas projects.

As Conservative negotiator on the legislation, Sajjad Karim MEP was successful in maintaining several sections of previous directives of importance to certain member states, in particular the alternative balance-sheet format commonly used by UK companies.

He is pleased that in line with objectives of reducing administrative burdens on business, the rules will apply on a sliding scale. Micro-enterprises will be excluded entirely and SMEs will benefit from lighter rules, particularly over notes attached to financial statements.

Mr Karim, MEP for North West England and Conservative spokesman on legal affairs, said: “Through detailed and rigorous negotiation of this directive, we have come up with an important tool for flushing out bribery, corruption and backhanders – but without making life impossible by over-regulating small businesses.

“The little man will not lose out, but corrupt officials, slush-fund managers and bent businesses will find life less cosy.”

However Mr Karim was critical of UKIP MEPs who opposed the measures and whose poor attendance figures were highlighted in the media recently.

He said: “I seriously question their judgment in today’s vote. Their lack of participation at the EU negotiating table is detrimental for British interests and British businesses.”