Payments to Governments Report 2021
Through our activities as one of the world’s largest resource companies we are present at multiple stages of the commodity supply chain. We are supporting the governments of our host countries in realising value from their natural resources, in line with our purpose, to responsibly source the commodities that advance everyday life.
Today, we published our Payments to Governments Report 2021, aligned with the reporting requirements of Chapter 10 of the EU Accounting Directive. It provides details on the funds paid in the form of taxes, royalties and other levies that can be used by our host governments to finance public services, infrastructure and to invest in initiatives that improve the quality of life for the population.
The report also includes information, for those countries compliant with the Extractive Industries Transparency Initiative (EITI), on commodity trading payments to state-owned enterprises for oil, gas, metals and minerals.
Our commitment to fiscal transparency
We are strongly supportive of fiscal transparency, recognising the role it plays in encouraging the responsible management of revenues from extractive activities.
- We recognise the importance of company ownership information being publicly available. We provide beneficial ownership information on our operating joint ventures across our industrial business.
- In September 2021, along with four other mining companies, we became a signatory to a statement by companies on beneficial ownership transparency.
- We have also for the first time publicly disclosed details of our active marketing sales/purchase agents .
- Since 2019, we have publicly stated our commitment towards supporting and encouraging the disclosure of mining and exploration contracts with host governments. We believe this type of contract transparency can support building trust and ensuring accountability in the sector.
- We welcome the EITI Standard’s approach for contract transparency for EITI-compliant countries. Similarly, as a member of the International Council of Mining and Metals (ICMM), we support its Transparency of Mineral Revenues Position Statement, which includes a commitment to contract transparency.
- With increasing stakeholder interest in material loans repayable with product (also referred to as ‘resourcebacked loans’) we have disclosed relevant information on our resource backed loans, to the extent that the information is not commercially sensitive or confidential.
Our 2021 payments
During 2021, our total payments to governments were around US$7.6 billion. Approximately $4bn are reported pursuant to the EU Accounting Directive extractive industries’ reporting requirements. The difference arises from payments related to refining, processing, marketing and trading, as these are not in the scope of the EU Accounting Directive. This marks a significant increase on the US$5.8 billion and US$2.1 billion under the EU reporting requirements paid in 2020, reflecting the global economy’s recovery from the impact of Covid-19.
Our global effective tax rate, when adjusting for significant items (primarily impairments, foreign exchanges adjustments and tax losses not recognised), was 33.5% (29.7% in 2020 and 30.5% in 2019).
Our contribution to host countries goes beyond the taxes and royalties we pay. During 2021 we paid US$6 billion in wages and benefits for the 135,000 people working for Glencore (including contractors) and US$68 million on initiatives that benefit the communities living around our operations.
We are committed to operating ethically and responsibly in all aspects of our business and determined to foster a culture of integrity, inclusivity and transparency. This commitment includes implementing high standards of corporate governance and transparency.