The Canadian Extractive Sector Transparency Measures
Act (the ESTMA) was proclaimed into force on June 1, 2015 and
requires businesses involved in the resource exploration and
extractive sector in Canada or elsewhere to file and publish
reports on certain types of payments made to both domestic and
foreign governments. For a discussion of the reporting
obligations under the ESTMA and the types of payments required to
be detailed in the report, please refer to our
February 25, 2015 and
June 1, 2015 Osler Updates.
On March 1, 2016, the Department of Natural Resources (NRCan)
issued its finalized implementation tools for businesses required
to comply with the ESTMA:
Guidance [PDF] on the reporting requirements
under the ESTMA;
Reporting Template in both XLS and PDF formats; and
Contact Form [PDF] for businesses to enrol
with NRCan as reporting entities.
As discussed in our September 9, 2015 Osler Update, NRCan issued
draft versions of these implementation tools for public comment
The one key substantive difference between the draft and final
implementation tools is the requirement to enrol with NRCan as an
'ESTMA Reporting Entity.' Reporting entities must
enrol prior to submitting a report under the ESTMA, although
NRCan is encouraging enrolment by June 30, 2016.
To enrol, a reporting entity must complete and submit to NRCan a
Contact Form which sets out basic information relating the
reporting entity (i.e. its legal name, operating name, business
number, address and dates of its financial year) and the names and
contact information for its primary and alternate contacts.
Following receipt of a completed Contact Form, NRCan will assign to
the reporting entity a unique 'ESTMA ID' which must be
referenced in all future correspondence between NRCan and that
reporting entity, including on the ESTMA report submitted by the
reporting entity to NRCan each year.
The final version of the Guidance also added further
clarification regarding whether payments made to state-owned
enterprises (SOEs) are reportable under the ESTMA. The Guidance
directs reporting entities to examine the facts and circumstances
of payments made to SOEs to determine whether they are reportable;
payments are only reportable if the SOE is exercising or performing
a power, duty or function of government and therefore constitutes a
"payee" under the ESTMA, and not if the SOE is engaging
in a commercial activity. The Guidance indicates that it is less
likely that an SOE operating outside of its home jurisdiction would
be exercising or performing a power, duty or function of
NRCan has also published an information sheet [PDF] on payments made to
Indigenous governments. The requirement to report payments
made to Indigenous governments in Canada under the ESTMA is
deferred until June 1, 2017 and NRCan will continue its engagement
with Indigenous peoples on the implementation of the ESTMA during
this deferral period. The ESTMA requires the disclosure of certain
payments made to Indigenous governments but NRCan has confirmed
that it does not require the disclosure of an impact and benefits
agreement between a reporting entity and an Indigenous government
although payments made under this agreement may be reportable.
Companies subject to the reporting obligations under the ESTMA
should enrol with NRCan to receive timely notifications and updates
from NRCan on the reporting obligations, implementation tools and
substitution determinations, and ensure that they have implemented
proper systems, policies and procedures to track payments to
governments so they are able to complete and file their annual
reports in compliance with the ESTMA.
Entities required to report under the ESTMA should also consider
whether the potentially reportable amounts are in fact being made
to the government or government officials, as in many foreign
countries such a distinction can be difficult to draw. This
distinction is critically important in determining whether the
bribery as well as accurate record keeping provisions of the
Canadian Corruption of Foreign Public Officials Act (see
Osler Update) are implicated by such payments if they are in
fact being made to government officials rather than the
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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