THE UNDESIRABLE STANDARD FOR ACCOUNTING AND EXTRA-FINANCIAL INFORMATION SPECIFIC TO EXTRACTIVE ACTIVITIES

Abstract

This article traces the difficulties encountered in market economies as different attempts have been made to develop accounting standards specific to the extractive sector. In no case did the standard setter achieve the level of transparency and comparability sought. The article traces, in chronological order, the conditions of emergence of South African, Australian, Canadian, American and international standards. For more than a century, attempts to produce an accounting standard specific to extractive activities have fuelled a thorny debate. Born in mineral-producing countries as a means of solving agency problems and optimizing cash flows from mines, the specific standard concerns the accounting of expenses incurred in the pre-exploitation period and the evaluation of reserves. It remains focused on purely financial issues. The American standard is being considered by Congress in response to the uncertainties produced by the oil crisis, while the Australian standard is being set up as a bulwark against speculative bubbles in the commodity markets. The international standard was initially converging on the American standard but suffered repeated failures. It finally perpetuated a standard that was initially designed to be temporary and focused on upstream activities. The first specific sustainability standards are being considered in Europe, with the Corporate Sustainability Reporting Directive and the European Sustainability Reporting Standards. A specific standard that was under discussion at the time of the production of the Omnibus Directive caused the project to fail in February 2025. After a century of attempted harmonization, therefore, nothing meaningful has been achieved. The extent of the transformation of the sector and the power of the forces involved have ensured that operational measures have not been introduced to reflect the desire to extend disclosure obligations to sustainability information for stakeholders.