Disclosed payment flows 2024

Participating companies

In accordance with the MSG requirements (see also “Selection of companies”), the Independent Administrator has identified 40 companies or corporate groups. Of these, a total of 17 companies or corporate groups took part in the 2024 reporting process.

An assessment or evaluation of the number of participating companies or corporate groups should take into account that

• a coverage of more than 94% in terms of lignite, natural gas, crude oil, potash and salt production was achieved. This is a positive development.
• after the expiry of the deadlines for the publication of the payment reports for the period from 1 January 2024 to 31 December 2024, the number of payment reports actually published falls short of the number of companies or corporate groups identified. All payment reports submitted by companies in accordance with Sections 341 q et seq. HGB are publicly available and can be viewed in the Company Register.¹

In preparing the first D-EITI report, the MSG discussed naming the identified companies that did not participate in the reporting, on the initiative of civil society. In view of the public visibility of the payment reports and the legal concerns raised by the government side against naming these companies, the MSG has refrained from naming the non-participating companies also for the present D-EITI reporting, in line with the previous D-EITI reporting. The legal concerns raised by the government against naming the companies are set out below:

On the one hand, data protection law applies in cases where the company name allows conclusions to be drawn about a specific natural person, such as the name of sole traders (possibly with further information such as the registered office). This is the case for at least two companies that have not reported under D-EITI, so for reasons of data protection, they should not be named.

On the other hand, it is a concern that the publication of the company names in the D-EITI reporting without a sufficient legal basis could interfere with the fundamental right of companies to freely practice their profession (Art. 12 GG). There is no legal obligation to mention the company names.

The protection offered by Art. 12 GG is, inter alia, the freedom to conduct a business for profit. The publication of the company names in the D-EITI reporting would interfere with the protection as an act of industry control by the state. Indeed, the publication of all the names of the companies which did not take part in the comparison could have a certain pillory effect, which could lead to companies feeling in fact compelled to agree to the comparison. This problem is exacerbated by the fact that the data to be transmitted by companies (payment flows such as corporate tax, mine site and extraction royalties, sometimes trade tax) are trade, business and tax secrets.

Nor would it be legally justifiable to mention the name in view of the decisions of the Federal Constitutional Court (BVerfG) in the glycol² or scientology³ cases. In these cases, the Federal Constitutional Court has indeed ruled that the Federal Government can fulfil its warning and information obligations even without a legal basis, in particular if, as in the glycol case, there are interests worthy of protection on the part of consumers that speak in favour of a warning (consumer health). However, there is no comparable interest in the case of companies not reporting under D-EITI. As a result, such a presentation is therefore also omitted for the present reporting.

In Germany, a company extracting natural resources with a majority state participation, Südwestdeutsche Salzwerke AG, has been identified. According to its 2024 annual report, the City of Heilbronn and the State of Baden-Württemberg respectively have a total of 93.11% of the voting rights in this company (see the 2024 annual report, p. 178). The dividend paid in 2024 for the previous financial year was EUR 17,337,375.00, corresponding to EUR 1.65 per share (see the 2024 annual report, p. 145). The subscribed capital amounts to EUR 27,000,000.00 and is divided into 10,507,500 no-par-value shares (see the 2024 annual report, p. 161).

The 2024 annual report, including the audit report on the consolidated financial statements and the group management report, is available on the company’s website (see Geschaeftsbericht_2024_save_final.pdf)

In addition, comprehensive information on corporate governance, including a corporate governance statement, a declaration of compliance with the German Corporate Governance Code (DCGK) or a code of conduct for employees and suppliers, is published (see https://www.salzwerke.de/de/investor-relations/corporate-governance.html)

State participation in companies extracting natural resources is subject to additional requirements under EITI standards 2.6, 4.5 and 6.2.⁴ According to the MSG, the requirements are adequately taken into account by the above explanations.

Breakdown by sector

Coverage of the sectors

Depending on the natural resource, the extractive sector in Germany differs significantly in terms of the number of companies and the number of people working. The coal mining and crude oil and natural gas extraction sectors are dominated by a small number of large companies. On the other hand, the quarried natural resources sector is characterised by a structural mix of a few large and a high proportion of small and medium-sized companies. In the 2024 reporting year, there were several thousand such companies in Germany, for example local gravel plants. Due to their size, many of these actors are not subject to the legal obligation to produce payment reports. As a result, they are also not taken into account by the identification criteria for the D-EITI reporting.

The following overview shows how the coverage of the individual sectors is covered by the identified companies and the companies participating in the reporting process. It also indicates the reference values used for the calculation.

The sectoral coverage of the participating companies has increased only slightly compared to the previous year (<1%). This is due to normal year-on-year fluctuations in production, and not to additional market players.

^* The determination of a degree of coverage of the quarried natural resource sector has been dispensed with in view of the fragmentation of the sector.

^**The remaining shares in the crude oil and natural gas sector have not been included because they are several smaller companies (see https://www.bveg.de/DerBVEG/Publikationen/Jahresberichte).

^*** At the time of reporting of the D-EITI Annual Report 2024, complete production volumes for evaporated salt in Germany for 2024 are not available to the Federal Institute for Geosciences and Natural Resources (BGR).

As described in Selection of payment flows, the calculation of government revenues from the extractive sector is challenging for various tax-law reasons. Production was chosen as the most reliable basis for covering the sectors, as it is considered the most appropriate indicator of the economic contribution. It reflects the actual production and thus the remuneration of the company and is at the same time independent of complex tax structures.

For the determination of the coverage of lignite, the lignite extraction in Germany in 2024 was used, based on “Statistik der Kohlenwirtschaft e.V.” of the Federal Association of Lignite (DEBRIV) as well as individual publications.

The output volumes published in the 2024 annual report of the Federal Association for Natural Gas, Petroleum and Geoenergy e. V. (BVEG) was used as a basis for the calculation of the coverage of crude oil and natural gas. These data were set in relation to the respective output volumes of the participating companies based on participation in the consortium.

The Bundesanstalt für Geowissenschaften und Rohstoffe (Federal Institute for Geosciences and Natural Resources) (BGR) provided the relevant data for determining the degree of coverage in the potash and salts sector.

¹ https://www.unternehmensregister.de/en/search/accounting under “Publication type”, select “Payment reports”.

² BVerfG, Order of the First Senate of 26 June 2002 – 1 BvR 558/91 – paragraphs (1–79), http://www.bverfg.de/e/rs20020626_1bvr055891.html

³ BVerfG, Order of the Second Chamber of the First Senate of 16 August 2002-1 BvR 1241/97 – paragraphs (1–25), http://www.bverfg.de/e/rk20020816_1bvr124197.html

⁴ Requirement 2.6 “State participation”; Requirement 4.5 “Transactions related to state-owned enterprises” not applicable in Germany; Requirement 6.2 “Quasi-fiscal expenditures” not applicable in Germany