Congress passes law to end secrecy in oil, gas, and mining industry
By Raymond C. Offenheiser, president of Oxfam America - 07/19/10 01:15 PM ET

Last week, Congress made an unprecedented commitment to financial transparency and good governance in a sector that not only affects American wallets but also some of the most vulnerable communities around the world. An historic measure, included as part of the Dodd-Frank financial reform legislation passed by the House and Senate, will make disclosure of payments from oil and mining companies to governments around the world a legal requirement, increasing financial transparency in the oil, gas, and mining industry and helping to reduce the corruption, mismanagement, and conflict that are too often associated with natural resource extraction booms.





Secrecy of oil, gas and mining company payments to governments fosters government corruption and violent conflict in resource-rich countries that are home to more than half of the world´s poorest people. Citizens of these countries are left with no way of holding their government accountable for using these revenues for basic services like education and healthcare. And instability in these regions poses a long-term threat to national security, foreign policy, and economic interests in the United States.

Take Equatorial Guinea for example. It’s the third largest oil supplier to the United States from Africa, but payments to the government from international oil companies such as ExxonMobil, Chevron, and Marathon have been declared a state secret. Despite oil revenues that went from $190 million in 1993 to $4.8 billion in 2007, Equatorial Guinea has been unable to help pull its tiny population of only 650,000 (roughly the size of Baltimore) out of poverty. Citizens are left with little information about the billions of dollars coming into their country from oil and gas companies.

But this new law will require ExxonMobil, Chevron, Marathon and others to publicly disclose payments to the country for their extraction of oil, gas, and minerals as part of financial statements that are already required by the US Securities and Exchange Commission (SEC). And with this information, the citizens of Equatorial Guinea will be better positioned to hold their government accountable.

The law creates a low-cost, uniform transparency method for oil, gas, and mining companies registered with the SEC and covers more than 90 percent of internationally operating oil companies and many of the top international mining companies. This not only includes American companies but also many foreign companies, such as Shell and BP, as well as companies from emerging markets such as China, India, Brazil, and Russia.

Following the Senate vote last Thursday, Senator Cardin said: “This provision is a critical part of the increased transparency and corporate responsibility that we are striving to achieve in the financial industry. Given the catastrophic events in the Gulf of Mexico, oil companies, in particular, should well understand that secrecy fosters instability, corruption and greater risk. We now have the tools to help people in resource-rich countries hold their leaders accountable for the money made from their oil, gas and minerals.”

The language of this law is based on the Energy Security through Transparency Act (S. 1700), a bipartisan Senate bill championed by Senators Lugar (R-IN) and Cardin (D-MD). And thanks to the efforts of Senator Leahy, who offered the measure during the House-Senate conference process, and House Financial Services Chairman Barney Frank, whose early leadership on transparency in the oil and mining industries supported this measure, it was included in the final financial services reform package.

Passing this law demonstrates the US commitment to transparent business practices and accountable governance by setting up an international standard for the public disclosure of natural resource revenue information. But its effectiveness will be determined by strict implementation by lawmakers and development of effective implementing regulations by the SEC. Companies should heed the call for transparency so citizens of resource-rich countries can begin to use this information to hold their governments accountable for using revenues to address essential services like healthcare, education, and job creation.

The SEC must quickly undertake its rule-making process to implement this important measure as Congress intended. Oxfam America and our allies in the Publish What You Pay campaign will be closely following the rule-making process to ensure this groundbreaking disclosure measure is quickly put in place.




Fuente: THEHILL

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