FOR IMMEDIATE RELEASE
Key Legislation Calls for Resource Revenue TransparencyMay 15, 2008
WASHINGTON, DC ? With high oil prices squeezing consumers and global instability wreaking havoc on the oil industry around the world, international agency Oxfam America welcomed House Financial Services Committee Chairman Barney Frank?s (D-MA) introduction of key legislation aimed at reducing corruption and insecurity in the oil, gas, and mining industries.
The Extractive Industry Transparency Disclosure (EITD) Act of 2008 introduced today would require oil, gas, and mining companies to publicly disclose payments made to foreign governments. With more than half of the world?s poorest people living in countries rich in natural resources, this legislation would provide citizens with vital information to hold their governments accountable for how these so-called ?extractive industry? revenues are used.
?Corruption and mismanagement thrive in environments characterized by secrecy. Access to information is a fundamental aspect of development,? says Raymond C. Offenheiser, president of Oxfam America. ?Representative Frank has taken an important step to ensure that communities know how mining and oil projects will impact their lives and lands and how money generated for their governments can contribute to the long-term reduction of poverty.?
With record high oil prices and diminishing reserves, companies are increasingly operating in new areas of developing regions, including West Africa, the Amazon basin, and Southeast Asia. Given the weakness of government oversight in many of these countries, it is even more important that oil and mining companies be transparent. In Angola, for example, more than $4 billion in state oil revenues could not be accounted for between 1997 and 2002?an amount roughly equal to the entire sum spent on social programs by foreign donors and the government in the same years.
Countries dependent on oil and mineral wealth also face a much higher rate of internal conflict and violence. In Africa?s Great Lakes region?which includes parts of Burundi, Rwanda, the Democratic Republic of Congo, Uganda, Kenya, and Tanzania?five million people were killed in violent conflicts in the last decade, most of which were directly and indirectly funded by resource extraction.
?It is no secret that lack of transparency in the extractive industry often goes hand-in-hand with government corruption and internal conflict. The industry suffers as a result with company investments at risk and higher energy prices for consumers,? said Offenheiser. ?This legislation would foster accountability in nations where secrecy has undermined development, democracy, and human rights.?
The EITD Act would apply not only to US companies, but to all oil, gas, and mining companies registered with the US Securities Exchange Commission (SEC). This includes European companies, such as Shell and BP, as well as those in emerging markets like China, India, Brazil, and Russia. Like the Foreign Corrupt Practices Act of 1977 and the National Environmental Protection Act of 1969, this legislation could have a ripple effect around the world and would be an important complement to voluntary initiatives that may take hold in only a few countries.
?This legislation is an opportunity for the US to take leadership in the international community,? said Offenheiser. ?Mandatory revenue disclosure has the power to weed out corruption in developing countries making way for stability and real solutions to poverty that the oil, gas, and mining industries can support.?
Oxfam America is working in support of the EITD Act by calling on international extractive companies to show their respect for communities? right to revenue information as well as their right to decide whether they want companies to begin or expand operations on their land.
?Revenue disclosure will give communities the tools they need to have a say in how extractive projects affect their lands and livelihoods. If communities know how much extractive companies are paying their governments for natural resources, they can advocate for a fair share of the benefits to address community needs like education, health care, and jobs,? said Offenheiser.