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Washington, DC – International humanitarian organization Oxfam America testified today before the Commission on Security and Cooperation in Europe, also known as the US Helsinki Commission, at a hearing entitled “The Link between Revenue Transparency and Human Rights.” The hearing focused on programs that support revenue transparency in the oil, gas, and mining industry and how these programs help address human rights issues in resource-rich countries.
Voluntary initiatives like the Extractive Industries Transparency Initiative (EITI) have emerged to increase transparent and accountable management of natural resource wealth. While these efforts are an important first step, transparency will not be effective without improved political accountability and the protection of basic human rights.
“Publishing numbers will only go so far if political accountability issues are not addressed. The US government and other countries supporting EITI implementation must develop accompanying strategies to improve human rights protection and oversight of government expenditures in these countries. Otherwise, transparency initiatives may have the perverse effect of masking these underlying problems,” said Ian Gary, senior policy manager at Oxfam America, who delivered the testimony.
“More than half of the world’s poorest people live in countries rich in natural resources. Despite billion dollar industries operating on their lands, many resource-rich countries exhibit classic signs of the ‘resource curse’ with high rates of underdevelopment, internal conflict, and political instability, all of which impinge on the rights of citizens. This hearing is a timely opportunity to assess the progress made in the last decade to improve human rights and development in these countries.”
For decades, these important issues were not part of the international development agenda. In the last several years, Oxfam and other nongovernmental organizations as well as civil society groups in developing countries have begun calling attention to the tragic irony of extreme poverty in countries with abundant natural resource wealth.
Secrecy in oil, gas, and mining industries has been identified as a major obstacle to reform. In many countries, contracts and payments between foreign companies and host governments are not made public, leaving citizens with little information about the revenues coming into their country.
“Without accurate, timely, and complete information about resource revenues, citizens have no power to hold their governments accountable for using this wealth for essential services like health and education. Transparency will help make way for stability and real solutions to poverty that the oil, gas, and mining industries can support improving the ability of these industries to address poverty,” said Gary.
In some countries, such as Ghana, EITI discloses new information and provides a platform for civil society and government engagement. But Ghana has a vibrant civil society with an active press and a generally favorable human rights environment. In countries like Equatorial Guinea – with a history of oil-fueled corruption, no free elections, independent media, or strong civil society – transparency of payments from companies to governments is important but needs to be accompanied by progress on human rights to be used as a tool for political accountability. Equatorial Guinea was dropped from EITI on April 15, 2010 after it was not granted an extension to complete a validation process to assess EITI implementation. EITI’s board did not find evidence that “exceptional and unforeseen” circumstances had prevented the country from making progress.
Given the uneven progress of voluntary initiatives to date, additional disclosure rules for oil, gas, and mining companies are needed. The US Congress, for example, should pass the Energy Security through Transparency Act (S.1700) this year to require all oil, gas, and mining companies to disclose payments to host countries and extend transparency as a truly global standard for company operations. The legislation, introduced in September 2009 by Senators Lugar and Cardin, would apply not only to US companies, but to all companies registered with the US Securities and Exchange Commission. This includes European companies, such as Shell and BP, as well as those in emerging markets like China, India, and Brazil.
In addition to this legislation, Oxfam suggested additional US government reforms during the testimony that would help address human rights violations in resource-rich countries, including the development of concrete strategies for human rights promotion and protection in resource-rich countries by the State Department; engagement of the State Department’s Bureau of Democracy, Human Rights, and Labor in the global EITI process; and increased US support for efforts by civil society, journalists, and others to disseminate payment information disclosed as a result of EITI.
“The US and other countries must recognize that more comprehensive strategies are needed for resource-rich states to truly overcome the ‘resource curse’ through human rights promotion, political accountability, and improved transparency in all areas. Only then can citizens truly begin to see the benefits of natural resource extraction,” said Gary.