WASHINGTON — House Financial Services Committee Chairman Barney Frank will hold a hearing on Thursday, October 25 at 10:00 am in 2218 Rayburn House Office Building to examine the issue of and focus public attention on the importance of increased resource revenue transparency in the extractive industries.
The Publish What You Pay (PWYP) United States coalition, which includes Oxfam America, Global Witness, and Revenue Watch Institute, applauds Chairman Frank for holding this important hearing, and encourages the Committee members to consider additional steps to accelerate revenue transparency in oil, gas and mining projects as a means of reducing corruption and enhancing poverty reduction efforts in resource-rich countries.
Ahead of his testimony on behalf of the PWYP coalition before the Committee, Ian Gary, senior policy advisor for Oxfam America, stated, “New legislation should require disclosure of payments in this discrete but vital segment of the international economy. In doing so, it would constitute a crucial piece of the multi-pronged international effort to curb corruption in the extractive industries and would ultimately make the business environment more favorable to international firms navigating these often difficult waters.”
“The US must maintain its place at the forefront of the international community by doing what it can to weed out the rampant corruption and mismanagement in so many oil- and mineral-producing states," continued Gary. "The lack of transparency in these industries, especially in countries that depend heavily on income from these sectors, often goes hand-in-hand with widespread poverty and wealth for a tiny elite."
“In these industries it is not enough to just target bribery. Highly complex financial arrangements coupled with a lack of transparency mean that the funds of overseas mining and oil companies—including American companies—often end up being channeled for corrupt purposes,” said Sarah Pray, coordinator of Publish What You Pay United States.
Lack of revenue transparency and secret contracts between governments and companies prevent any meaningful system of citizen accountability and in turn create opportunities for corruption.
A voluntary provision for resource revenue transparency—the Extractive Industries Transparency Initiative (EITI)—was launched in 2002 in response to campaigning by PWYP, and is strongly backed by the US. While EITI has helped to increase the global push for revenue transparency, only a few countries have taken significant steps toward implementation of the initiative.
“A voluntary mechanism that relies on the will of individual governments for compliance will never capture the most egregious offenders, such as Angola and Equatorial Guinea, for whose citizens transparency is the most critical. A sustainable and comprehensive solution to corruption and the resource curse requires both voluntary and mandatory provisions,” said Corinna Gilfillan, Head of the U.S. office for Global Witness.
The political will to implement voluntary measures in different countries may wax and wane over time. For these reasons, it is important to complement voluntary measures with mandatory transparency regulations in countries that are major beneficiaries of resource-rich nations. All of the major oil, gas and mining companies are extremely supportive of EITI and should continue to support the principles of transparency—both voluntary and mandatory.