Oxfam condemned today’s expected introduction by Representative Bill Huizenga (R-MI) of a bill that would roll-back the bi-partisan Cardin-Lugar anti-corruption law known as “Section 1504.”
This landmark law, which requires oil and mining companies to publish the payments they make to the US and governments around the world for access to natural resources, is a well-established hallmark of United States global leadership in fighting corruption in poor countries. It was spearheaded by former Senator Lugar (R-IN) and Senator Ben Cardin (D-MD). The law covers the vast majority of the world’s largest oil, gas and mining companies, including ExxonMobil, Chevron, BP and Shell, as well as leading state-owned companies from China and Brazil.
“A vote to roll back Cardin-Lugar is a vote for corruption,” said Isabel Munilla, Senior Extractive Industries Policy Advisor with Oxfam America. “There is absolutely no benefit to nullifying this common sense law unless your objective is to make it easier for corrupt elites to steal money. More than 30 countries around the world followed the US lead and passed similar laws, but rolling this back would turn the US from a transparency leader to a laggard overnight.”
Since the law was passed in 2010, Oxfam estimates that oil company payments to governments of some of the world’s poorest countries surpassed $1.5 trillion. This money could have helped governments pay for schools, roads, hospitals and other critical measures to fight poverty without needing a dime of US foreign aid. While disclosures are emerging from sister laws abroad, a generous phase-in period in the final rule adopted by the Securities and Exchange Commission (SEC) last year means citizens will have to wait until 2019 to follow the money. In the meantime, secrecy puts these funds at risk of waste or even worse they can be funneled to corrupt officials without any accountability.
“With payments out in the open, citizens can hold their governments accountable for how the billions of dollars companies are shelling out are spent, and companies can be held accountable for paying what is due,” continued Munilla. “Armed with this information, citizens can ensure these funds are spent to help fight poverty by building roads, schools, and hospitals. This is the type of direct foreign investment that would lift poor countries out of poverty, and help countries graduate from foreign aid. By rolling back this anti-corruption law, Members of Congress would be fueling corruption, waste, and keeping poor countries dependent on US foreign aid.”
The law was also a huge victory for investors. Investors worth $10 trillion in assets under management publicly endorsed the law and the strong rules adopted by the SEC. The law was also endorsed by some of the world’s largest mining companies including BHP Billiton, Rio Tinto, and Colorado-based Newmont Mining, and oil companies such as Dallas-based Kosmos Energy, Shell, BP, and Total.
Today’s bill was introduced as the Senate moves to confirm former ExxonMobil CEO Rex Tillerson to be the next Secretary of State.
“The timing of this bill is perhaps no surprise given Tillerson’s and ExxonMobil’s vocal opposition to this anti-corruption rule and their efforts, along with the American Petroleum Institute, to try to block it,” continued Munilla. “Oxfam and anti-corruption advocates across the developing world have been campaigning for this law and its implementation for more than a decade and we will not rest as US leadership on fighting corruption is threatened. The fact that some in Congress have put rolling-back anti-corruption rules so high on their list of priorities raises serious questions about whose interests these members are serving.”