Editor’s Note: This post first appeared on Fareed Zakaria’s Global Public Square on CNN’s website.
The annual meeting of the Clinton Global Initiative in New York isn’t usually the place where the bosses of big business are made to shift uncomfortably in their seats. But ONE campaign co-founder Bono seemed to do exactly that at the CGI’s opening session last week when he took on Big Oil for its opposition to more transparent deals with developing countries.
Here is the issue. Africa is a rich continent – rich in minerals, oil, and gas. Right now, big companies pay big money to countries in Africa to extract these resources – and yet so many Africans live in extreme poverty because the money goes missing. This phenomenon is so common that it has a name – the “resource curse.” But the curse is not the resources, it’s the corruption.
That is why we are backing a global initiative to compel companies to publish what they pay to governments for these resources, forcing any corruption into the daylight. When the public can see what’s being paid, they can hold their leaders accountable for how the money is used.
Imagine if the U.S. government made a secret, backroom deal with a foreign company and sold off the mining rights to the Grand Canyon. Americans would, rightly, be outraged and demand to know details of the deal. Anybody would.
But in the developing world, these kinds of deals are commonplace. Millions of people living in the poorest countries have no idea where the proceeds of their natural wealth are going.
People have a right to ask their leaders, “Where is the money from the natural resource deals? What happened to the clean water and sanitation you promised us? Where are the hospitals?”
Ordinary citizens can only fight corruption with information. We must do our part to help get information to them – in this case, by fighting for rules to require companies to publish what they pay for extractive rights.
In fact, U.S. law already requires them to do this. In 2010, Congress passed a provision requiring all U.S.-listed oil, gas and mining companies to publish their payments to foreign governments. However, when the SEC made a rule to implement the law, the American Petroleum Institute – which represents oil company interests – launched a legal attack that resulted in a court negating the rule and sending it back to the Commission for further action.
As the SEC crafts a new version of the rule, it’s time for big oil companies to back off, or risk being considered complicit in the corruption the current opacity enables. Corruption kills like any disease, as a nation’s resources should be used for the health, development and dignity of its people rather than being squirreled away in some offshore account.
To be clear, we are not saying the oil companies are corrupt. We’re saying they could help uncover corruption, but they’ve chosen not to. Unless the terms of the deals are made known, citizens are kept in the dark and leaders cannot be held accountable.
Take Equatorial Guinea, for example. It’s one of the most resource-rich countries in Africa, where more than 90 percent of the government’s revenue comes from oil and gas. Yet, a majority of its citizens live in extreme poverty, many without reliable electricity, healthcare and basic government services. Their biggest customer? Exxon/Mobil.
By contrast, when a country commits itself to transparency, great things can happen. In Botswana, revenues from natural resources are being spent on its own people and dramatically improving their health, education and economic well-being.
There are also some companies who are doing the right thing. Tullow Oil, a British company, has decided to voluntarily publish what they pay next year, even before a European-wide law takes effect requiring them to do so. And the mining sector, including the world’s biggest mining company, Austrialia’s Rio Tinto, and U.S.-based Newmont Mining, are generally supportive of more transparency.
We also shouldn’t lose sight of the very good things some oil companies are doing in the developing world, especially in the area of HIV and malaria prevention. But as Bono said at CGI, “You can’t give alms to the poor on one level and have your hands on their throats on another.”
Indeed, there is a global transparency revolution under way. The tide of history is moving in only one direction: towards shedding more light on opaque deals, not less. The European Union has passed transparency laws that apply to all of the EU’s 28 countries and Canada and others are stepping forward with laws of their own. Oil companies are fighting a rising tide.
At ONE, we’re doing our part in the U.S. by asking people to sign a petition to the SEC urging them to be a part of this global revolution.