Countries rich in natural resources too often end up with high rates of poverty, corruption, conflict, and poor governance rather than prosperity. Finding valuable oil, gas or gold should boost countries ability to fight poverty and improve living standards for all, but even in countries with good governments, the temptation of big bribes can corrupt key officials and cause good governments to fail. This is known as the resource curse.
But it takes two to make these transactions possible. The bribe has to come from somewhere and we have a part to play. If we can improve transparency in U.S.-based extractive industries such as mining, oil and natural gas, we can make a huge difference in the fight against global poverty.
Call your senators now and tell them to support the Cardin-Lugar amendment (number 3980) to the Senate’s Wall Street reform legislation (S.3217). This bill could hit the Senate floor any minute, so please make your calls right away.
The Energy Security Through Transparency (ESTT) Amendment, introduced by Senators Benjamin Cardin and Richard Lugar, takes important steps towards reversing the resource curse by revealing payments made here and abroad to foreign governments for oil, gas and minerals. Once the citizens of these countries know how much their governments are receiving and from whom, they can hold those governments accountable for investing those resources in feeding their children and strengthening their communities with the billions of dollars of revenue generated by natural resources.
This amendment would promote the financial stability of resource-rich countries as well as the United States by creating a better domestic investment climate for U.S. businesses, increasing the reliability of commodity supplies, and promoting greater U.S. energy security and thereby strengthens our national security.
The amendment, which is cosponsored by Senators Durbin, Schumer, Feingold, Merkley and Johnson, specifically would:
Promote Corporate Transparency: The extractive industries are capital-intensive and dependent on long-term stability to generate returns. Transparency of payments made to a government can help mitigate political and reputational risks and also allow shareholders to make better-informed assessments of opportunity costs in what are often very high-risk operating environments that may be politically unstable, rife with corruption and have a history of civil conflict fueled, in part, by natural resources.
Help Alleviate Poverty: Mineral wealth as well as oil and gas reserves frequently foment poverty and instability. Resource revenue transparency enables citizens of resource-rich countries to hold their governments more accountable and can help ensure that a country’s natural resource wealth is used wisely.
Enhance Energy Security: Increased transparency will directly benefit U.S. energy security by helping to create more stable, democratic governments, as well as stable business environments in resource-rich countries.
Specific provisions inside the Cardin-Lugar Energy Security Through Transparency Amendment:
- require companies listed on U.S. stock exchanges to disclose in their regular SEC filings extractive payments made to foreign governments for oil, gas and mining;
- express the Sense of Congress that the Administration should undertake to also become an implementing country of the Extractive Industry Transparency Initiative (EITI);
- commit the Department of Interior to disclosing extractive payments received for resources derived from federal lands; and
- encourages the President to work with members of the G-8, G-20,the Organization for Economic Cooperation and Development and the Asia-Pacific Economic Cooperation to promote similar disclosure through their exchanges and jurisdictions.
We may only have today to get these calls in, so make yours now and keep watching the ONE Blog for updates.