WASHINGTON – Energy companies would have to publicly disclose what they pay for oil, gas and minerals from U.S. and foreign governments under a bipartisan bill introduced today in the U.S. Senate by Senator Benjamin L. Cardin (D-MD), Chairman of the Commission on Security and Cooperation in Europe, and Senator Dick Lugar (R-IN).
The bill aims to reverse the “resource curse” where countries rich in natural resources and rampant with corruption can hide the financial benefits they gain from energy companies and use the revenue to further finance corruption rather than invest in their people. Commissioner Senator Roger Wicker (R-MS) and Senator Charles E. Schumer (D-NY) are original cosponsors of the bill.
The Energy Security Through Transparency (ESTT) Act:
• Requires companies listed on U.S. stock exchanges to disclose in their regular SEC filings their extractive payments to foreign governments for oil, gas and mining;
• Expresses the Sense of Congress that the Administration should undertake to become an ‘implementing country’ of the Extractive Industry Transparency Initiative (we are currently a ‘supporting’ country);
• 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;
• Commits the Department of Interior to disclosing extractive payments received for resources derived from federal lands.
The legislation builds on the Helsinki Commission’s work to promote transparency in the extractive industries.
“This legislation puts human rights front and center in the global energy discussion,” said Cardin. “The transparency measures in this bill will empower people to fight corruption and hold their governments accountable. Greater transparency will lead to greater stability in countries that benefit from their natural resources and will lessen volatility in the global energy market.”
“History shows that oil, gas reserves and minerals frequently can be a bane, not a blessing, for poor countries, leading to corruption, wasteful spending, military adventurism, and instability. Too often, oil money intended for a nation’s poor lines the pockets of the rich, or is squandered on showcase projects instead of productive investments,” Lugar said. “When financial markets see stable economic growth and political organization in resource rich countries, supplies are more reliable and risk premiums factored into process at the gas pump are diminished. Information is critical to maintaining healthy economies and healthy political systems.”
“Good governance and transparency are important cornerstones of political stability,” Wicker said. “Our support for these principles through this legislation strengthens international efforts to combat the resource curse, while at the same time benefitting our national and economic security by promoting greater energy stability.”
“Energy is one of most valuable commodities and boosting the transparency of deals between energy companies and foreign countries will help make sure crooked, unstable governments don’t horde windfalls while their citizens suffer from the effects of poverty and corruption,” said Schumer. “The best way to help the people of these nations is to start right here at home, requiring companies registered with the SEC to disclose these energy deals and ensuring that Americans don’t paying higher energy prices to finance corruption in other countries.”
