Mr. President, I rise today to discuss a bill that will increase energy security and combat poverty through greater transparency in the oil, gas and mining industries.
This week, Senator Lugar and I, along with Senators Schumer, Wicker and Feingold, introduced the “Energy Security Through Transparency Act.” This legislation will require all companies listed on U.S. exchanges to disclose their payments to foreign governments for the extraction of oil, gas and minerals on a country-by-country basis. This disclosure would apply to all companies that file with the Securities and Exchange Commission (SEC), regardless of where they are based, and would be added to existing SEC requirements.
Mr. President, this legislation will set a new international standard for corporate and state behavior.
With this bill, we are changing the paradigm within the world’s oil, gas and mining companies operate, and, importantly, changing the nature of their relationship with the governments in the countries in which they operate.
This is critical to our energy security, our national security and for the welfare of the citizens of these countries.
When we look at countries situated on oil and natural gas reserves, we think these countries have won the global version of the economic lottery. But what economists have found by studying these resource-rich countries is that they often fare worse than their resource-poor neighbors, both economically and politically.
In these countries rich in natural resources, governments do not provide the most basic of information concerning natural resource revenues. This lack of transparency facilitates and even encourages corruption. This often leads to grinding poverty in countries that are paradoxically rich in natural resources.
This legislation will provide much-needed regulatory and legal support to existing initiatives such as the “Extractive Industries Transparency Initiative (EITI),” and “Publish What You Pay.”
Mr. President, it is critical that the United States lead by example on transparency. That’s why this legislation also encourages the United States to become an implementing country under EITI.
U.S. implementation of EITI would have practical and symbolic value on a number of fronts.
While this legislation puts human rights front and center in the global energy discussion, it also empowers 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, making them more conducive for long-term investments.
Just as importantly, U.S. implementation would bolster the momentum for the EITI, helping to make it a truly global standard for transparency in extractive industries. Leading by example is one of the most powerful ways the U.S. can encourage other countries to sign on to the initiative.
Mr. President, I look forward to working with our colleagues to ensure passage of this important and timely legislation. Thank you.