109 HRES 995 IH: Promoting transparency of natural resource
U.S. House of Representatives
2006-09-12
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EN
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Whereas, according to Freedom House rankings of freedom in
the world, among the top ten petroleum exporting nations of the world, only
Mexico and Norway can be considered free, democratic nations, while the
others—Kuwait, Nigeria, Venezuela, Algeria, Iran, Russia, Saudi Arabia, and the
United Arab Emirates—exhibit limited elements of democracy;
Whereas mismanagement and misappropriation of billions of
dollars worth of revenues from the extraction of natural resources have
occurred in some resource-rich African countries and such funds have ended up
in the hands of autocratic rulers who are less than accountable to their
citizens, ultimately contributing to the problems of political instability and
weak and failing states;
Whereas in many resource-rich African countries
multinational extractive companies are not required to publish information
about payments made to host governments, and governments do not make
information available to their citizens about the revenues they have received
from such companies;
Whereas such opacity has resulted in billions of dollars
worth of financial impropriety, facilitating embezzlement, corruption, and
revenue misappropriation;
Whereas African oil producers currently provide as much as
a quarter of America’s oil supplies, and stable, transparent, and accountable
African producers will be the key guarantors of future energy supplies to the
United States;
Whereas many companies working in the extractive
industries have seen their legitimate revenues misappropriated and squandered
in countries in which revenue flows are not transparent, leaving such companies
vulnerable to accusations of complicity with corruption and undermining the
social legitimacy and political stability that protect the operations of such
companies;
Whereas in Equatorial Guinea, the country’s oil boom has
led to a significant increase in its gross domestic product (GDP), while its
living standards remain among the worst in Africa and much of the country’s oil
revenues remain unaccounted for due to a lack of transparency that places oil
companies at risk of being seen as complicit with this corruption;
Whereas one in four children in Angola have died before
the age of five in a country in which one in four dollars of oil revenues have
gone unaccounted for throughout much of the last decade;
Whereas despite current high oil prices, Gabon is
experiencing serious economic hardships due to ill-advised borrowing for
construction during a previous low point in oil prices, leaving half the income
of the Gabonese Government committed to interest payments at a time of rising
unemployment;
Whereas, according to the nongovernmental organization
Publish What You Pay, approximately $300 million in oil revenues of Congo
(Brazzaville) identified by independent auditors in 2005 did not show up in the
budgets of Congo (Brazzaville);
Whereas the mismanagement of natural resource revenues in
resource-rich developing countries often results in the taxpayers of the United
States and other countries providing more aid to such resource-rich developing
countries to compensate for the failure of such countries to provide basic
services;
Whereas resource revenue transparency, where companies
publicly disclose all payments made to governments for natural resource
extraction and governments publish receipts of such payments, is a crucial
first step to combating corruption and ensuring that revenues from natural
resource extraction benefit the citizens of such countries;
Whereas disclosure of foreign investment contracts such as
production sharing agreements (PSAs), host government agreements (HGAs), and
other similar agreements contain the formulas necessary to calculate the amount
and distribution of revenues generated from extractive projects and are
policy-setting documents that often establish social and environmental
conditions under which such projects operate;
Whereas the disclosure of such contracts is also necessary
to root out corruption and to determine the social and environmental impacts of
a project and whether it will contribute to development and poverty
reduction;
Whereas the Extractive Industries Transparency Initiative
(EITI), an international agreement supported by the Group of Eight (G–8)
nations, is working toward ensuring that the revenues from natural resource
extraction are more transparent and more accountably managed;
Whereas the EITI has the support and participation of a
wide group of stakeholders, including the World Bank, the International
Monetary Fund, approximately 20 developing countries (including four African
countries which are implementing the EITI), civil society, major international
companies, and international investors;
Whereas the major oil, gas, and mining companies and
leading investors representing $8 trillion in assets have recognized the
important role that resource revenue transparency plays in creating a stable
operating environment and have been actively involved and publicly stated their
support for resource revenue transparency and the EITI;
Whereas the G–8 nations, meeting in Gleneagles, Scotland,
from July 6–8, 2005, stated: We call on African resource-rich countries
to implement EITI or similar principles of transparency and on the World Bank,
IMF and regional development banks to support them. We support the development
of appropriate criteria for validating EITI implementation.
;
Whereas the International Monetary Fund’s Guide on
Resource Revenue Transparency states that given these potentially
substantial costs of nontransparent practices, it is estimated that
institutional strengthening to improve transparency in vulnerable resource-rich
countries should provide an ample pay-off for relatively modest
investment
;
Whereas the United States Department of the Treasury
statement regarding the World Bank’s Extractive Industries Review states:
We believe financial assistance should be predicated upon the government
of a country where a project is located having in place, or committing to
establish, a functioning system for accounting for revenues and
expenditures.
;
Whereas United States trade preference programs, such as
the African Growth and Opportunity Act (AGOA), include eligibility criteria
that relate to combating corruption; and
Whereas transparency will contribute to the best interests
of everyone concerned: citizens, companies, investors, governments, and the
greater international community: Now, therefore, be it
That it is the sense of the House of
Representatives that the Government of the United States should—
(1)proactively
support and participate in the Extractive Industries Transparency Initiative
(EITI) and provide technical and financial assistance to assist African
countries in implementing EITI or in adopting resource revenue transparency
policies;
(2)work with the international community to
develop a monitoring process for nonmining natural resources, such as
timber;
(3)require natural
resource extraction companies to disclose natural resource revenue payments on
a country-by-country basis;
(4)consider a
government’s substantive efforts or failure to ensure revenue transparency for
critical natural resource sectors when determining country eligibility for
relevant United States trade preference programs, such as the African Growth
and Opportunity Act, and foreign assistance programs such as the Millennium
Challenge Account;
(5)proactively
support disclosure of resource revenues and ex-ante disclosure of foreign
investment contracts underpinning extractive sector projects, making such
disclosures a condition of support for financing by the United States Overseas
Private Investment Corporation and the Export-Import Bank of the United States;
and
(6)work with the
international financial institutions to require resource revenue transparency
and contract transparency as a condition for lending or assistance to
resource-rich developing countries.