[Congressional Record Volume 155, Number 82 (Wednesday, June 3, 2009)]
[Extensions of Remarks]
[Pages E1302-E1303]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   RESOURCES, REVENUE, AND RESPONSIBILITY: STRENGTHENING REVENUE AND 
  BUDGET TRANSPARENCY THROUGH THE EXTRACTIVE INDUSTRIES TRANSPARENCY 
                               INITIATIVE

                                 ______
                                 

                         HON. ALCEE L. HASTINGS

                               of florida

                    in the house of representatives

                        Wednesday, June 3, 2009

  Mr. HASTINGS of Florida. Madam Speaker, as Co-Chairman of the U.S. 
Commission on Security and Cooperation in Europe (commonly referred to 
as the Helsinki Commission), I recently returned from a meeting in 
Dublin, Ireland, with almost 100 parliamentarians from 30 countries 
where we had the opportunity to discuss responses to the global 
economic crisis. The meeting was organized by the Organization for 
Security and Cooperation in Europe Parliamentary Assembly (OSCE PA) and 
the Parliament of Ireland. All countries are grappling with difficult 
national problems related to the economic crisis. And indeed, we are in 
a crisis, and for America, this is the worst economy we've experienced 
since the Great Depression in the 1920s. People all across America, and 
in my home state of Florida, are losing their homes, their jobs, and 
are unable to provide for their families.
  In addition to discussions on financial regulation, trade 
protectionism, good governance, and the social consequences of the 
crisis, I was pleased that we also discussed revenue transparency in 
the extractive industries as an integral part of creating more 
transparency in the global financial system overall. As legislators, we 
have a duty to find ways to relieve the suffering caused by the 
financial crisis through vital investments in health care, education, 
infrastructure, and job creation so that we can emerge from this crisis 
stronger and better than before. But part of the solution is looking at 
how we even got into this crisis. Transparency--or the lack of it--in 
the financial world is certainly one of the culprits. And as revenue 
dwindles, making the most of what we have becomes even more important.
  The way I see it, improvements in revenue transparency, particularly 
when we focus on the extractive industries, are important in at least 
three key ways: The first is to help alleviate poverty. 3.5 billion 
people live in countries that are rich in oil, gas and minerals. With 
good governance, the exploitation of these resources can generate large 
revenues to foster growth and reduce poverty. Resource revenue 
transparency is necessary in order for citizens--the true owners of 
their country's natural wealth--to be able to demand greater 
accountability from their governments for spending that serves the 
public interest.
  The second is to promote stable investment climates. Mandatory 
disclosure can help diminish the political instability caused by opaque 
governance. Since 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.
  The third area is to enhance energy security. Opening the extractive 
industries sector to greater public scrutiny is key to increasing civil 
society participation in government. This form

[[Page E1303]]

of transparency, in conjunction with an increasingly active civil 
society, can help create more stable, democratic governments, as well 
as stable business environments.
  It's a well-known, and well-bemoaned, fact that the United States is 
becoming more and more reliant on imported energy to fuel our economy. 
We are the world's largest consumer of oil--we account for an 
astounding 25 percent of global daily oil demand--despite having less 
than 3 percent of the world's proven reserves. And we source that oil 
from some unstable and unfriendly places in the world such as Nigeria 
and Venezuela.
  In the context of today's discussion some of you may wonder why the 
United States should care what is happening in Turkmenistan or 
Kazakhstan, when we don't rely on these countries for our energy 
supplies. Russia is only number eight on our list of top ten oil 
suppliers and Kazakhstan, Turkmenistan, Uzbekistan and Azerbaijan don't 
even make it into the top twenty.
  The answer is that unlike natural gas, oil is a commodity, so 
regardless of where we source our oil, what happens in other oil-rich 
countries impacts the stability of our price and our supply as well. 
Truly, no one country can achieve energy security without global energy 
security.
  I think we can all agree that relying on a country as a source of 
energy can distort a bilateral relationship. I'm sure you can imagine 
how drastically different our interactions with some countries would be 
if we did not rely so heavily on these countries' resources. I think it 
goes without saying that we would have more leverage to promote 
democracy and civil society. Clearly oil constrains, if not drives, our 
foreign policy.
  So while it is imperative that we work to limit our dependence on 
foreign oil and change the dynamic of supply and demand, it is just as 
important to create more stable and reliable sources of energy. One of 
the key ways the international community has sought to counteract the 
political and economic instability inherent in the resource curse is 
through programs that seek to instill transparency and accountability 
into the resource payment system.
  As legislators, there is a lot that we can do to further the cause of 
transparency in the extractive industries.
  As Co-Chairman of the U.S. Helsinki Commission, I have held hearings 
and briefings on energy security and transparency that call attention 
to problems and advocate for solutions. I have also written letters--
co-signed by a number of my congressional colleagues--on this topic to 
the Executive Branch to advocate for specific policy stances related to 
U.S. participation in EITI. Drafting and passing legislation is also 
important, and in 2007 we were successful in passing legislation that 
spells out the importance of extractive industries transparency in U.S. 
foreign policy and directs the U.S. State Department to actively 
promote EITI.
  I also co-sponsored legislation that would require oil, gas, and 
mining companies registered with the U.S. Securities and Exchange 
Commission (SEC) to publicly disclose the payments they make to foreign 
governments for the extraction of natural resources. The information 
would be included in financial statements already required by the SEC 
and would apply to both American and foreign companies listed with the 
SEC, which includes 90 percent of the world's largest oil, gas and 
mining companies. I'm hopeful that we will see that legislation pass in 
this Congress.
  Another tool is direct communication with the Executive Branch. One 
thing we have already started discussions with the Obama Administration 
on is how we can play a responsible role--not dominant--in EITI. I 
strongly believe that the best thing we can do to help boost EITI is to 
follow the lead of other OSCE member states such as Azerbaijan, 
Kazakhstan, Kyrgyzstan and Norway and become a Candidate Country with 
the goal of becoming fully compliant with EITI standards. Right now we 
think that can be accomplished without any legislative action by the 
Congress, but if we do need to make some legal changes, then that is 
something we will work on.
  If there is one word that has gotten us in this problem, it is greed. 
This needs to be said so that we as legislators can do something about 
it. As we are talking about hedge funds, and all these other mechanisms 
for moving money, we can't ignore the impact of the shadow economy. It 
is something that we need to address because it fuels crime and 
instability.
  Madam Speaker, in the Dublin meeting there were many opinions about 
the roots of the crisis and potential solutions. However, one clear 
message I took away from that meeting is that we must work together to 
find a global solution to a global crisis.

                          ____________________