The Senate last week approved a measure that will greatly benefit the cause of resource transparency in Africa and elsewhere in the world. The House of Representatives passed the measure last month, which now awaits President Barack Obama’s signature. Once he does, the provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act (also known as the Financial Reform Act) will help reduce corruption by forcing oil, gas and mining companies registered with the Securities and Exchange Commission to publicly disclose their tax and revenue payments to governments in countries in which they operate. There are numerous beneficiaries to this legislation.
First, the officials fighting corruption will have access to information comparing what companies have paid governments to what governments report. Billions of dollars have been stolen by corrupt government officials who underreport what companies have paid them. Now those engaged in the battle against corruption have more ammunition, making it easier for cases to be prosecuted against those who plunder their country’s natural resources.
Second, the American companies who make their tax and revenue payments to governments will be able to demonstrate to the people of the countries in which they operate that they have contributed to the common good. Too often, corrupt officials claim that companies have withheld payments as justification for not carrying through with promised social investments. By being required to reveal their contributions, American companies can justify their revelations as forced by U.S. law. Hopefully, other foreign companies will follow this practice and not place American companies at a competitive disadvantage.
Third, civil society organizations and the media who attempt to reveal corrupt government practices involving natural resources now have access to a public source of information that cannot be denied to them by corrupt officials protecting their schemes. Honest government officials who have provided such information have risked their careers and their lives for divulging such information. Now the media and civil society organizations can point to an international source for the information they cite.
Fourth, donors will have more accurate information on which to base decisions about which governments deserve and truly need development assistance. Without the information provided by this legislation, African governments have claimed to be more cash-poor than they really are, forcing American taxpayers and other foreign sources to meet the needs of African citizens that their governments could well afford to meet on their own.
Finally, the citizens of natural resource-rich countries have greater hope that their governments will use revenues from these resources to build roads, hospitals and schools and provide a real safety net for those citizens who need government help. Too often, it has been a hollow hope that paths will be turned into roads, the ill will find medical treatment and the young will have access to education. Resource-rich countries have failed to make progress toward reaching the Millennium Development Goals largely because available funding is diverted for selfish purposes.
This has been as long time in coming. Back in 2006, then-Africa Subcommittee Chairman Chris Smith, along with Congresswoman Diane Watson, introduced a resolution calling for transparency of natural resources in resource-rich countries. However, at the time, pressure from the corporate community led the Republican-controlled House to shelve the measure despite support in Congress. This time, Senators Benjamin Cardin (D-MD), Richard Lugar (R-IN), Richard Durbin (D-IL), Sam Brownback (R-KS) and other Senators, as well as Representatives Barney Frank (D-MA), Howard Berman (D-CA) and Jim McDermott (D-WA) refused to let this opportunity pass them by.
Even before he was elected, President Obama has stressed the need for transparency among governments who seek our help. Now his administration and Congress have the information required to make sound judgments on justified foreign aid.
It is said that information is power, but in this case, information represents money not wasted, not stolen and not denied African people who have deserved better from their governments for so long.