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Washington, DC - House Financial Services Chairman Barney Frank (D-MA) today introduced H.R. 6066, the Extractive Industries Transparency Disclosure Act. The legislation would require oil, gas, and mining companies listed on U.S. exchanges to publicly disclose the payments they make to the governments of the countries from which those resources are extracted. This disclosure requirement benefits both corporate shareholders as well as the citizens of the host countries where the extraction occurs. The information will allow shareholders to make better informed assessments of opportunity costs, threats to corporate reputation, comparative extraction costs, and long-term prospects of the companies in which they invest.
“In too many countries, the discovery of valuable natural resources has led to more harm than good. This legislation is an important step towards preventing this situation from either continuing or occurring in the first place. The principle that the people of a country ought to know what revenue is being generated by their country’s resources shouldn’t be a controversial one, and I look forward to speedy passage of this bill,” said Chairman Frank.
Over fifty developing countries can be characterized as “resource rich,” and they are home to two-thirds of the world’s poor. Most of these countries have a limited opportunity to use their natural resource wealth to help alleviate poverty, and that opportunity is often squandered by a complex development phenomenon that has come to be known as the “resource course” or “paradox of plenty” – wherein many developing countries rich in oil, gas, or mineral resources often experience higher poverty rates, weaker governance, greater conflict, and slower development than non-resource rich countries, with many ranking near the bottom of most measures of human development.
Resource revenue transparency will help enable citizens of resource-rich countries to hold their governments more accountable and better equipped to ensure that their country’s natural resource wealth is used wisely for the benefit of the nation and for future generations. This form of transparency, in conjunction with an increasing active civil society, also promises to help create more stable, democratic governments.
H.R. 6066 is continuous with the Committee’s ongoing efforts to increase the power of individual shareholders, and it also provides the many companies who view corporate social responsibility as an important value a means by which to further that goal.
Click Here for a link to H.R. 6066
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