West Africa Rising: Can oil and transparency mix?
Beginning April 15, the Securities and Exchange Commission (SEC) will demand that oil and mining companies reveal all payments made to foreign governments. Top companies want exemptions in West Africa.
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Buried inside last year's US financial reform act lurks a thorny 800-word section that would force oil companies, mining conglomerates, and West African governments to do exactly what none of them is prone to do: Tell the world what happens to the billions of dollars that oil and mining companies spend, give, and lose in their dealings with often corrupt foreign governments.
Meet Section 1504: the "Disclosure of Payments By Resource Extraction Issuers Section." It would demand an annual report on the "type and total amount" of payments made to foreign governments by all oil and mining outfits that sell their shares on an American stock exchange.
Or it will, rather, just as soon as the US Securities and Exchange Commission (SEC) turns it into a "rule" by April 15.
In between now and then? The planet's top gold diggers and oil drillers are lobbying to have professional phrase-benders at the SEC include a clause exempting at least two of West Africa's top oil (and graft) producing nations from the law – because countries in this frustratingly corrupt region had the foresight to pass anti-transparency laws.
"As its written, the law would require the disclosure of billions of dollars of payments a year throughout the West African region," Ian Gary of policy group Oxfam America says in an interview in Dakar.
The law would demand financial records from the US-listed companies that together pump 1.7 million barrels of the 2 million barrels of oil that Angola yields daily, he says, as well as the "vast majority of oil production in Nigeria." (Angola was ranked the world's 11th most corrupt nation in 2010 by Transparency International.)
But Section 1504 would also make those companies into criminals – or so the oil and mine set argues. The lobby contends they're being trapped between American laws that demand transparency and West African laws that ban it.