Holding on to Gains in Transparency Legislation
Alexa Smith, Presbyterian Hunger Program
The BBC released a story on August 15, 2013 reporting that Brazil’s Congress has approved a bill that designates all royalties from newly discovered oil fields to education and healthcare.
Oil platform on the sea.
The president proposed these reforms to improve public services after widespread protests erupted in response to rising transport costs. Seventy-five percent of drilling royalties received by the Brazilian government are set to be invested in education and another 25 percent in health.
For now, this appears to be one of the few examples of how natural resource wealth may be used to fund the common good, rather than be siphoned off at the top for corrupt purposes. Nelson Mandela famously stated, “It always seems impossible until it's done.”
Meanwhile, the U.S. Chamber of Commerce, the American Petroleum Institute (API) and factions within the U.S. Congress are working to undo work done by Presbyterians and other allies to help redirect millions of dollars used for corrupt purposes toward alleviating poverty, building infrastructure, as well as schools and clinics in resource-rich nations, through a mandatory reporting standard established in Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
It is called the Cardin-Lugar Provision, named after the two senators who championed the bipartisan provision, Ben Cardin (MD-D) and Richard Lugar, a longtime Republican senator from Illinois who lost his seat in the last election.
To the contrary, the mining industry is not currently opposing the mandatory reporting standard. However, the API and the U.S. Chamber of Commerce filed suit against the regulations developed by the SEC immediately after the rules were released. A July court decision has ordered the SEC to reconsider its ruling and the lack of exemptions for reporting available to companies. The SEC says it will rewrite the foreign payment rule.
Filing mandatory reporting data will also increase accountability for investors by requiring oil, gas and mining companies to report payments to foreign governments for natural resource rights to the Securities & Exchange Commission (SEC) amidst annual reporting. Project-by-project reports can help investors know more about how their money is being used, an important component of responsible investing by people of faith, both corporately and personally.
The European Union passed similar legislation effortlessly this spring. Canada is working on similar provisions, as is Australia.
So what is next in the U.S.?
This fall, Presbyterians will be working to:
- Discern how to respond to the SEC’s efforts to comply with a DC district court order on the rules for Section 1504. The PC (USA) will work alongside the global coalition.
- Talk with Senators about the Mexico Transboundary Hydrocarbons Agreement (HR 1613) that enables a joint effort between the U.S. and Mexico to extract crude oil in the Gulf of Mexico. An amendment to this agreement passed the House in April that exempts any hydrocarbons agreement anywhere in the world from Cardin-Lugar reporting standards. The push was led by Rep. Doc Hastings (R-WA), chair of the House Natural Resources Committee, and opposed by Rep. Peter DeFazio (D-OR) and Rep. Maxine Waters (D-CA). A version of the bill has been introduced in the Senate, without the exemption amendment. Exemptions would undermine progress made by the passage of the Cardin-Lugar Provision.
- Be prepared to respond to other pieces of legislation that seek to undo the Cardin-Lugar Provision.
- Help congregations understand that better reporting standards increase accountability for governments that now siphon off riches in the poorest countries in the world. Resource-rich nations are often fraught with human rights abuses, armed conflict and devastating poverty.
For more information on the Publish What You Pay standard and the Cardin-Lugar provision, go to www.pcusa.org/extractives and watch the PCUSA webinar, Curbing Corruption and Conflict: Next Steps in the Fight to Implement Transparency Law in the Extractives.
Presbyterians who want to join this effort, please contact Alexa Smith, Associate for Joining Hands, at 502-569-5027, or by email.
