Oil companies: Against corruption, for transparency. At least, that was the testimony as the U.S. Congress debated a bill that would require oil, gas & mining companies to disclose their dealings with foreign governments.
I went to the hearing at the House Financial Services Committee related to the new Bill, H.R. 6066, requiring private oil, gas and mining companies to publish their payments to governments. As expected, all witnesses and members of the committee who attended support the bill, except one of the members who asked a couple of good questions concerning the competitiveness of American companies obliged to disclose vs. those (mainly Chinese) companies that are not.
In my opinion, the best part of the hearing was the exchange between the members of the committee and Alan Detheridge, former Vice President of Shell (Dutch). He says that transparency is going to help companies and the industry, which are often accused of exploiting poor countries when in reality, they are transferring a lot of money to governments. Especially in countries with corrupt dictatorships, the companies would be better off publishing the amount of money they are transferring to the governments. He gave some examples in Nigeria or Angola when the governments did not want Shell to publish anything and threaten the companies who were pursuing transparency to kick them out.
However, there is still one important question pending (not well answered by this witness): if transparency is going to help companies, why they don’t want to disclose their payments? Few members pointed out that a company without a disclosure obligation would be at a disadvantage against those who don’t have to do so. On the other hand, a witness from Revenue Watch gave an example of a Swedish company that had to disclose information in Angola and even though the Angolan government did not want them to do so, the Swedish government required them to do it. That didn’t affect their business.
Another interesting discussion was related to sanctions. The bill does not include any civil or criminal penalty. A member of the committee insisted in the need to have sanction mechanisms otherwise nobody will comply with the law. The same witness mentioned above said that reputation is important for companies and he thinks that at least American and European companies will comply with the law.
— by Denise Ledgard —