Ben Quinn
 |
| Donald Trump prepares to sign an executive order. Equatorial Guinea could be among the countries to suffer if the Cardin-Lugar amendment is axed. Photograph: Pablo Martinez Monsivais/AP |
Move would sweep away regulations designed to prevent US extraction firms from making secret payments to access natural resources abroad
It is an oil-rich country with an impoverished populace, home to Africa’s longest serving dictator and a small, self-seeking elite whose excesses are epitomised by the president’s son and deputy, a playboy with a penchant for luxurious cars and crystal-studded Michael Jackson memorabilia.
Small wonder, then, that Equatorial Guinea is widely regarded as a model example of the need for transparency regulations designed to prevent US extraction firms making undisclosed payments to foreign governments for access to natural resources – regulations that Donald Trump is preparing to axe before their planned introduction in 2019.
The US president is expected to sign a resolution doing away with the “Cardin-Lugar regulations” – named after the politicians who created it – after Washington DC’s Republican Senate voted to nullify the anti-corruption initiative.
Part of the Dodd-Frank financial reform bill, currently under review by the Trump administration, the provisions also require declarations on data including revenues.
“It really was in many ways a new model for being able to monitor illicit financial flows and why so much revenue was being lost in resource-rich countries in the developing world,” said Eric LeCompte, executive director of the religious development group Jubilee USA and one of the original drafters of the provision.
“Equatorial Guinea is a place where you can really see the impact of this and why Cardin-Lugar is needed. It’s actually one of the most resource-rich countries in the world. It should be like Singapore in terms of how they have dealt with their resources, yet three-quarters of their population live in poverty.”
Under the stewardship of Rex Tillerson, who has since been appointed US secretary of state, the US oil and gas multinational ExxonMobil – Equatorial Guinea’s largest oil producer – signed a major exploration agreement with the country’s government two years ago, a venture described by one government minister as “the start of a new adventure between old acquaintances”.
As many as 120 energy companies including BP, Shell, Total and Gazprom have reported payments to foreign governments under UK, Canadian, French and Norwegian laws, according to the Natural Resource Governance Institute (NRGI). Payments worth a total of $150bn (£119.5bn) have been recorded to governments in 102 countries.
Joseph Williams, senior advocacy officer at the NRGI, said one round of reporting had already taken place in the UK and France under European rules, while companies have started reporting under the Canadian legislation, covering the large number of energy firms on the Toronto stock exchange. Many companies listed on the New York stock exchange are also dual-listed in Canada, London or Paris.
“But you do have quite a few – the estimation is 425 companies on US stock exchanges – who, as a result of the provisions being rolled back, do not have a current requirement in the future to report their payments to governments,” said Williams.
Among such companies are ExxonMobil and Chevron, two of the world’s largest.
Extractive firms have disclosed more than $100bn in payments under the UK rules, with no ill effects for the companies, according to campaigners at Global Witness, who described the Trump administration’s move as “an astonishing gift to the American oil lobby”.
“We want the UK to maintain its position as a global leader in oil industry transparency, and it must not go down the pro-corruption road that the US is currently taking,” said Dominic Eagleton, a senior campaigner at the group.
 |
| Laundry hangs in a yard in Malabo, Equatorial Guinea, as the gleaming HQ of the national oil company stands tall in the background. Photograph: Rebecca Blackwell/AP |
Mukasiri Sibanda, of the Zimbabwean Environmental Law Association, highlighted the importance for developing countries of regulations such as Cardin-Lugar, the scrapping of which he branded “thoughtless and regressive”.
“Citizens and civil society organisations are generally starved of information critical to hold to account government and mining companies on the management and utilisation of the country’s abundant mineral wealth,” said Sibanda.
“By doing so, the US is showing resource-rich countries – especially developing countries – that we cannot help you to fight thieves that are looting your resources.”
Civil society organisations in the Philippines have used transparency data to push for legislation obliging extraction firms to disclose vital information about the beneficial owners of mining and other interests
Drawing on data published by the multi-stakeholder Extractive Industries Transparency Initiative (EITI), Bantay Kita highlighted figures showing that large-scale miners paid just 5.4bn Philippine pesos (£86m) to the government, a sum the organisation said was equivalent to just 0.003% of total state revenues in 2013. Critics of the initiative claim that firms have embraced it safe in the knowledge that there are no sanctions should they fail to abide by its reporting requirements.
However, it provides some data at least for operations in countries such as Nigeria, where the initiative has been signed into law. The latest available figures for payments to Nigeria, for instance, which date from 2014, show Chevron paid $1.3bn and ExxonMobil $5.5bn.
EITI members have been divided on Cardin-Lugar. The head of its secretariat, Jonas Moberg, said that there was much to do to ensure countries benefited from their natural resources, adding that the EITI saw itself as complimenting mandatory disclosure requirements.
“There needs to be different ways of assisting communities to really use the information and to bring accountability, for example by facilitating dialogue between government and civil society,” Moberg said.
He added that, despite the absence of sanctions, an increasing number of countries were enshrining EITI provisions in law.
Last month, when it was put to Tillerson by Democratic senator Jeff Merkley that Teodoro Obiang Nguema Mbasogo, Equatorial Guinea’s president, had become “exceedingly rich” partly as a result of payments made by ExxonMobil, Tillerson – avoiding mention of the country’s name – replied: “In ExxonMobil’s engagement in countries like this, I do think that on the whole there are positive benefits to the people of the country in terms of job creation that occurs because of the activity. I am not in any way suggesting that that mitigates the corruption that occurs, but it is not without benefit.”
The Trump administration has meanwhile prepared a new executive order that would extinguish regulatory controls designed to prevent US companies profiting from and encouraging the spread of “conflict minerals” that are inflaming violence in Congo.
The draft order, obtained by the Guardian, proposes a two-year suspension of a portion of the Dodd-Frank financial reforms that require US firms to carry out due diligence to ensure the products they sell do not include minerals mined in the Democratic Republic of the Congo or neighbouring countries.
No comments:
Post a Comment