[Graeme]

Era of Big Oil Secrecy is Over

Earlier this month, the European Union (EU) took a decisive step towards transparency: It agreed to mandate publicly-listed European companies as well as large private firms to disclose their payments to governments for oil, gas and mining projects. This transparency is crucial in the fight for better governance of resource-rich countries. It will empower citizens with information about the amount of money their governments receive, helping them to monitor how this money is ultimately used and to deter corruption.

Opacity has long ties with corruption, and both are detrimental to growth. Our research shows that countries that control corruption and improve governance can triple their incomes per capita in the long term - a 300% dividend. As seen in the figure, this good governance dividend also applies to countries rich in natural resources.

The benefits of transparency dwarf the cost of disclosure. Today about 40 percent of the 1.7 billion people in resource-rich countries live in poverty, making less than $2 a day. Such poverty in the midst of immense resource wealth is due to low standards of governance and transparency, a critical issue for which oil and mining companies are also responsible.

The EU rules are part of the international community’s response to the opacity challenge, and are modeled after U.S. rules the Securities and Exchange Commission (SEC) released last August to implement the Cardin-Lugar amendment of the 2010 Dodd-Frank Act.

This move towards mandatory disclosure in two of the world’s largest capital markets signals what European Commissioner Michel Barnier has called a “new era of transparency.”

BIG OIL BATTLES NEW RULES

The emergence of this new global standard, however, does not mean the campaign for revenue transparency is over. While the transparency train has clearly left the station, not everyone is on board. Major multinational oil companies have been trying to water down these requirements on both sides of the Atlantic. These companies have put their reputations in jeopardy by backing the American Petroleum Institute (API) in its lawsuit against the SEC to stop implementation of the U.S. rules. Now that the EU has joined the drive for disclosure, Big Oil faces a major problem in its assault on transparency.

brookings

[ROCKMAN]

Graeme – Not criticizing the effort but just questioning if there is any real chance for the significant changes they theorize in those resource exporting countries. From my one experience seeing that level of corruption/abuse first hand in Equatorial Guinea no amount of public disclosure will make any difference there. Disagreeing with their homicidal dictator isn’t going to change matters for the locals other than a quick death sentence without a trial. El Presidente changed the constitution to make such actions “legal”. Perhaps in more democratic regions it might make some difference but I just don’t see the potential for significant change anytime soon.

The EU politicians might want the company activities more transparent but they don’t seem anxious to advertise they send a check every month to El Presidente of EG for tens of $millions while he starves the vast majority of the population…one of the richest per capita income groups on the planet. Again, as I said in my other post: a lot of style but little substance IMHO. Maybe the move helps relieve some EU guilt over financing one more African dictator. Perhaps that may be the biggest benefit in the end.

As far as Big Oil facing “…a major problem in its assault on transparency” I doubt any of them are losing any sleep over the new EU rules. I’ve lived in this system for almost 4 decades and despite press release to the otherwise, I don’t think any of them really care one way or the other. There’s the PR spin and then there’s what they say over lunch.

[ROCKMAN]

Duplicate

[SeaGypsy]

Mining in particular is extremely vital to governments in countries with endemic corruption. Where everyone from the local baker to the Provincial Governors is cooking the books and scamming every possible cent, centralized sources of income are virtually the only sources. A gang of goons with guns can keep tabs on a weigh station, a route to a port, the port itself. The money does not need to be collected at the micro level (already being milked by local sub authorities), as Rockman says, it comes in the multi millions bank transfers direct to the National Authority. This happens whether there is a facade of democracy or blatant dictatorship.

(example: Democratic Philippines)

Asked to explain why environmental activists have become targets of assassinations, Dulce said that the nature of environmental activism itself puts its advocates in direct conflict with powerful entities who have financial interests over projects widely perceived to be harmful to the environment.

Out of the 56 cases of environmentalist killings, five cases involved advocates against large dams, one coal-fired power plant activist, six anti-logging activists, one anti-landfill campaigner, and four conservation advocates, according to Kalikasan-PNE.

Opposing mining has proven to be the most fatal advocacy for an environmental activist in the country, accounting for 46 cases or 79 percent of the total number of killings of environmental activists, according to a July 2012 report of Kalikasan-PNE.

http://www.manilatimes.net/index.php/ne ... atch-group

http://www.causes.com/actions/1719704-j ... nvironment

[ROCKMAN]

SeaGypsy – Even exploration geologists aren’t immune to “accidents”. Some years ago a geologist working mining operations in Indonesia was perhaps thought to have done a little ‘salting’ of some samples. Apparently feeling such great remorse over his misdeeds he “committed suicide” by jumping out of a govt helicopter. Scape goats are very handy especially when they aren’t around to deny the accusations.

And back on that Equatorial Guinea issue: not to lay all the stink just on the EU but despite the moral high ground of the Cardin-Lugar amendment of the 2010 Dodd-Frank Act at the same time ExxonMobil was the big player over with the other half of EG’s oil coming to the US. But at least our end of the deal was transparent. Which didn’t make much difference to the poor folks in the country.