Promote Transparency and Accountability through the Publish What You Pay Campaign
The Resource Curse
All too frequently, countries rich in natural resources are plagued by dire poverty, environmental devastation, and violent conflict. This is known as the resource curse. In most countries around the world, sub-soil resources such as minerals, gas, and oil are the property of the nation. However, the ways that the region, community, and nation divide the benefits of these resources can be highly controversial. Citizens have a right to know how much their government is selling their resources for and resources should be used to lift citizens out of poverty.
Instead, when oil, gas, or minerals are discovered, the gap between the rich and the poor actually tends to widen. In 2006 the International Monetary Fund reported that in Equatorial Guinea, a country rich in oil, more than three-quarters of the population was living below the poverty line. While the majority of citizens in this country struggle to survive, the son of the country’s president, Mr. Obiang, owns mansions in Malibu and filters millions of dollars into US banks.
In the U.S., the resource curse has been felt in Appalachia, an area rich in natural resources that is often referred to as coal country. The coal-mining activities in Appalachia have brought little long term benefit for the people of the region but have rendered them dependent on a few powerful companies for jobs and support.
Good governance is imperative to the management of natural resource extraction and export. This can only be achieved if local communities armed with crucial information about revenue streams can hold their governments accountable.
The Movement for Transparency
The Sierra Club has joined a global civil society coalition called Publish What You Pay. The coalition works to help citizens from resource-rich countries hold their governments accountable for the management of revenues from the oil, gas, and mining industries.
Here in the U.S. a bipartisan group of U.S. Senators joined together in introducing S.B. 1700, the Energy Security Through Transparency Act (ESTT). The Sierra Club, as part of the Publish What You Pay Coalition, is working to pass the ESTT, which will require companies to disclose any payments they make to a foreign government for the purpose of the commercial development of oil, natural gas, or minerals. This will close a critical gap in information and lead to increased government and corporate accountability.
The ESTT will set an international standard for transparency by requiring disclosure from all companies that file with the Securities and Exchange Commission (SEC), regardless of where they are based, which is nearly all internationally competitive oil, gas, and mining companies. The ESTT requires payments for extractive industry contracts to be reported in a disaggregated way — by company, by country, and by type of payment so that citizens have a clear understanding of what money their governments are receiving.
The legislation will also improve reporting here at home. Although the Minerals Management Service, a bureau within the Department of the Interior, has been established for managing revenues associated with mineral leases, there remains room for better management and stricter enforcement.
Seeing the Significance
This law will…
– Set a new international standard for corporate and government responsibility
– Empower communities around the world and here at home by giving them direct access to the critical information necessary to defend their land from environmental degradation and irresponsible extraction of natural resources
– Ensure accountability of governments to implement better environmental practices and better resource management
The Impact on the Environment
Fossil fuels – coal, oil and gas – cover about 80 percent of the world’s energy supply and are the most significant source of greenhouse gases (GHG), leading to an overall rise of global temperatures and the disruption of natural climate patterns. Coal alone contributes to 20-25% of the world wide climate change.
Much of the greenhouse gas emissions of oil production is caused by gas flaring, the burning of natural gas that is produced along with oil during oil production. According to the World Bank, gas flaring in Nigeria, which generates no useful energy, has contributed more greenhouse gas emissions than all other sources in sub-Saharan Africa combined.
It is essential that citizens urge their governments to limit the irresponsible extraction of natural resources and manage their natural resources wisely. Citizens are unable to hold their governments accountable without information on the payments their governments take for these resources.
The Effects on Communities
In 1958, Shell began oil production in the Niger delta region of Nigeria. Shell’s presence brought with it environmental devastation, poverty, and severe human rights abuses.
An estimated 1.5 million tons of oil has spilled in the Niger Delta ecosystem over the past 50 years. This amount is equivalent to about one “Exxon Valdez” spill in the Niger Delta every year.
Spurred by the degradation of their land and the destruction of their traditional livelihoods of farming and fishing, the Ogoni people built a peaceful movement to prevent Shell and the Nigerian government from further exploiting their community and their land.
Retaliation from the government and Shell came in a brutal wave. The military government falsely accused nine Ogoni activists of murder and bribed witnesses to give false testimony, including the founder of The Movement for the Survival of the Ogoni People, Ken Saro-Wiwa. On November 10, 1995, the accused were hung. One month after the executions, Shell signed an agreement to invest $4 billion in a liquefied natural gas project in Nigeria.
Human rights attorneys filed a law suit to hold Shell accountable for the abuses. After thirteen years of fighting the charges, Shell was forced to settle on accounts of complicity in the torture and killing of Ken Saro-Wiwa and the other Ogoni leaders for $15.5 million. Although this was a historic victory, the lives of these men and the condition of the once self-sustaining and peaceful community cannot be restored with these funds.