Big oil fighting to keep Angolans in the dark
Battle over US Dodd-Frank oil revenue rules
A new global transparency standard for oil and mining industry revenues promises to bring transformative benefits to citizens across the world – but not in Angola, if big oil in the USA gets its way.
The Cardin-Lugar provision within the US Dodd-Frank Act and the new European Union’s Accounting and Transparency Directives form the cornerstones of the new standard – and are intended to increase transparency and accountability, reduce corruption in the natural resource sector, mobilise revenues for development, alleviate poverty and create a more stable investment climate.
At their heart is the requirement for companies to publish detailed information about the hundreds of billions of dollars in revenue payments they make to governments across the world each year through taxes, royalties and signature bonuses, which will permit greater scrutiny of the industry and help citizens to ‘follow the money’.
However, if a powerful and coordinated push by some major oil companies to exclude Angola from the US law is successful then citizens, parliamentarians, civil society groups, anti-corruption agencies, tax authorities and journalists in Angola will be denied the benefits that greater transparency and accountability will bring.
And with the US Securities and Exchange Commission set to review the implementing rules for the Cardin-Lugar provision in the near future, it is crucial for civil society organisations in Angola – and elsewhere – to raise their voices to ensure that the new draft does not exempt any countries from the law, particularly countries such as Angola that are so dependent on oil revenues.
Since Angola derived 79 percent of all government revenue from the oil industry in 2011, exclusion from the US law would deny Angolans a vital tool for increasing transparency and accountability – both of which are crucial to eradicating poverty.
Under the US and EU legislation, international oil companies operating in Angola – including Chevron, BP, Statoil, Total, ExxonMobil, Cobalt, Tullow, Repsol, Petrobras, Marathon and Vaalco – will be required to disclose the payments they make to the Angolan government that arise from each individual project they invest in. The laws also apply to mining companies.
All subsidiaries and firms under the control of companies covered by the US and EU law will also be required to report payments at the project level, including payments that arise from Joint Ventures and Production Sharing Agreements – even if other partner companies involved in the projects are not covered directly by the legislation.
However, the American Petroleum Institute (API), an oil industry lobby group that boasts very deep pockets and wields serious influence in America’s corridors of political power, claims that certain countries, including Angola, have national laws that ban the disclosure of revenue payments and that companies should not, therefore, have to report payments in those countries.
But while Angolan law states that ‘all finance related information provided by oil companies should be confidential’, the template for Angola’s Production Sharing Agreements does allow for the disclosure of financial information if it is required by any other applicable law or regulation, including foreign stock market listing requirements.
Given this, the US government should reject this argument. But even if it does, the API is lobbying to ensure that the US rules only require compilations of the payment data to be published, instead of detailed disclosures from each individual project. And, negating the whole point of the legislation, the API also wants no companies to be named in the disclosures so that payments cannot be attributed to specific firms.
These amendments would ensure that even if Angola were included in the US rules, the data published would be rendered far less useful and – in most cases – completely useless for Angolan citizens.
Now is the time for people to speak up – to ensure that American officials involved in reviewing the rules hear both sides of the story. And side with transparency and accountability as opposed to secrecy and corruption.
The attached briefing outlines the benefits of the current law and why the oil companies’ arguments do not stand up to genuine scrutiny.