IV 

109TH CONGRESS 

2D SESSION H. RES. 995 

Promoting transparency of natural resource revenues in resource-rich developing countries to help combat corruption, encouraging democracy and 

accountable government in such countries, and ensuring energy security 

through a more stable operating environment in such countries. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 12, 2006 

Mr. SMITH of New Jersey (for himself and Ms. WATSON) submitted the following resolution; which was referred to the Committee on International 

Relations, and in addition to the Committees on Financial Services and 

Ways and Means, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

RESOLUTION 

Promoting transparency of natural resource revenues in resource-rich developing countries to help combat corruption, encouraging democracy and accountable government 

in such countries, and ensuring energy security through 

a more stable operating environment in such countries. 

Whereas, according to Freedom House rankings of freedom 

in the world, among the top ten petroleum exporting nations of the world, only Mexico and Norway can be considered free, democratic nations, while the others—Kuwait, Nigeria, Venezuela, Algeria, Iran, Russia, Saudi 


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Arabia, and the United Arab Emirates—exhibit limited 

elements of democracy; 

Whereas mismanagement and misappropriation of billions of 

dollars worth of revenues from the extraction of natural 

resources have occurred in some resource-rich African 

countries and such funds have ended up in the hands of 

autocratic rulers who are less than accountable to their 

citizens, ultimately contributing to the problems of political instability and weak and failing states; 

Whereas in many resource-rich African countries multinational extractive companies are not required to publish 

information about payments made to host governments, 

and governments do not make information available to 

their citizens about the revenues they have received from 

such companies; 

Whereas such opacity has resulted in billions of dollars worth 

of financial impropriety, facilitating embezzlement, corruption, and revenue misappropriation; 

Whereas African oil producers currently provide as much as 

a quarter of America’s oil supplies, and stable, transparent, and accountable African producers will be the key 

guarantors of future energy supplies to the United 

States; 

Whereas many companies working in the extractive industries 

have seen their legitimate revenues misappropriated and 

squandered in countries in which revenue flows are not 

transparent, leaving such companies vulnerable to accusations of complicity with corruption and undermining the 

social legitimacy and political stability that protect the 

operations of such companies; 


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Whereas in Equatorial Guinea, the country’s oil boom has led 

to a significant increase in its gross domestic product 

(GDP), while its living standards remain among the 

worst in Africa and much of the country’s oil revenues 

remain unaccounted for due to a lack of transparency 

that places oil companies at risk of being seen as 

complicit with this corruption; 

Whereas one in four children in Angola have died before the 

age of five in a country in which one in four dollars of 

oil revenues have gone unaccounted for throughout much 

of the last decade; 

Whereas despite current high oil prices, Gabon is experiencing serious economic hardships due to ill-advised borrowing for construction during a previous low point in oil 

prices, leaving half the income of the Gabonese Government committed to interest payments at a time of rising 

unemployment; 

Whereas, according to the nongovernmental organization 

Publish What You Pay, approximately $300 million in oil 

revenues of Congo (Brazzaville) identified by independent 

auditors in 2005 did not show up in the budgets of 

Congo (Brazzaville); 

Whereas the mismanagement of natural resource revenues in 

resource-rich developing countries often results in the 

taxpayers of the United States and other countries providing more aid to such resource-rich developing countries to compensate for the failure of such countries to 

provide basic services; 

Whereas resource revenue transparency, where companies 

publicly disclose all payments made to governments for 

natural resource extraction and governments publish reVerDate Aug 31 2005 23:22 Sep 13, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6300 E:\BILLS\HR995.IH HR995

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ceipts of such payments, is a crucial first step to combating corruption and ensuring that revenues from natural resource extraction benefit the citizens of such countries; 

Whereas disclosure of foreign investment contracts such as 

production sharing agreements (PSAs), host government 

agreements (HGAs), and other similar agreements contain the formulas necessary to calculate the amount and 

distribution of revenues generated from extractive 

projects and are policy-setting documents that often establish social and environmental conditions under which 

such projects operate; 

Whereas the disclosure of such contracts is also necessary to 

root out corruption and to determine the social and environmental impacts of a project and whether it will contribute to development and poverty reduction; 

Whereas the Extractive Industries Transparency Initiative 

(EITI), an international agreement supported by the 

Group of Eight (G–8) nations, is working toward ensuring that the revenues from natural resource extraction 

are more transparent and more accountably managed; 

Whereas the EITI has the support and participation of a 

wide group of stakeholders, including the World Bank, 

the International Monetary Fund, approximately 20 developing countries (including four African countries which 

are implementing the EITI), civil society, major international companies, and international investors; 

Whereas the major oil, gas, and mining companies and leading investors representing $8 trillion in assets have recognized the important role that resource revenue transparency plays in creating a stable operating environment 


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and have been actively involved and publicly stated their 

support for resource revenue transparency and the EITI; 

Whereas the G–8 nations, meeting in Gleneagles, Scotland, 

from July 6–8, 2005, stated: ‘‘We call on African resource-rich countries to implement EITI or similar principles of transparency and on the World Bank, IMF and 

regional development banks to support them. We support 

the development of appropriate criteria for validating 

EITI implementation.’’; 

Whereas the International Monetary Fund’s Guide on Resource Revenue Transparency states that ‘‘given these 

potentially substantial costs of nontransparent practices, 

it is estimated that institutional strengthening to improve 

transparency in vulnerable resource-rich countries should 

provide an ample pay-off for relatively modest investment’’; 

Whereas the United States Department of the Treasury 

statement regarding the World Bank’s Extractive Industries Review states: ‘‘We believe financial assistance 

should be predicated upon the government of a country 

where a project is located having in place, or committing 

to establish, a functioning system for accounting for revenues and expenditures.’’; 

Whereas United States trade preference programs, such as 

the African Growth and Opportunity Act (AGOA), include eligibility criteria that relate to combating corruption; and 

Whereas transparency will contribute to the best interests of 

everyone concerned: citizens, companies, investors, governments, and the greater international community: Now, 

therefore, be it 


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1 Resolved, That it is the sense of the House of Rep2 resentatives that the Government of the United States 

3 should— 

4 (1) proactively support and participate in the 

5 Extractive Industries Transparency Initiative (EITI) 

6 and provide technical and financial assistance to as7 sist African countries in implementing EITI or in 

8 adopting resource revenue transparency policies; 

9 (2) work with the international community to 

10 develop a monitoring process for nonmining natural 

11 resources, such as timber; 

12 (3) require natural resource extraction compa13 nies to disclose natural resource revenue payments 

14 on a country-by-country basis; 

15 (4) consider a government’s substantive efforts 

16 or failure to ensure revenue transparency for critical 

17 natural resource sectors when determining country 

18 eligibility for relevant United States trade preference 

19 programs, such as the African Growth and Oppor20 tunity Act, and foreign assistance programs such as 

21 the Millennium Challenge Account; 

22 (5) proactively support disclosure of resource 

23 revenues and ex-ante disclosure of foreign invest24 ment contracts underpinning extractive sector 

25 projects, making such disclosures a condition of supVerDate Aug 31 2005 23:22 Sep 13, 2006 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\HR995.IH HR995

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1 port for financing by the United States Overseas 

2 Private Investment Corporation and the Export-Im3 port Bank of the United States; and 

4 (6) work with the international financial insti5 tutions to require resource revenue transparency and 

6 contract transparency as a condition for lending or 

7 assistance to resource-rich developing countries. 

Æ 


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