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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 995 Introduced in House (IH)]

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 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;
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 receipts 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 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
    Resolved,  That it is the sense of the House of Representatives 
that the Government of the United States should--
            (1) proactively support and participate in the Extractive 
        Industries Transparency Initiative (EITI) and provide technical 
        and financial assistance to assist African countries in 
        implementing EITI or in adopting resource revenue transparency 
        policies;
            (2) work with the international community to develop a 
        monitoring process for nonmining natural resources, such as 
        timber;
            (3) require natural resource extraction companies to 
        disclose natural resource revenue payments on a country-by-
        country basis;
            (4) consider a government's substantive efforts or failure 
        to ensure revenue transparency for critical natural resource 
        sectors when determining country eligibility for relevant 
        United States trade preference programs, such as the African 
        Growth and Opportunity Act, and foreign assistance programs 
        such as the Millennium Challenge Account;
            (5) proactively support disclosure of resource revenues and 
        ex-ante disclosure of foreign investment contracts underpinning 
        extractive sector projects, making such disclosures a condition 
        of support for financing by the United States Overseas Private 
        Investment Corporation and the Export-Import Bank of the United 
        States; and
            (6) work with the international financial institutions to 
        require resource revenue transparency and contract transparency 
        as a condition for lending or assistance to resource-rich 
        developing countries.
                                 <all>
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