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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3389 Introduced in Senate (IS)]

110th CONGRESS
  2d Session
                                S. 3389

To require, for the benefit of shareholders, the disclosure of payments 
  to foreign governments for the extraction of natural resources, to 
  allow such shareholders more appropriately to determine associated 
                                 risks.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 31, 2008

  Mr. Schumer (for himself and Ms. Cantwell) introduced the following 
 bill; which was read twice and referred to the Committee on Banking, 
                       Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
To require, for the benefit of shareholders, the disclosure of payments 
  to foreign governments for the extraction of natural resources, to 
  allow such shareholders more appropriately to determine associated 
                                 risks.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Extractive Industries Transparency 
Disclosure Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Each year corporations pay billions of dollars to 
        foreign governments and their affiliates for natural resources, 
        such as oil, gas, coal, copper, diamonds, and other extracted 
        minerals.
            (2) Developing countries that derive a significant portion 
        of their revenues from natural resource extraction tend to have 
        higher poverty rates, weaker governance, higher rates of 
        conflict, and poorer development records than those countries 
        that do not rely on resource revenues. Since revenues derived 
        from natural resource extraction are often a singular 
        opportunity for some developing countries to structure programs 
        and institutions to broaden the collective and individual 
        wealth of their citizens, it is imperative that the uses of 
        such funds are closely monitored.
            (3) There is a growing consensus among oil, gas, and mining 
        companies that transparency is good for business, since it 
        improves the business climate in which they work and fosters 
        good governance and accountability.
            (4) Transparency benefits shareholders because of their 
        desire to know the amount of such payments in order to assess 
        financial risk, compare payments from country to country, and 
        assess whether such payments help to create a more stable 
        investment climate; moreover, undisclosed payments may be 
        perceived as corrupt and to the detriment of the image of the 
        corporation.
            (5) It is in the United States best interest to promote 
        transparency, since transparency contributes to a better 
        investment climate, a more stable commodity supply, and greater 
        energy security.

SEC. 3. ADDITIONAL ANNUAL REPORT DISCLOSURES REQUIRED.

    (a) Amendment.--Section 13 of the Securities Exchange Act of 1934 
(15 U.S.C. 78m) is amended by adding at the end the following new 
subsection:
    ``(m) Disclosure of Payment for Resource Extraction.--
            ``(1) Disclosures required.--The Commission shall modify 
        the rules prescribed under subsection (b) to require that each 
        issuer required to file an annual report with the Commission 
        shall disclose in such report the total amounts, for each 
        foreign country and for each category of payment for each 
        foreign country, of any and all payments made, directly or 
        indirectly, by the issuer or any of its subsidiaries, to an 
        agency or instrumentality of a foreign government--
                    ``(A) for natural resources in a foreign country; 
                or
                    ``(B) in any connection with the extraction of 
                natural resources from a foreign country.
            ``(2) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Agency or instrumentality of a foreign 
                government.--The term `agency or instrumentality of a 
                foreign government' means--
                            ``(i) a foreign government;
                            ``(ii) a department, ministry, agency, 
                        office, officer, employee, legislator, 
                        representative, subdivision, or agent of a 
                        foreign government;
                            ``(iii) a person that is directly or 
                        indirectly owned, controlled, or employed by 
                        one or more of the persons or entities 
                        described in clause (i) or (ii);
                            ``(iv) an account, trust, or other device 
                        held for the benefit of any of the persons or 
                        entities described in clause (i), (ii), or 
                        (iii); or
                            ``(v) an entity controlled by the state, 
                        such as a state-owned oil company, and its 
                        agents.
                    ``(B) Category of payment.--The term `category of 
                payment', for any payment or transfer, means the 
                category described in any of clauses (i) through (viii) 
                of subparagraph (G) that most closely describes such 
                payment or transfer.
                    ``(C) Extraction.--The term `extraction' means--
                            ``(i) the search for any natural resource, 
                        in its natural deposits and original locations;
                            ``(ii) the acquisition of property rights, 
                        licenses, or properties for the purpose of 
                        further exploration or for the purpose of 
                        removing any natural resource from existing 
                        deposits on those properties, or both;
                            ``(iii) the construction, drilling, and 
                        production activities necessary to retrieve any 
                        natural resource from its natural deposit, and 
                        the acquisition, construction, installation, 
                        and maintenance of field gathering and storage 
                        systems, including lifting any other natural 
                        resource to the surface and gathering, 
                        treating, field processing, and field storage;
                            ``(iv) the transportation of any natural 
                        resource through the territory of any foreign 
                        country by any means;
                            ``(v) the export of any natural resource 
                        from an intermediary country;
                            ``(vi) the acquisition of any concession, 
                        permission, permit, right, or other 
                        authorization from a foreign government 
                        necessary or desirable to conduct any of the 
                        activities described in clauses (i) through 
                        (v); or
                            ``(vii) any combination of the activities 
                        described in clauses (i) through (vi).
                    ``(D) Foreign country.--The term `foreign country' 
                means any country other than the United States.
                    ``(E) Foreign government.--The term `foreign 
                government' means the government of any foreign 
                country.
                    ``(F) Natural resources.--The term `natural 
                resources' means--
                            ``(i) oil and gas reserves, metal ores, 
                        gemstones, industrial materials, and coal; and
                            ``(ii) any other commodity of commercial 
                        value produced by the extraction of natural 
                        resources, in its natural or refined state, 
                        that the Commission shall, by regulation, 
                        determine should be subject to the reporting 
                        requirements of this subsection in order to 
                        carry out the purposes of this subsection due 
                        to the significance of the amounts being paid 
                        therefor by one or more issuers.
                    ``(G) Payments.--The term `payments' means any 
                transfer or payment of any kind, either direct or 
                indirect, and irrespective of the amount, and in any 
                form whatsoever, including--
                            ``(i) host government's production 
                        entitlements;
                            ``(ii) national state-owned company 
                        production entitlements;
                            ``(iii) profits taxes;
                            ``(iv) royalties;
                            ``(v) dividends;
                            ``(vi) bonuses (such as signature, 
                        discovery, or production bonuses);
                            ``(vii) license fees, rental fees, entry 
                        fees, and other considerations for licenses or 
                        concessions; and
                            ``(viii) other benefits to the foreign 
                        government or the agency or instrumentality of 
                        the foreign government that have a value of not 
                        less that $100,000.''.
    (b) Deadline.--The Securities and Exchange Commission shall 
prescribe the modifications to its rules required by section 13(m) of 
the Securities Exchange Act of 1934 (as added by the amendment made by 
subsection (a) of this section) not later than 90 days after the date 
of enactment of this Act, and shall make such modifications effective 
with respect to the annual reports of issuers with respect to the 
fiscal years of issuers ending on or after January 1, 2009.
    (c) Public Availability of Information.--The Securities and 
Exchange Commission shall, by rule or regulation, provide that the 
information filed by all issuers pursuant to such section 13(m) be 
compiled so that it is accessible by the public directly, and in a 
compiled format, from the website of the Commission without separately 
accessing on the EDGAR system the annual reports of each issuer filing 
such information.
                                 <all>
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