Time for Transparency: Coming Clean on Oil, Gas and Mining Revenues

Time for Transparency: Coming Clean on Oil, Gas and Mining Revenues

Global Witness | March 25, 2004
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Governments of resource-rich developing countries often do not provide information about their revenues from natural resources, nor do multinational extractive companies publish information about payments made to the governments of those countries. Such opacity hides billions of dollars worth of financial impropriety, according to this Global Witness report.

"Across the globe, revenues from oil, gas and mining that should be funding sustainable economic development have been misappropriated and mismanaged. This Global Witness report considers five major examples of this problem: Kazakhstan, Congo Brazzaville, Angola, Equatorial Guinea and Nauru. 

In these countries, governments do not provide even basic information about their revenues from natural resources. Nor do oil, mining and gas companies publish any information about payments made to governments. Huge amounts of money are therefore not subject to any oversight and crooked elites can extract all sorts of ‘facilitation payments’ from firms that would probably prefer not to pay bribes. Investigations also reveal that some companies have played a willing role in facilitating off-the-books payments, misappropriation of state assets, and other nefarious activities such as arms shipments, as part of an anti-competitive, under-the-table method of winning business with unaccountable regimes. Ordinary citizens, who often own a country’s resources under its constitution, are thus left without the information to call their governments to account over the management of their revenues. The end result is a litany of corruption, social decay, increased poverty, reinforcement of authoritarian government and political unrest, which can ultimately lead to state failure and the spread of instability across regions. 

In  Equatorial Guinea, oil companies appear keen to do business with the brutal regime of President Obiang Nguema. The country’s government has been tarnished by allegations of corruption, political violence, human rights abuses, and narcotics trafficking. Although the country’s oil boom has resulted in a dramatic increase in GDP, its living standards remain among the worst in Africa. This may be because much of the country’s oil money stays abroad: journalists have recently uncovered evidence that major US oil companies are paying revenues directly into an account under the president’s control at Riggs Bank in downtown Washington DC..."

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