by Alison Raphael

WASHINGTON, Sep 25 (OneWorld) - It's time to shed light on the way U.S. companies in charge of oil, gas, and mining operations in developing countries are spending their money, according to testimony at two Capitol Hill hearings Wednesday.

Many countries with vast oil and mineral wealth experience a "resource curse," because "competition for control of these resources has more often fuelled corruption and inequality than growth and development," said Sen. Russ Feingold of Wisconsin, speaking at the Senate Foreign Relations Committee's Africa Subcommittee.

In Burma, Nigeria, and Angola, for example, local communities remain impoverished while governments accumulate profits from contracts with U.S. corporations such as Chevron, which has oil production arrangements with all three governments.

In addition, local military hired as "security" for oil operations routinely violate the human rights of local villagers, who also suffer the consequences of environmental destruction resulting from oil production, according to the testimony of activists from two of the countries before the Senate Judiciary subcommittee on Human Rights and the Law.

Congress is currently considering legislation that would require all oil, gas, and mining companies to publicly disclose, in their reports to the Securities and Exchange Commission, how much they pay to foreign governments for extracting natural resources.

The Extractive Industries Transparency Disclosure Act (EITDA), introduced last month by Sen. Charles Schumer of New York, is receiving enthusiastic support from a coalition of 25 U.S.-based non-governmental organizations convinced that regulation is the only way to monitor the behavior of these firms.

Since 2000, when a set of "Voluntary Principles on Security and Human Rights" was introduced by the State Department, corruption, rights abuses, and environmental destruction have continued, and even accelerated, according to speakers at the Judiciary subcommittee hearing.

In Nigeria, for example, the widespread practices of gas "flaring" (burning off excess gas) creates a health hazard for local residents and their homes, and careless production techniques have polluted wetlands and rivers, killing fish and vegetation and destroying livelihoods, according to Nnimmo Bassey of Nigeria's Environmental Rights Action.

Bassey said the Voluntary Principles have "failed to work on the ground" in Nigeria.

In Burma, where Chevron has a contract with the ruling military junta, soldiers providing security for the company's operations along the Yadana pipeline use villagers as forced laborers and freely rape local women, and even children, according to Ka Hsaw Wa, a Burmese activist.

"In countries like Burma, they just don't care" about human rights, said the Burmese environment and human rights activist, who has received the Goldman Environmental Prize and Reebok Human Rights Award, among others, for his work.

The Publish What You Pay (PWYP) coalition of organizations argues that public disclosure of payments to foreign governments would "reduce risks to investors," and "contribute to global efforts to fight corruption and reduce poverty and instability in oil-producing countries."

The coalition calls passage of EITDA "the first necessary step toward improving America's energy security" by attempting to ensure that extractive industries do not provoke or exacerbate local conflicts.

"With oil, gas, and mining companies making record profits and host governments reaping giant windfalls, it is more important than ever that all financial flows are transparent," stated PWYP-member Oxfam America's policy analyst Ian Gary at the launch of EITDA.

Better regulating the activities and payments of U.S. firms represents one step toward greater transparency and accountability, but would have to be "complemented by direct engagement with foreign governments on good governance, respect for the environment, and protection of human rights," added Sen. Feingold, expressing hope that a new administration will take such steps.