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US Urged to Keep Eye on US Firms Abroad

Alison Raphael

Oil storage tanks that are part of the Chevron Burnaby Oil Refinery are shown on the shores of Burrard Inlet in this view from Burnaby, British Columbia April 29, 2008. (Andy Clark/Reuters)

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

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

"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

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

"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.


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