US proposes disclosure law on extractive industries

House Financial Services Chairman Barney Frank has introduced the Extractive Industries Transparency Disclosure Act.

The legislation would require oil, gas, and mining companies listed on US exchanges to publicly disclose the payments they make to the governments of the countries from which those resources are extracted.

In a release the Chairman Frank said: ‘This disclosure requirement benefits both corporate shareholders as well as the citizens of the host countries where the extraction occurs. The information will allow shareholders to make better informed assessments of opportunity costs, threats to corporate reputation, comparative extraction costs, and long-term prospects of the companies in which they invest.’

“The information will allow shareholders to make better informed assessments of opportunity costs, threats to corporate reputation, comparative extraction costs, and long-term prospects of the companies in which they invest.

House Financial Services Chairman Barney Frank

‘In too many countries, the discovery of valuable natural resources has led to more harm than good. This legislation is an important step towards preventing this situation from either continuing or occurring in the first place. The principle that the people of a country ought to know what revenue is being generated by their country’s resources shouldn’t be a controversial one, and I look forward to speedy passage of this bill,’ added Chairman Frank.

‘Resource revenue transparency will help enable citizens of resource-rich countries to hold their governments more accountable and better equipped to ensure that their country’s natural resource wealth is used wisely for the benefit of the nation and for future generations. This form of transparency, in conjunction with an increasing active civil society, also promises to help create more stable, democratic governments.’