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New US law seeks disclosure of foreign payments

Publicly traded oil, gas and mining companies, including those from India and other emerging economies, will be required to disclose their payments to foreign governments under the landmark financial reform legislation.

world Updated: Jul 17, 2010 13:26 IST

Publicly traded oil, gas and mining companies, including those from India and other emerging economies, will be required to disclose their payments to foreign governments under the landmark financial reform legislation.

The new law awaiting President Barack Obama's signature will require companies to report on their filings with the Securities and Exchange Commission (SEC) such payments on a country-by-country and project-by-project basis, according to the Washington Times.

"We now have the tools to help people in resource-rich countries hold their leaders accountable for the money made from their oil, gas and minerals," Benjamin L Cardin, Maryland Democrat who co-introduced the measure in the senate was quoted as saying.

"Too often, oil money intended for a nation's poor ends up lining the pockets of the rich or is squandered on showcase projects instead of productive investments," Richard G Lugar, top Republican on the Senate Foreign Relations Committee said in support.

The legislation should go a long way to ending the secrecy surrounding companies' payments to foreign countries, its supporters contend.

The legislation applies to oil, gas and mining companies registered with the SEC and covers more than 90 percent of internationally operating oil companies and many of the top international mining companies, according to Oxfam America, an international nonprofit relief and development group that has been pushing for the law.

"This not only includes American companies but also many foreign companies, such as Shell and BP, as well as companies from emerging markets such as China, India, Brazil, and Russia," the Times cited Oxfam officials as saying.

The measure would not apply to a number of large nationally owned oil companies, most of which operate only in their own countries and not internationally.

Oxfam and others praised Congress for passing the legislation.

"Secrecy of oil, gas and mining company payments to governments fosters government corruption and violent conflict in resource-rich countries that are home to more than half of the world's poorest people," Oxfam America President Raymond C Offenheiser Jr was quoted as saying.

"Instability in these regions poses a long-term threat to national security, foreign policy, and economic interests in the United States."