Financial Transparency Coalition

White House Photo

Last summer, we reported that the Obama Administration planned to globally promote the Energy Security Through Transparency (ESTT) provisions (Sec. 1504) of the new Dodd-Frank legislation.  Now, it appears as though they’ve remained true to their word.

Last July, after the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the White House released a statement about Sec. 1504 saying (underlining added by me):

This provision is an essential new tool in promoting transparency in the oil and mineral sectors. This legislation will immediately shed light on billions in payments between multinational corporations and governments, giving citizens the information they need to monitor companies and to hold governments accountable. It will shine a sustained light on the relationship between corporations and governments in the oil and mineral sectors, and make impossible the kind of back-room dealings that cost taxpayers in lost royalties.

Importantly, this provision sets a new standard for corporate transparency. The challenge for us now is to make this a global standard. The United States is committed to working with other countries to ensure the implementation of similar disclosure requirements in other financial markets and will make this a priority in the year ahead.

At the time, we lauded the White House for its commitment to making this a global standard.  We wrote:

… [T]he passage of the ESTT amendment sends a powerful message to the rest of the world: that country-by-country reporting is vitally important both to resource-rich countries in the developing world and to industrialized nations in the developed world.  The White House recognizes this and has wisely decided to act on it.  It is now up to President Obama to turn these words into action.

And, it appears they’ve heeded our call to act.  Earlier this week, The Wall Street Journal’s Joe Palazzolo reported that the White House has been lobbying its allies in Europe to adopt similar legislation.  Palazzolo writes:

The White House has been pushing for the passage of payment-disclosure laws in major financial markets in Europe, in hopes of rendering virtually all oil, gas and mining companies that raise capital on Western stock exchanges subject to the same reporting requirements, according to one administration official. (About 60% of the the largest companies within the extractive industry are listed on U.S. stock exchanges, according to the Forbes 2000.)

The National Security Council has been coordinating the effort to promote the law abroad because several agencies have a stake in the issue, administration officials said. President Obama touted the disclosure provision in a September speech at the United Nations, calling corruption “the single greatest barrier to prosperity” and “a profound violation of human rights.”

NSC staff have pressed the issue in the Group of 8 setting, as well as in meetings with officials from the U.K., the European Commission and France, the official said. Staff have also met with representatives of the extractive industry, including the American Petroleum Institute, to listen to their concerns.

We couldn’t be happier with regard to the White House’s effort on this issue.  The ball is now in Europe’s court to act upon this very important anti-corruption initiative.  We hope that the European Union, the UK and France can muster the energy to create similar laws in their own jurisdictions.