DRC Moves on Resource Transparency, U.S. Lags - Financial Transparency Coalition

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Last week, The Daily Show with Jon Stewart lampooned the failure to implement many elements of the Dodd-Frank Consumer Protection Act, even one year after the law’s passage. One of the most important elements awaiting approval is Section 1504 (also known as the Cardin-Lugar provision), which would require extractive industries to “Publish What they Pay” to governments in gaining access to the natural resources of a country, in order to prevent illegal activities and exploitation. However, delays from the SEC prevent the regulations from actually being implemented. Beyond the obvious humanitarian benefits, and improved economic competition that come with transparent markets, there is a broader foreign policy aspect to consider.

Our failure to actually implement 1504 shows a failure of American leadership. The Foreign Corrupt Practices Act, one of the highlights of our financial transparency toolbox, helped inspire similar laws around the world, countering a culture of corruption and improving the equity of the global business marketplace. Dodd-Frank has that same potential, as evidenced by David Cameron’s statements in support of similar measures last month. Yet recently the United States—as the world’s largest economy, and a major player in the United Nations, G-8, and G-20—has conceded leadership on the issue to another nation: the Democratic Republic of the Congo (DRC).

The DRC is one of the world’s poorest nations. According to the U.N. Development Program, it is the second least developed nation on the planet, behind Zimbabwe, while Task Force member Transparency International ranks it as the 164th (out of 178) most corrupt country in their Corruption Perceptions Index. The country has been plagued by decades of internal strife and foreign intervention. During this period of conflict, much of the nation’s vast mineral wealth has been exploited, with the Congolese people seeing little to no benefit from the immense quantities of resources exported. Yet recent developments from Kinshasa offer hope of increased transparency.

Task Force member Global Witness released a statement yesterday on resource transparency in the Democratic Republic of the Congo. The DRC’s Ministry of Mines has recently begun publishing the details of its contracts with oil and mining companies online. In May, Kinshasa promised to make all such contracts available to the public, though the published records are not yet fully complete. These steps towards transparency hope to make it easier to hold governments and corporations accountable for mining operations in sub-Saharan Africa’s largest nation, and ensure that some of the proceeds from Congolese copper, diamond, and coltan mines, among others, actually benefit the people of the nation. Hopefully the United States will follow Kinshasa’s lead and move towards implementation of Publish What You Pay rules shortly.