South Sudan: America's Opportunity to Lead on Resource Corruption
July 15th, 2011
July 15th, 2011
This week marks the one-year anniversary of the passage of the Dodd-Frank Wall Street Reform Act. Section 1504 of the Act requires oil, gas, and mineral producers who report to the Securities and Exchange Commission (SEC) to disclose any payments made to foreign governments in the process of developing and extracting materials. Section 1504, or the Cardin-Lugar amendment as it is known, promotes much-needed transparency in the extractive industries sector. It represents the first time a country-by-country reporting policy has been introduced into US law, albeit on a limited scale.
The cost of corruption in the extractive industries sector is felt most acutely in the developing world, where it contributes to economic inequality and hampers poverty reduction efforts. However, American consumers suffer as well. Corruption can lead to higher fuel prices at home, due to the economic inefficiencies that come from such uncompetitive behavior.
Unfortunately, the SEC has yet to issue final rules for these filings, despite being several months beyond the 270-day deadline set by the bill.
Dodd-Frank became even more important last week, with the independence of South Sudan, after decades of civil war and violence. The new nation will be highly dependent on oil exports as it attempts to overcome generations of strife and lift millions out of poverty. The “Publish What You Pay” provisions of Dodd-Frank are essential to ensuring that the nation’s essential resources can be developed and accessed in a just manner.
On July 9, South Sudan’s independence day, Secretary of State Hillary Clintonsaid “To succeed, South Sudan will have to begin building an effective, democratic and inclusive government that respects human rights and deliversservices with transparency and accountability.” Promoting Dodd-Frank through active enforcement of Section 1504, supported by rigorous reporting procedures under SEC guidelines, is the most basic, common sense step towards helping the world’s newest nation do just that.