Sen. Ben Cardin was one of the proponents of provision 1504 in the Wall Street Reform bill, which calls for oil and mining companies listed on the U.S. stock exchange to disclose payments made to host nations for the exploration and extraction of oil, gas, and minerals.
Bill would protect newly oil-rich countries
Oil was first discovered in the country of Ghana in West Africa in the 1970s, but it wasn't until four years ago that commercial quantities of it were found. Quickly, the country of just over 24 million people saw companies flocking to it, because oil is money -- big money.
"This is a country that wants to produce oil," says Mohammed Amin Adam, head of the Civil Society Platform on Oil and Gas in Ghana, a coalition of groups and concerned citizens. "This is a country that needs the revenues to undertake development."
Adam says half of the country's population lives on less than $1 a day, so oil can be a savior for them. Or, he warns, it can be the opposite.
"This is also a country that has no capacity to ensure that companies operate within standards to protect the environmental and social costs of exploitation," Adam says. "So, if we are not able to do that, then we will have the experience of other countries that have not been able to escape the curse of oil."
Cardin pushed for protections
Sen. Ben Cardin (D-Md.) says the so-called 'resource curse' is a problem in many developing areas.
"Those countries that have mineral wealth, but their people are the poorest in the world, because the mineral wealth has been used to finance corruption, rather than sustainable development for the people of the nation," Cardin says.
Cardin was one of the champions of provision 1504 in the Wall Street Reform bill. It calls for oil and mining companies listed on the U.S. Stock Exchange to disclose payments made to host nations for the exploration and extraction of oil, gas, and minerals.
"If the people of the country know what their wealth is translated into dollars, then they know what exactly to expect as far as the value of their country and the programs that they should be receiving from their officials," he says.
Oil companies fight disclosures
By now, the Securities and Exchange Commission was supposed to have written the rules needed to enforce the measure, but that hasn't happened. Oil and mining companies are pushing back, saying the law will put firms listed by the SEC at a disadvantage.
"It would provide public access to confidential proprietary information," says Misty McGowen, with the American Petroleum Institute in D.C. "Very confidential and proprietary information is available publicly for competitors to access and use against these companies when competing for very valuable energy resources around the world."
McGowen says producers also fear the disclosure rule could negatively affect contracts already signed with countries that have different laws than the U.S. Cardin disputes those claims.
"The companies know this information," McGowen says. "This isn't a surprise to the oil companies. They know what these contracts are all about."
As for Ghana, Adam says this is exactly what they need to ensure the country does not fall victim to the resource curse.
"Information disclosure is a fundamental human right," says Adam. "Once you've given money to your government, your government must be answerable to you, accountable to you. So when your government has signed contracts or documents with foreign partners, it is a right."
The SEC does not have a timetable on when the rules will be released.