Russian President Vladimir Putin has solidified his power with the help of Russia’s oil and gas wealth and Europe’s dependence on it, and has enriched a small circle of oligarchs in the process, all in a rather opaque manner. Yet in a recent editorial the Wall Street Journal made the extraordinary suggestion that Putin will somehow be further advantaged by the emergence of a global anti-corruption standard for the oil, gas and mining industries.
Three great letters appeared in yesterday’s Wall Street Journal rebutting this flawed argument that Section 1504 of the US Dodd-Frank Act – a law that requires US-listed extractive companies to disclose details of the billions of dollars they pay to governments across the world – will hand state-owned companies from countries like Russia and China a competitive advantage in the markets for oil, gas and minerals.
The letters were sent by Senator Ben Cardin, Clare Short (Chair of the Extractive Industries Transparency Initiative) and Publish What You Pay-US. They point out that companies cannot use revenue payment data to gain a competitive advantage, as comprehensively argued by Publish What You Pay-US (see pages 34 to 41 of this submission to the US Securities and Exchange Commission).
The Wall Street Journal had also implied that Gazprom and PetroChina – state-owned giants from Russia and China respectively – will escape the regulation and are not obliged to report revenue payments. In fact Gazprom is subject to similar legislation in Europe along with fellow Russian state-owned firms Rosneft and Lukoil. PetroChina meanwhile is listed on the New York Stock Exchange and therefore covered by the Dodd-Frank rules, along with Chinese state-owned supermajors Sinopec and Cnooc, as well as Brazil’s Petrobras.
Far from propping up autocratic regimes, the Dodd-Frank law is designed to combat corruption in the extractive industries and, as Senator Cardin says in his letter, will “punch holes through the opaque shields of dictators so that light can begin to shine through for citizens around the world.”