Growing concerns over oil companies’ dealings with Colonel Gaddafi underline why industry lobbyists must not be allowed to water down U.S. laws that aim to promote transparency and curb corruption in oil-rich dictatorships like Libya.
Recent revelations have exposed US regulators’ concerns over oil companies’ and investors’ relations with the Gaddafi regime in the run-up to the Libyan popular uprising:
• On Tuesday, the Wall Street Journal reported that US regulators had requested information from ConocoPhillips and Occidental Petroleum Corp. about their dealings with the Libyan government.
• The newspaper also said that regulators are inquiring into possible payments by ExxonMobil related to Libya’s sovereign wealth fund.
• The newspaper also reported official inquiries into whether the Wall Street bank Goldman Sachs may have violated anti-bribery laws in its dealings with the Libyan fund. Last month, Global Witness reported on some of our concerns regarding the fund’s portfolio with Goldman Sachs. Goldman Sachs denies any violations.
Global Witness does not allege that any of these companies violated US laws but the inquiries underline a lack of transparency and accountability which enabled the regime to abuse Libya’s oil wealth to maintain its corrupt and oppressive rule. Libya was described by the US ambassador there, in a leaked cable from January 2009, as “a kleptocracy in which the regime has a direct stake in anything worth buying, selling or owning.”
Strong transparency laws are needed to ensure that the public can scrutinise flows of revenues from companies to governments, while anti-corruption laws deter unscrupulous companies from enriching dictators through bribery. Global Witness believes that industry lobbyists should stop trying to water down laws and proposed regulations that would obstruct the Gaddafis of the future from abusing their countries’ oil wealth.
Global Witness is deeply concerned that:
• In the United States, energy companies and their lobbyists are trying to water down the proposed rules for implementing Section 1504 of the Dodd Frank Wall Street Reform and Consumer Protection Act, which requires energy and mineral companies to disclose their revenue payments to governments, for each project in each country that they operate.
• The US Chamber of Commerce is lobbying Congress to weaken the Foreign Corrupt Practices Act (FCPA), a ground-breaking US law which has since been emulated in other countries, including the United Kingdom and China.
• Energy firms have recently hired a leading Brussels lobby firm to try to water down an upcoming proposal from the European Union for a similar law to Section 1504 of the Dodd Frank Act.
Transparency and anti-corrruption laws are an essential first step towards building more accountable government in oil-rich countries like Libya, which would also benefit the oil industry by promoting stability and the rule of law, They must not be watered down.
For more information, please contact Corinna Gilfillan in Washington, DC on +1202 725 8705, Almira Cemmell in London on +44 207 492 5826 or Diarmid O’Sullivan in London on +44 7872 620 955, or visit our website at www.globalwitness.org.