A Big Victory for Congo and Extractive Industries Transparency in the US Financial Reform Bill
July 16th, 2010
On July 15, the United States Senate voted 60-39 to approve the Dodd-Frank Wall Street Reform and Consumer Protection Act. President Obama is expected to sign the measure into law next week. While the text of the financial reform act fills more than 2,300 pages, the many rules and regulations needed to implement it have not yet been written. This work by U.S. regulators is expected to take months, possibly years.
The legislation included an important provision requiring energy and mining companies to disclose how much they pay to foreign countries and the U.S. government for oil, gas, and minerals. The provision, based on the Energy Security through Transparency Act (S. 1700), will require companies registered with the U.S. Securities and Exchange Commission (SEC) to disclose payments to foreign governments for the commercial development of oil, natural gas, and minerals. This disclosure will apply to all companies filing with the SEC, regardless of where they are based, meaning that most of the world’s top extractive industries would be covered by this law. Thanks go to Senators Dick Lugar (R-Indiana) and Ben Cardin (D-Maryland) for insuring this provision made it into the legislation. The law will set a new international standard for transparency in the extractive industry.
Inclusion of the Congo Conflict Mineral amendment in the financial reform act is another important victory, especially for the people of the Democratic Republic of Congo, faith groups and human right advocates. This provision is based on the Congo Conflict Mineral Act 2009 (S.891) and will require companies to disclose whether they source conflict minerals from Democratic Republic of Congo or neighboring countries. It will also require companies to report on steps taken to exclude conflict sources from their supply chains. These reports will be backed by independent audits.
The conflict minerals measure requires the U.S. State Department to develop a map of mines controlled by militias operating in the mining area and to develop a detailed plan to address the problem. Kudos to Senators Christopher Dodd (D-CT), Sam Brownback (R-KS), Dick Durbin (D-IL), Russ Feingold (D-WI), and Reps. Jim McDermott (D-WA), Howard Berman (D-CA), and Barney Frank (D-MA), along with many other upstanding members of Congress, who deserve special praise for leading this battle over the past two years.
President Obama will sign the Dodd Frank Reform and Consumer Protection bill into law next week. From the day, the Securities and Exchange Commission will have nine months to develop regulations implementing the new law. It will be up to all of us – especially the faith groups, community advocates and human right groups – to ensure that these regulations are as strong as possible.