Oil revenue transparency: a strategic component of U.S. energy security and anti-corruption policy

This report presents low cost, high-impact recommendations for both the United States and international oil companies to combat corruption, improve investment climates, and contribute to the development of poor nations. The report argues that the U.S. can also enhance its energy security by incorporating energy revenue transparency as a key component of its international energy policy. Furthermore, the U.S. should engage China, India, Russia, and Brazil as key partners in the setting of energy revenue transparency as a global standard.

The report argues that energy revenue transparency depends on the following three principles:

• “publish what you pay”: oil, gas, and mining companies disclosing the revenue payments they make to governments
• “publish what you earn”: governments disclosing the revenues they receive from extractive companies
• “publish what you spend”: governments publishing their budget expenditures. Together, these steps form a package that enables citizens to hold their governments to account for the use of energy revenues, thereby increasing a government’s legitimacy and credibility.

The report presents a number of recommendations in order to advance these initiatives. Recommendations to the United States include:

• enact U.S. legislation to introduce a statistical reporting requirement for all oil, gas, and mining companies to publicly disclose revenue payments to all governments, on a country-by-country basis
• engage at a senior diplomatic level with strategic oil and gas-producing countries to help influence them to sign on to the Extractive Industries Transparency Initiative (EITI), including such countries as Algeria, Angola, Indonesia, Libya, Qatar, Russia, and the UAE
• engage major oil-consuming countries outside the Western world, such as China, India and Brazil, and encourage them to give their support to the EITI and other global standards.
• increase the U.S. contribution to EITI from $1 million to at least $5 million per year, to reflect the importance of this strategic initiative
• make the monitoring of oil, gas, and mining revenue transparency a priority in U.S. embassies abroad
• use U.S. leverage as a Board Member of the International Financial Institutions (IFIs) to ensure that revenue transparency is fully incorporated into the lending policies of the World Bank, IMF, African Development Bank, the Inter-American Development Bank, and Asian Development Bank.