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Hearing of the House Financial Services Committee - H.R. 6066, The Extractive Industries Transparency Disclosure Act


Location: Washington, DC


Mr. Detheridge, you mentioned in your opening that it's in the company's best interest to make these disclosures. If that's the case, why don't they all do it?

MR. DETHERIDGE: You'll have to ask them. I --

REP. ROSKAM: I mean, you can appreciate the nature of the question. It's one thing for somebody who was previously employed to say, this was a great idea, and I've had this revelation since I've left the company. You know what I mean, or -- and I'm not criticizing you personally.

But my question is, you said it's -- if it's in the company's best interest to do it, why don't they?

MR. DETHERIDGE: Yeah. Let me explain why that -- why I think -- and that's not a revelation I had when I left.

REP. ROSKAM: I understand that. You mentioned that.

MR. DETHERIDGE: It's one that came to me while I was working for the company which led to me helping to instigate and support the Extractive Industries Transparency Initiative.

I'll just expand for a second on why I think it's good for companies. And it's not just an argument that it shifts the blame for the lack of development to where it belongs, you know, to the governments and away from the companies.

It's also that the oil and gas business is a very long-term business. You make an investment this year, you are not going to get a payback from that investment for several years to come, possibly seven, possibly ten.

The places where you want to work are places where people are happy, healthy, there is a thriving economy, and they've got jobs. Too often that's not the case.

REP. ROSKAM: Let me -- just because time is short, let me redirect the question, because you are answering the question why it's a good idea --


REP. ROSKAM: My question is why don't they do it, if it's a good idea and good for them?

What are the arguments that you've heard? What's the reluctance when you were advocating this and their eyes began to glaze over? What was behind the glaze?

MR. DETHERIDGE: I think that part of the reason behind the glaze is by putting more information into the public domain, more questions will be asked by investors, querying why, you know, you are investing in this particular country, by non-governmental organizations, possibly by people like yourselves.

So more information leads to more questions, and there is a natural reluctance against it. That's in sum, I think, the argument that I've heard.

REP. ROSKAM: Thank you.

Mr. Jenkins.

MR. JENKINS: Thank you. If I may just turn it around, do you think that --

REP. ROSKAM: Oh, no, I'm not in the question answering business. Let's just make that clear. So --

MR. JENKINS: Right. Well, would companies have wholeheartedly volunteered to disclose their executive compensation had there not been outside pressure to do so? Is there any company today that would say that disclosing such information is bad for that company?

And I think you have in that a parallel with this particular problem. There are companies of great stature who already fully disclose.

Newmont Mining is not a lightweight. They are not stupid, they generate a good shareholder return, and they believe that they are at no competitive disadvantage in disclosing.

There are many companies who simply don't want to give away information that they don't have to.

REP. ROSKAM: Fair enough.

Let me ask a question for the whole panel.

Is there -- Mr. Detheridge kind of touched on this a little bit or got towards it a little bit, and that is, could you speak to the challenge that's out there, limited resources worldwide -- let's say you have a nefarious head of a country who controls the natural resources in that country that makes a decision.

And he says, look, if I do business with this company that's listed, this information is going to be disclosed. If I do business with the Chinese, if I do business with one of these other entities, I'm not going to have to disclose this. Therefore, I'm going to do business with the non-disclosing entity.

How does this bill drive towards the unlocking of resources worldwide at a time when we need to do that more and more? Can you speak to that challenge? Anybody.

Yes, ma'am.

MS. LISSAKERS: Let's take Angola -- Congresswoman Waters mentioned Angola. And it goes to both your first question and then this one.

In Angola, British Petroleum proposed unilaterally to disclose its payments to the government, and the government then threatened to kick them out. On the other hand Shell-BP withdrew and became an active supporter of the EITI, and Angola has not signed on to EITI.

On the other hand, the Norwegian state oil company, Statoil --

REP. ROSKAM: Can I just stop you there, and we'll get back to that.

One -- did anybody come in, in the intervening period of time and take the place of BP in Angola?

MS. LISSAKERS: No, they were not kicked out. They did not disclose the payments, and they remained --

REP. ROSKAM: Oh, I see. I misunderstood.

MS. LISSAKERS: -- their contract remained. Angola is one of the few countries where the production sharing agreements stipulate that unapproved disclosure could be grounds for termination.

However, Statoil, the Norwegian oil company is also operating in Angola and has been for a long time. They publish their payments to the state of Angola because they are required by Norwegian law to do so. And the Angolan authorities have not said "Boo" about it. They haven't protested, they haven't pushed them to get out, they have not interfered with their business.

So the existence of law provides protection for the companies that want to operate transparently and properly.


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