HR 6066 IHCommentsClose CommentsPermalink

To require, for the benefit of shareholders, the disclosure of payments to foreign governments for the extraction of natural resources, to allow such shareholders more appropriately to determine associated risks.CommentsClose CommentsPermalink

May 15, 2008

Mr. FRANK of Massachusetts (for himself, Ms. MOORE of Wisconsin, Mr. WATT, and Mr. HASTINGS of Florida) introduced the following bill; which was referred to the Committee on Financial ServicesCommentsClose CommentsPermalink

To require, for the benefit of shareholders, the disclosure of payments to foreign governments for the extraction of natural resources, to allow such shareholders more appropriately to determine associated risks.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the `Extractive Industries Transparency Disclosure Act'.CommentsClose CommentsPermalink

SEC. 2. FINDINGS.

The Congress finds the following:CommentsClose CommentsPermalink





(1) Each year corporations pay billions of dollars to foreign governments and their affiliates for natural resources, such as oil, gas, coal, copper, diamonds, and other extracted minerals.CommentsClose CommentsPermalink





(2) Developing countries that derive a significant portion of their revenues from natural resource extraction tend to have higher poverty rates, weaker governance, higher rates of conflict, and poorer development records than those countries that do not rely on resource revenues. Since revenues derived from natural resource extraction are often a singular opportunity for some developing countries to structure programs and institutions to broaden the collective and individual wealth of their citizens, it is imperative that the uses of such funds are closely monitored.CommentsClose CommentsPermalink





(3) There is a growing consensus among oil, gas, and mining companies that transparency is good for business, since it improves the business climate in which they work and fosters good governance and accountability.CommentsClose CommentsPermalink





(4) Transparency benefits shareholders because of their desire to know the amount of such payments in order to assess financial risk, compare payments from country to country, and assess whether such payments help to create a more stable investment climate; moreover, undisclosed payments may be perceived as corrupt and to the detriment of the image of the corporation.CommentsClose CommentsPermalink





(5) It is in the United States best interest to promote transparency, since transparency contributes to a better investment climate, a more stable commodity supply, and greater energy security.CommentsClose CommentsPermalink

SEC. 3. ADDITIONAL ANNUAL REPORT DISCLOSURES REQUIRED.

(a) Amendment- Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(m) Disclosure of Payment for Resource Extraction-CommentsClose CommentsPermalink





`(1) DISCLOSURES REQUIRED- The Commission shall modify the rules prescribed under subsection (b) of this section to require that each issuer required file an annual report with the Commission shall disclose in such report the total amounts, for each foreign country and for each category of payment for each foreign country, of any and all payments made, directly or indirectly, by the issuer or any of its subsidiaries, to an agency or instrumentality of a foreign government--CommentsClose CommentsPermalink





`(A) for natural resources in a foreign country; orCommentsClose CommentsPermalink





`(B) in any connection with the extraction of natural resources from a foreign country.CommentsClose CommentsPermalink





`(2) DEFINITIONS- For purposes of this subsection:CommentsClose CommentsPermalink





`(A) AGENCY OR INSTRUMENTALITY OF A FOREIGN GOVERNMENT- The term `agency or instrumentality of a foreign government' means--CommentsClose CommentsPermalink





`(i) a foreign government;CommentsClose CommentsPermalink





`(ii) a department, ministry, agency, office, officer, employee, legislator, representative, subdivision, or agent of a foreign government;CommentsClose CommentsPermalink





`(iii) a person that is directly or indirectly owned, controlled or employed by one or more of the persons or entities described in clause (i) or (ii);CommentsClose CommentsPermalink





`(iv) an account, trust, or other device held for the benefit of any of the persons or entities described in clause (i), (ii), or (iii); orCommentsClose CommentsPermalink





`(v) an entity controlled by the state, such as a state-owned oil company, and its agents.CommentsClose CommentsPermalink





`(B) CATEGORY OF PAYMENT- The term `category of payment', for any payment or transfer, means the one of the clauses (i) through (viii) of subparagraph (G) that most closely describes such payment or transfer.CommentsClose CommentsPermalink





`(C) EXTRACTION- The term `extraction' means any one or more of the following:CommentsClose CommentsPermalink





`(i) the search for any natural resource, in its natural deposits and original locations;CommentsClose CommentsPermalink





`(ii) the acquisition of property rights, licenses, or properties for the purpose of further exploration or for the purpose of removing any natural resource from existing deposits on those properties, or both;CommentsClose CommentsPermalink





`(iii) the construction, drilling, and production activities necessary to retrieve any natural resource from its natural deposit, and the acquisition, construction, installation, and maintenance of field gathering and storage systems, including lifting any other natural resource to the surface and gathering, treating, field processing and field storage;CommentsClose CommentsPermalink





`(iv) the transportation of any natural resource through the territory of any foreign country by any means;CommentsClose CommentsPermalink





`(v) the export of any natural resource from an intermediary country; orCommentsClose CommentsPermalink





`(vi) the acquisition of any concession, permission, permit, right, or other authorization from a foreign government necessary or desirable to conduct any of the activities described in the preceding clauses of this subparagraph.CommentsClose CommentsPermalink





`(D) FOREIGN COUNTRY- The term `foreign country' means any country other than the United States.CommentsClose CommentsPermalink





`(E) FOREIGN GOVERNMENT- The term `foreign government' means the government of any foreign country.CommentsClose CommentsPermalink





`(F) NATURAL RESOURCES- The term `natural resources' means--CommentsClose CommentsPermalink





`(i) oil and gas reserves, metal ores, gemstones, industrial materials, coal; andCommentsClose CommentsPermalink





`(ii) any other commodity of commercial value produced by the extraction of natural resources, in its natural or refined state, that the Securities and Exchange Commission shall by regulation determine should be subject to the reporting requirements of this subsection in order to carry out the purposes of this subsection due to the significance of the amounts being paid therefore by one or more issuers.CommentsClose CommentsPermalink





`(G) PAYMENTS- The term `payments' means any transfer or payment of any kind, either direct or indirect, and irrespective of the amount, and in any form whatsoever, including--CommentsClose CommentsPermalink





`(i) host government's production entitlements;CommentsClose CommentsPermalink





`(ii) national state-owned company production entitlements;CommentsClose CommentsPermalink





`(iii) profits taxes;CommentsClose CommentsPermalink





`(iv) royalties;CommentsClose CommentsPermalink





`(v) dividends;CommentsClose CommentsPermalink





`(vi) bonuses (such as signature, discovery, or production bonuses);CommentsClose CommentsPermalink





`(vii) license fees, rental fees, entry fees, and other considerations for licenses or concessions; andCommentsClose CommentsPermalink





`(viii) other benefits to the foreign government or the agency or instrumentality of the foreign government that have a value of not less that $100,000.'.CommentsClose CommentsPermalink





(b) Deadline- The Securities and Exchange Commission shall prescribe the modifications to its rules required by section 13(m) of the Securities Exchange Act of 1934 (as added by the amendment made by subsection (a) of this section) within 90 days of the date of enactment of this Act, and shall make such modifications effective with respect to the annual reports of issuers with respect to the fiscal years of issuers ending on or after January 1, 2009.CommentsClose CommentsPermalink





(c) Public Availability of Information- The Securities and Exchange Commission shall, by rule or regulation, provide that the information filed by all issuers pursuant to such section 13(m) be compiled so that it is accessible by the public directly, and in a compiled format, from the website of the Commission without separately accessing on the EDGAR system the annual reports of each issuer filing such information.CommentsClose CommentsPermalink