[once again; mirror mirror on the wall, who's the greatest protection racket of them all?]
[New York Times] September 19, 2003 U.S. and Oil Companies Back Revised Effort on Disclosure By JEFF GERTH WASHINGTON, Sept. 18 - The Bush administration and major oil companies are participating in an unlikely alliance with activist groups in support of an international campaign for more disclosure of information about financial transactions in global oil markets. But according to participants in the negotiations, administration and oil company officials expressed their backing for the movement only after they succeeded behind the scenes in changing its direction, shifting the focus away from private corporations to aim pressure at governments of oil-producing countries. The campaign for transparency, as the effort is called, was begun last year by civic groups concerned about losses through graft and waste of billions of dollars in oil revenues in poor countries, particularly in Africa. They argue that publishing the figures on governments' oil revenues and on oil payments by private corporations would help prevent corruption by allowing citizens to follow the money trail and hold their governments more accountable. Typically countries that rely on oil revenues, like the major producers in the Middle East, do not make oil transactions public or require private producers to do so. At stake in the campaign is the course of development in poor nations that are rich in petroleum resources. Proponents of more disclosure argue that markets that are both open and stable can help these countries attract needed capital and technology from foreign investors. The campaign has improbably united the nongovernmental groups with Prime Minister Tony Blair of Britain, the Bush administration and major oil companies. But in months of negotiations, administration officials and American oil companies raised a series of objections, shifting the burden to governments - rather than private producers - to be more open about their oil business, interviews with participants and internal British documents show. In a reflection of that shift, participants in the campaign say they have held discussions with several African governments in recent weeks in hopes of starting small pilot projects to test ways to increase the information flow, officials said. In response to objections from American officials and oil companies, especially Exxon Mobil, the British government also dropped its original plan to require participants to sign a common agreement, or compact, that would have required detailed reporting. Mr. Blair raised the profile of the cause by endorsing it in a speech in September 2002 at a development conference in South Africa. Last June, the Group of Eight leading industrial democracies, in a summit meeting in Evian, France, embraced a plan to improve information disclosure and fight corruption. Increasing the flow of information about oil transactions helps "create the right climate for attracting foreign investment" in developing countries and makes it more likely that their "revenues will be used for poverty reduction," Mr. Blair said at a conference in London in June, where dozens of companies and countries, including the United States, pledged their support for the campaign. None of the leading oil producing countries from the Persian Gulf were among the 25 nations that were represented at the conference. "Transparency is becoming a very big cross-cutting issue that we are pressing in many different regions," said Alan P. Larson, who, as under secretary of state for business affairs, is in charge of United States policy toward the campaign. But the Bush administration, working with the oil companies, moved quickly to revise the proposals championed by Mr. Blair's government. An administration official, who insisted on not being identified, said that Washington's concern about the initial British proposal was its "focus on company disclosure." He said the administration did not agree with its rationale that if companies were more open, governments would be forced to make their budgets more open to scrutiny as well. In response to the American oil companies' arguments, the proposal was scaled back to smaller pilot projects that emphasize governments' taking the first steps. The standards for disclosure by private corporations were also loosened. The nongovernmental organizations at one end of the alliance are led by George Soros, the financier, who has personally prodded oil companies and governments like Kazakhstan's, and Global Witness, a group based in London. In a report last year, the group said that as much as $1 billion in oil revenues disappeared every year from the budget of Angola. Their campaign, called Publish What You Pay, seeks to require publicly traded oil companies to disclose their payments to foreign governments. At the other end of the alliance stands Exxon Mobil, the world's largest oil company. In its statement at the London conference, the American giant - unlike several other oil companies and the United States government - did not even acknowledge the activists or their campaign. "Exxon Mobil has a very powerful voice within the industry," one executive from a rival oil company said, "and they are less inclined than some other companies to engage" with nongovernmental groups. An Exxon Mobil spokesman said the Publish What You Pay Campaign would put publicly traded corporations at a disadvantage because government-owned oil companies, which control 65 percent of the world's oil production, would be exempt from disclosing their oil payments. Andrew P. Swiger, chairman of Exxon Mobil International, said in London that the company backed "transparency that applies universally to all companies attempting to do business within a country." But he rejected any mandatory disclosure, a view largely shared by other oil companies. Simon Taylor, the director of Global Witness, argued that a partial or voluntary plan would not work in the countries that need it most, like Equatorial Guinea, Kazakhstan or Angola. Mr. Taylor said a crucial moment came last February, in connection with a meeting convened by the Department for International Development in Britain. According to participants and department documents, the proposal envisioned a "voluntary compact" that would be signed by companies and governments. A representative of the British department, which was the host of the London conference, acknowledged that the American objections were crucial to the decision to drop the push to get countries and companies to sign an agreement. "It was more important to have a lot of people on board than to railroad something through," the representative said. One American concern, participants said, was that a signed agreement created many uncertainties and raised potential legal problems for United States companies. Again, participants said, the strongest opponent was Exxon Mobil. In a written reply to questions, an Exxon Mobil spokesman said the company had relayed to the United States government its concerns about the Alien Tort Statute of 1789, more commonly known as the Alien Tort Claims Act. The statute lay dormant until its recent use by foreigners seeking redress in American courts against repressive regimes as well as against corporations that operate in those nations. The representative of the British department said it dropped the requirement that participants sign a compact partly because of the concerns among some oil companies about the 1789 law. But the department noted that its own analysis found that the campaign's principles could not be "construed as international law."
