In the Wall Street Reform Bill, Something for Africa

(NNPA) - Centuries of history have proven that much of the money given to African governments in exchange for resources has taken the form of bribes to despot leaders. Too often the funds are misappropriated to personal bank accounts instead of aiding an impoverished nation as intended. This remains a major issue as corporations around the world rely heavily Africa's natural resources. Col-tan powers our cell phones, computers and video game systems and the hunt for resources helps to keep DR Congo immersed in conflict. Oil from Nigeria, diamonds from Sierra Leone, tire rubber from Liberia… and of course the list goes on. While extractive industries may pay millions for their in-country privileges, there are very few laws on the books anywhere in the world that regulate the payments or the amount of minerals that can be extracted. Fortunately, the U.S. Congress has passed legislation that will reform these practices - we hope.
Much of the Wall Street Reform legislation in Congress promises to offer relief to consumers here in the US from nefarious practices of banks and financial institutions. However, a bipartisan provision contained in H.R. 4173, the Restoring American Financial Stability Act of 2010, will provide a new level of checks and balances on corporations doing business in Africa. The provision requires all companies on the New York Stock Exchange to disclose payments made to governments for "extracting resources such as oil and gas, mining materials, gold, and diamonds." The amendment is a first important step towards uncovering the relationship between corporations and governments in resource rich countries, especially in Africa. Companies will be required to "publish what they pay". Not a new concept, but certainly an unprecedented shift to provide information about the practices of US corporations outside of our borders.
Significantly, this provision will also allow for keeping track of the amount of minerals being taken from the earth. This will help to restrict the growth of 'conflict minerals' that fund so many armed struggles on the continent. Once you can track the money you can also track the size of the extractions. For people in countries like the Congo, this provision will be a valuable tool to advance good governance and to promote economic growth.
To quote California's Democratic Congresswoman Maxine Waters, "Requiring oil, gas, and mining companies to publish what they pay to developing country governments for resource extraction will improve transparency, reduce corruption, and make it easier to determine whether the profits from mineral wealth are benefiting the people of these countries. In the absence of transparency, mineral wealth can contribute to corruption, dictatorship, and armed conflict."
NGOs (Non-governmental Organizations) in Africa and the United States hope that new found transparency will force nations to more robustly fund healthcare, education and clean water as the amendment ensures that payments given to governments for natural resources go towards efforts to fight poverty and hunger. This also means that now watch-dog groups from around the world will have access to a new source of reliable information that cannot be controlled by leaders in corrupt and repressive regimes. What's more, civil society leaders who are already battling corruption within their own governments will be able to compare what payments are reported by companies with payments reported by the relevant governmental agencies.
Of course the looming concern is to find a way for the international community to hold each of these governments accountable. The significance of having a full reporting process for corporations doing extractive business within Africa can't be overstated. However, it will be quite another feat entirely to make a nation adhere to standards of accountability to its own citizens. This is an age-old problem that we must continue to make new inroads into tackling. African government accountability aside, at least for right now the U.S. Congress is moving forward in the correct direction. Let's hope other governments around the world will follow their lead.

Nicole C. Lee, Esq is president of TransAfrica Forum.