BP and partners’ US$350 million payments in corruption-prone Angola show need for U.S. transparency rule
As African leaders meet Barack Obama, campaigners ask where has the money gone?
As Heads of African governments gather in Washington D.C. for the U.S.-Africa Leaders’ Summit tomorrow, there is a crucial issue that must get attention: where does the money from natural resource deals go – including US$350 million being paid by U.S.-listed companies for a mysterious research center in Angola?
In 2012, Africa’s oil and mineral exports were worth US$305 billion – almost seven times the value of international aid to the continent that year. [1] This wealth will contribute to development and poverty alleviation in Africa – if it is managed effectively and transparently.
But, while progress has been made on improving transparency in the global oil and mining industries, there are still serious blocks to this happening both in the U.S. and in resource-rich African countries like Angola.
“In the U.S. BP and a handful of other big oil companies are lobbying to weaken transparency rules that would enable citizens to effectively ‘follow the money’ from natural resource deals in African countries. Meanwhile many resource-rich countries including Angola are still failing to adequately disclose where billions of dollars are going from oil revenues paid by these companies,” said Simon Taylor, director of Global Witness.
As President Obama and the Vice President of Angola Manuel Vicente meet, Global Witness is raising urgent questions about where US$350 million being paid by BP and its partner companies for a project in corruption-prone Angola is ending up.
BP and its partners including Houston-based Cobalt International Energy have contributed US$175 million over the past two-and-a-half years to fund a project in Angola known as the Sonangol Research and Technology Center (SRTC), with another US$175 million due to be paid by January 2016. [2]
Global Witness asked BP and Cobalt to provide any information that confirms the SRTC exists. The companies did not provide this information in their responses.
BP stated that Sonangol, Angola’s state-owned oil company, “has informed BP that the SRTC is still in planning stage.” Cobalt said they “monitor the progress of our social contributions in Angola, including the Research and Technology Center” but did not provide any further information about the project. [3]
Global Witness asked Sonangol for information to confirm the existence of the SRTC, but the company did not respond. We commissioned interviews with well-placed industry insiders, but none of them could confirm that the SRTC exists. [4] Global Witness is calling on the Angolan authorities to disclose where this money has gone.
International oil companies are contractually obliged to make these types of payments to Sonangol, [5] which has a history of corruption allegations. [6] The lack of information to confirm that the SRTC exists raises serious concerns that the money may have been misappropriated, potentially corruptly.
Rules being developed by the U.S. Securities and Exchange Commission should provide citizens and anti-corruption agencies with detailed information about these types of payments, enabling them to hold governments and companies to account for how natural resource revenues are used.
Yet the American Petroleum Institute, which represents the interests of some oil companies including BP, is lobbying to weaken the U.S. rules and keep payments hidden from public view in Angola and other countries. [7] In contrast to some of its oil industry competitors, Norway’s Statoil has publicly endorsed the creation of a strong global transparency standard that matches a new EU law, which requires resource firms to publish their payments to governments on a project-by-project basis in all countries with no exceptions. [8]
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