Human Rights Institute Research Cited in Congressional Testimony

July 3, 2008 (NEW YORK) – Research conducted by Columbia Law School’s Human Rights Institute (HRI) on transparency in oil and mining contracts was cited in testimony at a hearing of the United States House Financial Services Committee on June 26. The hearing concerned H.R. 6066, the Extractive Industries Transparency Disclosure Act (EITDA).

Many developing countries, despite being rich in oil, gas and minerals, are home to some of the world’s most impoverished citizens who rarely see the revenue from these natural resources. Proponents of the bill assert that a lack of information about deals between extractive companies and the host country’s government has left the door open to corruption, conflict and the perpetuation of poverty.

In addition, resulting political strife in these countries could escalate the rise in price of oil and other commodities, bill supporters say. “It is not that payments to foreign governments per se pose a risk to investors, but rather that the diversion of such payments—and the general lack of accountability and public access to payment information—in the countries where a company is drilling or mining creates a high risk of political blow-back, unrest, expropriation, shakedowns, extortion, and damage to company reputations,” said Revenue Watch Institute Director Karin Lissakers in testimony before the Financial Services Committee.

EITDA would require oil, gas and mining companies listed on U.S. exchanges to publicly disclose payments they make to foreign governments for the extraction of resources. House Financial Services Chairman Barney Frank (D-MA), who introduced the bill, is among those who argue that disclosure would give citizens of host countries tools they need hold their governments accountable. The bill would also provide valuable information in a uniform format to corporate shareholders of these companies, proponents say.

HRI has spearheaded several projects to improve transparency in oil, gas and mining contracts. In 2007, it was awarded a $150,000 grant from Revenue Watch Institute to research the barriers to disclosure of such contracts. Susan Maples ’07, the Revenue Watch Institute fellow at HRI, has spent the past year analyzing contracts from nations throughout the world.

“It’s very exciting that Columbia is doing research that’s proving very timely,” Maples said. “Many different organizations and actors are focused now on these contracts,” she said, pointing to new initiatives launched by the United Nations and the World Bank that will focus on the development impacts of resource extraction contracts and their chain of value.

Maples, with research assistance from law students in Columbia Law School’s Human Rights Clinic, wrote a legislative memorandum on EITDA that was entered into the Congressional Record. The memorandum explains why confidentiality concerns raised by drilling and mining companies and industry representatives lack legal merit.

In her testimony, Lissakers cited Maples’ research to refute arguments that EITDA would force companies to violate contractual obligations not to release information without written consent. HRI’s analysis of confidentiality provisions in more than 100 major oil and mining contracts found that the overwhelming majority either already allow disclosure to stock exchanges or offer a general exception for compliance with law, Lissakers said.

Lissakers’ full testimony is available here. A Webcast from the hearing is available here.

The Human Rights Institute, co-directed by Professors Sarah Cleveland and Peter Rosenblum, is a network for human rights scholars, teachers, practitioners and activists. Building on decades of leadership in human rights education, Columbia Law School founded the Human Rights Institute in 1998 to help train the next generation of lawyers, teachers, and human rights professionals. More information about HRI’s work to promote transparency in resource extraction contracts is available here.

Columbia Law School, founded in 1858, stands at the forefront of legal education and of the law in a global society. Columbia Law School joins traditional strengths in international and comparative law, constitutional law, administrative law, business law and human rights law with pioneering work in the areas of intellectual property, digital technology, sexuality and gender, and criminal law.