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H.R. 6066 (110th): Extractive Industries Transparency Disclosure Act

The text of the bill below is as of May 15, 2008 (Introduced). The bill was not enacted into law.



2d Session

H. R. 6066


May 15, 2008

(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 Services


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.


Short title

This Act may be cited as the Extractive Industries Transparency Disclosure Act.



The Congress finds the following:


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.


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.


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.


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.


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.


Additional annual report disclosures required



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:


Disclosure of payment for resource extraction


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—


for natural resources in a foreign country; or


in any connection with the extraction of natural resources from a foreign country.



For purposes of this subsection:


Agency or instrumentality of a foreign government

The term agency or instrumentality of a foreign government means—


a foreign government;


a department, ministry, agency, office, officer, employee, legislator, representative, subdivision, or agent of a foreign government;


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);


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


an entity controlled by the state, such as a state-owned oil company, and its agents.


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.



The term extraction means any one or more of the following:


the search for any natural resource, in its natural deposits and original locations;


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;


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;


the transportation of any natural resource through the territory of any foreign country by any means;


the export of any natural resource from an intermediary country; or


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.


Foreign country

The term foreign country means any country other than the United States.


Foreign government

The term foreign government means the government of any foreign country.


Natural resources

The term natural resources means—


oil and gas reserves, metal ores, gemstones, industrial materials, coal; and


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.



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—


host government’s production entitlements;


national state-owned company production entitlements;


profits taxes;






bonuses (such as signature, discovery, or production bonuses);


license fees, rental fees, entry fees, and other considerations for licenses or concessions; and


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.




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.


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.