The Revenue Watch Institute, one of POGO's funders, just released a report examining how the nature of revenue disclosure impacts the ability of citizens to hold countries accountable for revenue management. While the report focuses specifically on disclosures within the context of the Extractive Industries Transparency Initiative (EITI)--an initiative that the United States has not implemented--the challenges raised in determining whether to disclose information on an aggregated or disaggregated (company-by-company) basis are familiar to anyone who has sought information, only to be told that it is proprietary:
Many people interviewed for this report stated that their primary objection to disaggregated reporting was that they believed that it shifted the debate from the accountability and transparency of government revenues (and eventually expenditures) to scrutinising individual companies and whether they were paying “what they should.” As one interviewee put it, “I can only think of one reason for NGOs to want disaggregated payments information and that would be in the hope that it gives them something with which they can attack individual companies.”
On the domestic level, POGO has been a longtime advocate for transparency for Minerals Management Service (MMS) leases, contracts, documents, and procedures in order to avoid fraud and increase public confidence in the agency. But our many years investigating the United States's royalty management system has demonstrated that this information, which is essential to hold the government accountable, is rarely publicly available. As our report, Drilling the Taxpayer: Department of Interior's Royalty-In-Kind Program revealed, it can be easier for companies to access this information than it is for taxpayers. But even worse, our report included instances when information was deliberately kept from Congress:
[T]he Audit Manager for the North Dakota State Auditor's Office told the House Natural Resources Subcommittee on Energy and Mineral Resources that a high-ranking MMS official advised him and other members of the State and Tribal Royalty Committee not to testify before Congress: "This official expressed to us that Congress only requests that you testify so you aren't obligated to testify and that it is best to keep any problems in house."
The Revenue Watch Institute's report appropriately points out that holding the government accountable for accurate and honest revenue collection means making sure that pressure is also exerted on companies: "The dual focus on governments and companies is deliberate: By scrutinising both sides of the transaction,...[will] hopefully disclose information that will be more credible and will make it harder for one side (whether a government or a company) to deliberately misstate information." This, of course, is the same logic behind POGO's Federal Contractor Misconduct Database (FCMD), and our continued advocacy for government databases of contractor responsibility data being made public. As we found in our fight for the F-22, there is a certain effectiveness that comes with holding people accountable by name.
Perhaps the most important revelation from this report is that not all companies are opposed to increased transparency--some companies would even prefer to even the playing field by increasing the amount of information available. But the impetus to increase transparency and accountability in revenue reporting, the report finds, must come from civil society.
-- Mandy Smithberger
This is great. I would point out this argument applies in other areas involving the intersection of private companies and public resources. Reporting data on small business loans from the government or details about government contracts in an aggregate form misses an opportunity to have that public disclosure of data impact the behavior of companies.
Posted by: Adam Hughes | Jul 30, 2009 at 11:29 AM