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Analysis

Interior Department Says Laws Prevent Greater Transparency…but They’re Wrong

The United States will no longer participate in an international transparency initiative aimed at reducing corruption in the oil, gas, and mining industries, according to a letter from an Interior Department official.

According to the letter, the United States must bow out of the Extractive Industries Transparency Initiative (EITI) because, “U.S. laws prevent us from meeting specific provisions of the EITI Standard.”

Except they don’t.

The EITI Standard requires that companies publish what they pay to governments and that governments publish what they receive for the extraction of natural resources from public lands. A key piece of data that governments and industries are required to disclose are tax payments. This, according to a report from earlier this year by the Interior Department’s Inspector General, is the main “provision” standing in the way of U.S. success in EITI because the majority of U.S. oil, gas, and mining companies have refused to disclosure their taxes. But while there’s no law that forces companies to disclose their taxes—thanks largely to industry lobbying—there’s also no law that prevents them from doing so.

Some of the same companies who refused to disclose their taxes—including industry giants Exxon and Chevron—sit on the EITI Board and wrote the international guidelines that require tax reporting. What’s more, every industry member that signed up to participate in USEITI in 2011 should have been aware of the tax reporting requirement.

Whatever reason the U.S. government gives for leaving USEITI, the fact remains that as long as companies refuse to disclose their taxes, the United States will fall short of the EITI Standard.