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Today, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act passed last week by the U.S. Senate that includes a landmark provision requiring disclosure of payments from oil and mining companies to governments around the world. For the first time, communities who live in resource-rich countries will know how much their governments receive annually, and on a project-by-project basis for the extraction of natural resources.

After nearly two years of work and consistent opposition from big oil, substantive provisions of legislation initially introduced by Senators Lugar (R-IN) and Cardin (D-MD) as the Energy Security Through Transparency Act (ESTT), were signed into law by President Obama as Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act on Wednesday. Offered by Senator Leahy (D-VT), the provision will require both US and internationally-based companies registered with the U.S. Securities and Exchange Commission (SEC) to publish what they pay to governments for the commercial development of oil, gas, and minerals, while creating a new international standard for transparency in the extractive industry.

The provision, which will apply to 90 percent of the largest internationally operating oil and gas companies, made the cut during an all-night House-Senate conference committee meeting over the Wall Street reform bill.

Last week, I took a short 20 minute walk from ERI's offices to visit Radio Free Asia (RFA) where, together with other like-minded people, I travelled down the Mekong River, from the source to the mouth, learning about the manifold cultures living alongs its banks. Several of the 26 video clips filmed by RFA Mekong Team travelling from the source to the end of the river were screened and panels, including the team members, shared comments and thoughts on a range of issues related to the river with the audience. 

The opening clip – the source of the Mekong – presented the unspoiled beauty of the Tibetan Plateau and the local nomadic lifestyle. Watching this gorgeous footage awakened memories of my own trip to the Mongolian Plateau in 2006, and made me desperately want to return. No doubt RFA's video team feel the same way watching their own film – longing to leave all worries behind and enjoy a cup of Tibetan salty tea under a black tent. 

Tibetan nomads living relatively close to the source view the Zachu - the local name for the Mekong river - as sacred and find spiritual support rather than seeking practical benefit from it, for example, by fishing. With the Tibetan practice of river burial of babies, the nomad does not eat what comes out of the water. They are content with their life: grass for grazing animals, food to eat, yaks to milk, and their monastery of monks. Claiming that overgrazing is threatening the source of China’s three major rivers, the Chinese government resettles the nomad in new towns with concrete fences, which keeps them confined and isolates them from traditional employment or economic activity. Despite the Chinese government’s efforts to make Tibetan religious and living culture conform to China’s, ordinary Tibetans and pilgrims living with Zachu keep their life from being touched by history.

Last week, a Federal High Court in Delta State, Nigeria, handed down a judgment for 15.4 billion naira – about 100 million U.S. dollars – against Royal Dutch/Shell’s Nigerian subsidiary, declaring Shell liable for the damage caused by the mammoth, decades-long Ejama-Ebubu oil spill.  The judgment also ordered Shell to remediate the affected land to its pre-spill condition.  Yet in light of a promised appeal by Shell, the people whose lands and livelihoods were destroyed by Shell’s negligent actions are years from seeing any relief.  Shell claims to obey local laws and respect communities’ rights.  However, Shell, like other oil companies in cases worldwide, has employed questionable tactics that overwhelm local courts, seeking to deny, delay, and ultimately derail the judicial process in a bid to avoid liability.

On Monday I spoke at the Paris launch of our new report documenting the serious impacts of the French oil giant Total, the American company Chevron, and the Thai company PTTEP in military-ruled Burma. Alongside Wong Aung, Coordinator of the Shwe Gas Movement, and Michel Roy, Coordinator of Publish What You Pay-France, we launched the new EarthRights International report, entitled Energy Insecurity: How Total, Chevron, and PTTEP Contribute to Human Rights Violations, Financial Secrecy, and Nuclear Proliferation in Burma (Myanmar) (“Energy Insecurity”). The 49-page publication documents corporate complicity in killings and forced labor in Burma; it demonstrates how the oil companies have generated over US $9 billion through their pipeline in Burma, and how the companies are concealing their payments to the world’s newest nuclear threat: the Burmese military regime.

While the report and press release focused global attention on the relationship between the oil companies and the Burmese junta, the journalists in France got something different. The conversation at the well-attended press conference on Rue du Bac included ERI’s revelation that the French bank BNP Paribas was and may still be involved in the controversial Yadana gas project in Burma. While there may be nothing illegal about the mega-bank’s role in the project (that’s for the French to investigate), it is of a special moral concern, and we thought it’d be of particular interest to the socially conscious citizens of France.

International law has developed rapidly in recent decades to accommodate the demands of emerging markets, resulting in an unprecedented emergence of specialized regimes such as ‘investment law’, ‘human rights law’, and ‘environmental law’ with no clear mandate in the international law framework as to how to deal with the overlap between rules and institutions within these regimes. 

The international legal framework for transnational investment activities continues to expand.  There are thousands of Bilateral Investment Treaties (BITs) in force, the purported purpose of which was to increase foreign investment by providing foreign investors procedural and substantive rights that protect them from activities of the host government, such as expropriation without adequate compensation, guarantees of fair and equitable treatment, and non-discrimination.  Yet international investment law remains silent on human rights and the ‘investment law’ regime does not provide any mechanism to protect the individuals and communities whose human rights may be implicated by corporate activities and direct foreign investment.

This is no surprise to Argentina.  The Argentine Government has faced numerous foreign investor claims that the country’s various emergency measures and public interest reforms adopted in the wake of the 2001 economic crisis devalued foreign investments in the formerly State-owned public utility sectors, such as water, sewage, and energy.  Almost all of the claims filed against Argentina are before the International Centre for the Settlement of Investment Disputes (ICSID), the international arbitration arm of the World Bank.  At one point, claims against Argentina comprised over 40 percent of ICSID’s docket. 

Earlier this month, Chinese Premier Wen Jiabao traveled to Burma to meet with Prime Minister U Thein Sein and celebrate the 60th anniversary of Sino-Burmese diplomatic relations.  Over the last six decades, relations between China and Burma have varied greatly, ranging from the initial suspicious and mistrustful perceptions of each other in the 1950s to the strong “pauk pauw” (fraternal) relations China and Burma currently share.  In recent years, growing Chinese investment in Burma has only strengthened relations between the two countries.  For Burma’s military junta, maintaining good relations with a powerful and rich neighbor with UN Security Council veto power is extremely valuable; while for China, Burma is a strategic geopolitical ally for maintaining the stability of its border areas, securing access to natural resources for its western provinces, as well as providing trade and transportation access to the Indian Ocean, especially as construction begins on dual oil and natural gas pipelines linking Burma’s Arakan coast with China’s southwest Yunnan province. 

We documented China’s investment in the development of Burma’s natural resources in a 2008 report which identifies 69 Chinese companies involved in at least 90 hydropower, oil and natural gas and mining projects in Burma.  Given China’s vast investments in the development of Burma’s natural resources it comes as no surprise that during the one day celebration of the 60th anniversary of Sino-Burmese diplomatic relation, Premier Wen Jiabao and Prime Minister U Thein Sein were present for the signing of a new deal (in English; also available in Chinese) between China North Industries Co (NORINCO), a Chinese state-owned weapons and armament manufacturer, and Burma’s military junta for the Monywa Copper Project – a project which not only provides China with access to raw materials, but increases China’s growing influence in Burma.

According to the Chinese company NORINCO’s website, “Monywa…is abundant in copper mine resources with excellent mineral quality, which is of great significance to strengthening the strategic reserves of copper resources in our country, and to enhancing the influence of our country in Myanmar.”   

Supreme Court Follows Administration Recommendation, Declines to Hear Medical Experimentation Case

A few weeks ago, I blogged about the fact that the U.S. government had asked the Supreme Court not to hear an Alien Tort Statute (ATS) case against Pfizer, which accused the drug maker of engaging in nonconsensual medical experimentation in Nigeria.  Yesterday we learned that the Supreme Court had followed this recommendation:

The Supreme Court declined to hear an appeal by Pfizer Inc of a ruling that reinstated U.S. lawsuits by Nigerian families who said the drugmaker tested an experimental antibiotic on their children without getting adequate consent.

The justices, without comment, let stand a ruling by a U.S. appeals court in New York that allowed the lawsuits involving alleged harm caused by the drug, Trovan, to go forward.

This is a victory for human rights.  The Supreme Court's decision not to hear Pfizer's petition means the case will proceed.  The Second Circuit ruled that international law prohibited human experimentation, and that allegations that Pfizer tested experimental drugs on Nigerian children without their parents' consent adequately stated a violation of this prohibition.

While the U.S. courts are not always deferential to the views of the U.S. government--and they should not be, especially where the government's submissions are clearly politically motivated--this is one area where the administration's views are highly influential.  The Supreme Court, which specifically asked for the views of the U.S. government in this case, frequently follows the government's recommendation on whether to take a case or not.  While the Supreme Court often differs from the government's views on how to decide a particular case, the Court hears very few cases every year (about a hundred), and generally agrees with the government on whether a case is significant enough to merit its review.  So far the Supreme Court has declined to hear every corporate ATS case that has come before it.

ERI is pleased to present two guest perspectives on recent reports of mineral wealth in Afghanistan from our legal interns.  Both address how valuable minerals might affect the conflict in Afghanistan, and whether it might lead to the “resource curse” scenario seen in other resource-rich developing countries.

The post below is from DOng Keun Lee, a second-year law student at Washington University in St. Louis. The companion post is from Michelle Salomon, a second-year law student at the University of Maryland.

While the Times Square bomber reminded us of the fact that the US is still under the threat of terrorist attack, we are weary of the unrelenting bad news from the principal theater of the war on terror and thirst for signs of a better future in Afghanistan.  The release of a report on previously unknown mineral deposits - including huge veins of iron, copper and lithium – was timely and could point to a turning point for Afghanistan.  Yet we do not have to look far to see the dark side of natural resource wealth.  Before getting to the main point, I begin by touching on the issue of the interdependence between the stabilization of Afghanistan and the security of the US. 

Two systems of values encompassing a range of global issues permeate the discussion over terrorism: security and development.  Developed countries, which have by and large attained freedom from want, push forward counter-terrorism measures and mechanisms not only because they have primary responsibility for the maintenance of international security under the Charter of the U.N., but also because they have the ability to prioritize national security over development.  By contrast, developing countries, which are often trapped in cycles of poverty, struggle to bring to the table such agendas as foreign aid and debt relief.

ERI is pleased to present two guest perspectives on recent reports of mineral wealth in Afghanistan from our legal interns.  Both address how valuable minerals might affect the conflict in Afghanistan, and whether it might lead to the “resource curse” scenario seen in other resource-rich developing countries.

The post below is from Michelle Salomon, a second-year law student at the University of Maryland. The companion post is from DOng Keun Lee, a second-year law student at Washington University in St. Louis.

The article that appeared on the front page of last week’s New York Times could have caused any under-caffeinated commuter a couple blissful moments of hope: U.S. Identifies Vast Riches of Minerals in Afghanistan.  After a quick read, I oscillated between feelings of discomfort and relief over the prospect that $1 trillion in untapped minerals—iron, copper, cobalt, gold, and lithium to name a few—were discovered overnight in a country in dire need of an alternative to foreign aid and a means to rectify the impoverishing effects of protracted war.

My worries centered on the possibility of a “natural resource curse” scenario.  Richard Auty coined this term to refer to the paradox of the extreme poverty prevalent in so many countries with abundant natural resources.  Some empirical research on the phenomenon suggests that resource-wealthy countries are at a higher risk for civil war and slower growth than their resource-poor counterparts. Commenting on the recent news in Afghanistan, Keith Slack of Oxfam noted how mineral wealth often triggers a host of other devastating circumstances, such as corruption, human rights violations, worsened conditions of poverty, trauma, and conflict.

Details continue to emerge around the nuclear ambitions of the ruling military junta in Burma, recently exposed in a five-year study by the Democratic Voice of Burma and former UN nuclear inspector Robert Kelley.

Last week I posted an article on the Huffington Post explaining Total and Chevron’s role in financing the world’s newest nuclear threat, including details of the companies’ obstinate refusals to publish their last 18 years of payments to the junta, despite the explicit request of a global coalition of over 160 NGOs, scholars, unions, investment firms, and world leaders. 

But beyond the role of Chevron and Total, and in an ironic twist of geopolitical madness, it would appear as though the Burmese military regime is developing its perverse weapons program in partnership with North Korea, perhaps using payments from South Korean firms.  

A UN report leaked last month claimed North Korea is exporting nuclear and ballistic missile technology to Burma using intermediaries, shell companies, and overseas criminal networks designed to circumvent UN sanctions against Pyongyang. DVB has top secret receipts from transactions between the two countries, showing payments in the millions. 

Meanwhile, South Korean firms are in the process of developing what will become the Burmese junta’s largest source of revenue, the Shwe Gas Project, involving construction of a transnational gas pipeline from western Burma to Yunnan Province, China, measuring at least twenty times longer than Total and Chevron’s notorious Yadana pipeline. The Shwe Gas Movement (SGM) values the Shwe gas at a whopping $29 billion dollars; Daewoo International, the project’s operator, would have been making payments to the junta since at least 2000, when the company first signed an exploration agreement with the Burmese regime.