The “resource curse” refers to those nations blessed with substantial mineral wealth where most citizens live in abject poverty. Often these countries have leaders whose malfeasance of their nation’s mineral resources has led to widespread corruption, tremendous inequality, and political instability.
Enter the Extractive Industries Transparency Initiative (EITI). Since 2003, EITI has helped people follow the money. EITI countries ask their companies to publish payments to governments and match those numbers to government receipts.
Last month, the United States Extractive Industries Transparency Initiative (USEITI) published its first report. The good news is that the numbers match up well.
A multi-stakeholder group (MSG) of industry, government, and civil society representatives decides which revenue streams the report will include. The Department of Interior’s Office of Natural Resources Revenue (ONRR) unilaterally disclosed all 2013 payments received from companies on public lands and waters. Unfortunately, only a disappointing 12% of eligible companies agreed to have their Internal Revenue Service (IRS) corporate income tax payments reconciled.
But Where is the Gold?
Perhaps most revealing though is not what the report contains, but what is left out: revenue from gold, silver, copper- the hardrock mineral commodities. The United States has plenty of hardrock minerals. But, unlike coal, oil, or gas, hardrock mining companies pay no royalties for the precious metals they extract from our lands. No revenues mean no payments to report or reconcile.
The Remaining Bygone Era of Gold Giveaways
An 1872 law, designed during an era of Westward expansion, still governs domestic hardrock mining. A relic of our Nation’s Manifest Destiny, the 1872 Mining law to this day allows miners to stake mining claims on public lands, acquire title to those lands for virtually nothing, and extract the minerals for free. While it’s good that US EITI’s first report illustrates this disparity between revenues for oil, gas, and coal versus hardrock mining, next time around the MSG should consider an alternative reporting threshold for hardrock commodities. One option is to use production values.
This Year's Resolution
Along with the Administration’s Open Government Partnership and the Security and Exchange Commission’s (SEC) recent disclosure rules, USEITI helps form the triumvirate of mining and drilling transparency. Moving toward a more perfect union, we should improve project level reporting, income tax reconciliation, and find a way to include more traditional resource curse commodities like gold.