A British campaign group called on governments last week to clamp down on big oil companies, as it provided evidence of the damaging impact of the industry on the global economy.
The recommendations in a report by Christian Aid come as Britain and the United States press ahead with plans to rapidly bring back on stream — and directly control — oil in Iraq. The report, Fuelling Poverty: Oil, War and Corruption, warns that plans to rebuild the Iraqi economy with oil wealth could lead to greater poverty for the population, increased corruption and civil strife.
The charity calls for an international commission to be established ”to review the overwhelming evidence that oil wealth is driving countries into poverty and to draw up new global regulations to reverse this injustice”.
Christian Aid makes five recommendations for its ”global oil deal”, seeking to ensure oil revenues benefit development rather than corruption. Greater transparency is one of the main targets.
Oil companies should be required to reveal payments to all governments. Regulations allowing payments to be listed in a vague ”rest of the world” category should be removed.
Improved standards of public accounting must be introduced in developing countries, the charity urges. Payments from oil companies and the audited figures for oil income should be published so that the public can see where the money is spent.
International bodies such as the World Bank, the International Monetary Fund and export credit guarantee agencies should help to ensure that oil companies adhere to transparency targets.
Trust funds should be established, as occurred in the Shetland Islands and Norway, to receive much of the oil revenues, ensuring that a sudden influx of wealth does not boost inflation and that future generations benefit.
Lastly, the charity suggests, a system of certification should be introduced to prevent trade in ”blood oil”, similar to the scheme for the diamond business that seeks to stop the sale of gems from conflict zones in West Africa.
Publication of the report coincides with Exxon Mobil being investigated in the US over links with a Kazakh-stan corruption case and France’s Elf (now part of Total) coming under the legal spotlight again over its activities in Africa.
Christian Aid made its recommendations after studying the negative impact of oil on countries including Kazakhstan, Angola and Sudan.
It says oil economies achieve slower growth than countries without the resource, military expenditure tends to be higher and life expectancy is lower.
The report points out that Iraq has pumped up to 3,5-million barrels of oil a day since nationalisation 30 years ago, yet almost half the population is illiterate and almost a quarter of children under five are underweight.
”Iraq, then, has already drunk a deep draught of oil’s ‘lethal cocktail’ … Case studies from other oil-producing countries show that, unless a dramatically different approach to using oil revenues is adopted, the situation could continue to decline.” — Â