Natural Resources and Violent Conflict - WaterWiki.net

48 swanson, oldgard, and lunderesource revenue wealth—that is, on governments not yet in a positionto refuse aid conditionality. Such procedures have not yet been adequatelytested in practice.Reporting by CompaniesIf the host government does not provide information about its resourcerevenues, an indirect way of viewing these flows is to look at the paymentsthat resource extraction companies make to the government. Intheory, disaggregated records of payments by companies to individualgovernments could be reaggregated to provide an overview of theamount of money being made available. In practice, this is difficult forseveral reasons.The existence of collective action problems among companiesmeans that, in practice, host governments can put a great deal of pressureon companies (especially in the oil industry) not to reveal suchinformation, often citing “commercial confidentiality” agreements. Inthe face of host-government opposition, companies are not inclined toreveal information that may cause them to lose government favor andthus their comparative advantage with respect to rival firms.In addition, as many international oil companies have pointed out,transparency of payments by international companies would provideonly part of the picture. It would not necessarily cover the oftensignificantrevenue flows through government-owned extraction companies.This is especially the case with joint ventures where thegovernment-owned extraction company is not paid directly by the foreigncompany but receives a share of the resources or revenue of thejoint venture. In practice, most companies report only what is requiredby regulators in their host and home countries.Confidentiality Provisions in Contracts. Many companies in theoil sector have signed contracts with developing-country host governmentsor state oil company partners that have confidentiality clauses.Such clauses often include requirements not to reveal tax and otherpayments that have been made to the host government.A survey of four OECD jurisdictions (Alaska, Alberta, Norway,and the United Kingdom) and three non-OECD jurisdictions (Angola,Myanmar, and Nigeria) finds that OECD countries do not prohibit thedisclosure of payments to the host government; this occurs only innon-OECD countries. According to OECD (2002b, p. 18), “This suggeststhat there are ways of protecting the legitimate interests of bothbusiness and governments while not compromising revenue transparencyand accountability.”