Oil, Diamonds, and Sunlight: Fostering Human Rights through Transparency in Revenues from Natural Resources

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Sunlight is said to be the best of disinfectants; electric light the most efficient policeman. (1)

I. INTRODUCTION

Government corruption provides both an incentive and a means for human rights violations. Corruption provides an incentive for government officials to engage in human rights abuses in order to retain their access to the public coffers. Corruption provides government officials with a source of wealth and power that can be harnessed to inflict human rights abuses on anyone who attempts to stand in their way. It is therefore not surprising that commentators have noted a clear link between government corruption and human rights violations. (2) One of the best ways to combat such corruption is through transparency, for corruption does not grow well in sunlight. And some of the largest sources of the means and fruits of corruption are the industries that extract oil, gas, and minerals in natural resource-rich countries.

Recently, a few non-governmental organizations (NGOs) have started to bring these connections between corruption and the extractive industries (the industries that extract, produce, or mine oil, gas, or minerals) into the public eye. In 2000, the International Monetary Fund (IMF) published a report stating that transparency in oil revenue is necessary for the sound economic development of Angola. (3) In commenting on that report, Human Rights Watch added that transparency in oil revenue is a human rights issue in places like Angola, where oil revenues are used to finance civil wars in which hundreds of thousands of people die and over a million people are internally displaced. (4) The director of Transparency International also argues that transparency is needed to combat corruption and promote human rights. (5) As these few organizations have begun to recognize, actors in the international community who are striving to improve human rights could accomplish a great deal by promoting transparency in revenue for extractive industries. Disclosure of all economic benefits that governments and their officials gain from extractive industries is the first step towards addressing the corruption that allows many of the world's most repressive regimes to stay in power and increases their incentives to do so.

This Note examines the links between human rights and corruption, and between corruption and transparency. It then examines the lessons that those seeking greater transparency can learn from current anti-corruption measures and describes some recent proposals for bringing transparency to extractive industries and the governments with which they deal. The Note then proposes and describes the contours of anti-corruption transparency initiatives targeted at extractive industries and the governments with which they do business. Finally, it addresses potential obstacles to implementing initiatives for combating corruption that relate to extractive industries.

II. CORRUPTION AND HUMAN RIGHTS: AN IMPORTANT LINK

What is corruption and why does it matter for human rights? "Corruption is commonly defined as the 'misuse of public power by heads of state, ministers, and top officials for private pecuniary profit.'" (6) There are numerous types of corruption. Examples could include high-level officials receiving payments in exchange for awarding government contracts; low-level bureaucrats requesting payments for providing government services that by law should be free (such as access to water, school, and garbage service); government officials stealing from the government treasury; or officials using government money to consolidate their own power. This Note focuses on a specific type of corruption: the diversion of state revenue from a country's extractive industries sector into the pockets of government elites and into purchases of arms meant solely to subjugate and repress the domestic population or to enrich arms traders who are closely associated with government officials. …