Tag Archives: Publish What You Pay

Guest Post: The Long, Long Road from Talking Transparency to Curbing Corruption in Mauritania

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GAB is delighted to welcome back Till Bruckner, an international development expert who recently spent six months living Mauritania, and contributes the following guest post based on his experience there:

What do fish and iron have in common? Answer: Mauritania, a largely desert country of less than four million people in north-western Africa, is immensely rich in both. At the same time, most Mauritanians are poor. And one of the biggest reasons is corruption and misgovernance.

Consider first fishing. Although Mauritania has some of the world’s richest fishing grounds, its marine wealth is carried away by foreign ships whose owners often bribe senior government figures to obtain fishing permits and take their catch straight to Europe or Asia. As a result, the country has failed to develop a significant fishing industry, or domestic fish processing industry, of its own, and a fishing industry that boasts an annual catch of half a million tons generates a mere 40,000 jobs inside Mauritania. Yet to the south, Senegal translates a catch of similar size into at least 130,000 jobs, while to the north, Morocco has turned its million-ton-a-year catch into a massive export industry whose turnover is projected to reach two billion dollars by the end of this decade.

Inland, deep in the Sahara, some mountains contain more metal than rock, consisting of up to 75% iron, one of the highest concentrations in the world. Mauritania nationalized its iron mines in 1974, creating the state-owned monopoly company SNIM. Its workers blast the slopes to rubble, and conveyor belts transport the rubble into waiting railway waggons. The longest train in the world then chugs its way across 700 kilometres of desert, loads its cargo onto giant foreign freighters—and neither the ore nor most of the money paid for it are ever seen again. The looting dynamics in Mauritania’s mining sector are illustrated by the stark contrast between Zouerate, the town in the Sahara where the iron is mined—which looks like a dystopian hellhole straight out of a Mad Max film—and the rich suburbs of the capital city of Nouakchott (which produces virtually nothing), where giant villas rise out of the sand, and oversized SUVs cruise the streets. And in Nouakchott itself, in the poor suburbs, families living five to a windowless room have to pay for their drinking water by the barrel.

The preferred prescription in a situation like this (from the usual suspects: development professionals, anticorruption activists, etc.) is a combination of transparency, accountability, and civil society monitoring. But Mauritania is actually doing well on those dimensions. Continue reading →

A U.S. Court Jeopardizes Corporate Transparency Rules, in the Name of Free Speech

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Transparency is often seen as an important anticorruption tool, perhaps nowhere more than in extractive industries. Notably, an international movement has called on extractive industry firms to “Publish What You Pay” (PWYP). The idea is that if it were public knowledge what these firms had paid for the concessions they receive from governments, the citizens in those countries (as well as journalists, NGOs, and others) would be better able to hold governments accountable for what they did with the money (and would make it harder for governments, or individual government officials, to lie about how much money they received). Many advocates therefore believe that it would be good public policy to enact PWYP rules that would compel these sorts of disclosures. But would such disclosure requirements violate the constitutional principle of freedom of speech? Alas, some U.S. judges seem to think so.

If the whole idea that disclosure requirements of this sort might infringe free speech rights seems bizarre, I’m with you—in my earlier post on this topic, discussing an earlier case that seemed to take this position, I used words like “absurd” and “inane.” Yet last week the U.S. Court of Appeals for the D.C. Circuit issued a new ruling (a follow-up to the earlier decision I ranted about last year) that seemed to strongly endorse a very broad constitutional protection for corporations against “compelled commercial speech,” which bodes ill. Although the most recent opinion, like the one I posted about last year, does not directly address PWYP mandates, the larger themes of the D.C. Circuit opinion are troubling, and suggest that this court (or at least some judges) may be hostile to the whole idea of using mandatory disclosures as a way to advance important public policy goals, including the fight against corruption. Continue reading →

Is It Unconstitutional To Compel Extractive Industry Firms To Publish What They Pay?

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“Publish What You Pay” (PWYP) is the slogan of the international civil society movement to promote transparency and accountability in the extractive industry sector (oil, gas, minerals, etc.). The idea is to get firms to disclose what they pay to governments, and to get governments to disclose what they receive, in connection with extraction projects. Viewing voluntary programs like the Extractive Industries Transparency Initiative as insufficient, the PWYP movement has been pressing for mandatory disclosure requirements. But would such requirements violate the right to free speech protected by the First Amendment of the U.S. Constitution?

That question may seem absurd. Requiring truthful disclosures by commercial firms of payments to foreign governments may or may not be an effective anticorruption measure, but is it even plausible that such requirements would violate the constitutional guarantee of free speech? I think the answer should be no. But alas, as is often the case, it’s not clear that my view is shared by the federal judges who are likely to decide this issue. Indeed, there are worrisome signs that the powerful D.C. Circuit Court of Appeals may endorse an absurdly expansive conception of the First Amendment that would block any effective PWYP mandate. Continue reading →