Publish What You Pay member Global Witness has released a new report, “Undue Diligence: How banks do business with corrupt regimes,” examining how major banks are playing a role in perpetuating the resource curse by doing business with unethical regimes. Global Witness has uncovered ties between banks and dictatorial regimes in Equatorial Guinea, vicious civil wars in Africa, human rights abusers in Central Asia and opaque extractive companies operating in Angola.

Revenue Transparency: A Priority for Good Governance and Energy Security

Across the globe, revenues from oil, gas and mining that should be funding sustainable economic development have been misappropriated and mismanaged. This Global Witness report considers five major examples of this problem: Kazakhstan, Congo Brazzaville, Angola, Equatorial Guinea and Nauru.

In these countries, governments do not provide even basic information about their revenues from natural resources. Nor do oil, mining and gas companies publish any information about payments made to governments.

Global Witness continues with its exposé of the mechanisms of wholesale state robbery in Angola, which began with its 1999 report ‘A Crude Awakening’. This report is the product of two years of investigations, and calls for for full transparency in the oil and banking sector in Angola.

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The current revision of the Equator Principles, a set of voluntary commitments by some of the world’s largest banks to condition their financing of projects on the adherence to environmental and social standards, provides an important opportunity for banks to take concerted action to improve accountability in extractive industry investments. Following the lead of the IFC and EBRD, banks should match emerging standards of best corporate practice by requiring revenue and contract transparency from all clients in the oil, gas and mining sectors.

David Bosco recently argued in a provocative piece for FP that “vulture funds“—global investment funds that buy up mostly poor countries’ debt on the cheap and then sue the countries to earn it back with interest and penalties—perform a necessary function in the international financial system. Essentially collection agencies for states, they hold “corrupt and irresponsible regimes to account.” Some critics of vulture funds, however, counter that these funds actually end up harming the populations of poor countries.

The oil and mining industries are facing a global epidemic of financial scandals, with billions of dollars in revenues unaccounted-for in some of the world’s poorest countries, according to a new report by Global Witness.

Today, the US Senate Permanent Subcommittee on Investigations will release a report that paints a damning portrait of financial impropriety and sleaze centred on Equatorial Guinea’s oil accounts at Riggs Bank in Washington DC.

Switzerland is about to reaffirm its commitment to fighting corruption and money-laundering, yet Geneva’s Public Prosecutor has inexplicably closed a corruption case linked to debt repayments by Angola to Russia.

European banks are setting up a huge new oil-backed loan for Angola, one of the most corrupt and impoverished countries in the world. The deal will further mortgage the country’s future oil income and undermine international efforts to make the government more accountable.