The repeal of a US law designed to crack down on corruption in the resources sector is a blow to the fight against bribery, mining groups, investors and NGOs have warned. The US Congress voted at the end of last week to repeal the “Cardin Lugar” provision, which compels American companies in the oil, gas and mining industries to disclose payments they make to foreign governments. The law was implemented in 2016, having been passed in 2010 as part of the Dodd-Frank reform act introduced by the Obama administration. Cardin Lugar, named after the senators who sponsored it, was designed to boost transparency by showing how much money foreign governments receive from selling mineral rights. It is estimated that some $150bn in payments have been disclosed globally in the last two years. However, the oil lobby in the US had complained that it made companies less competitive. FTSE 100 mining giant BHP Billiton said it supported “the establishment of a globally consistent disclosure framework”. While a spokesman for its peer Anglo American said: “As a multinational company we of course encourage the alignment of transparency requirements across jurisdictions.” Although the repeal will not directly affect London-listed companies, which must comply with a similar EU directive, it will make it harder for investors to understand the bribery risks of companies they invest in, said Lauren Compere, of Boston Common Asset Management. “It’s very short-sighted and destabilising,” she said.
Investors are concerned that the repeal of a US law to crack down on corruption in the resources industry could reignite bribery risk. This follows the vote by the US Congress last week to repeal the "Cardin Lugar" provision of the Dodd Frank reform, which forces US oil, gas and mining firms to reveal payments they make to foreign governments. Lobbyists complained that this rule hindered the oil companies, making them less competitive. The new rules will also apply to companies with operations outside the US.