Known as Section 1504 or Cardin-Lugar provision of the Dodd-Frank Act, the law requires oil, gas and mining companies to disclose payments they make to countries where they do business. While fighting this law in the US courts, these four companies sit on the global board of the Extractive Industries Transparency Initiative (EITI) – a set of voluntary principles under which governments publicly disclose their revenues from oil, gas and mining projects, and companies make parallel disclosures regarding payments they make to host governments for oil and mineral extraction.

The call to action comes as the EITI global conference kicks off in Sydney where representatives from civil society, oil, gas and mining companies and governments have gathered to discuss increasing transparency in extractive industries. The EITI board is launching a new standard that will require company and project-level reporting in line with Section 1504 as well as the recently agreed EU mandatory disclosure law. In addition to publicly held companies, which are also covered by the US law, the European directives will require large privately-held companies to disclose payments.

“From rural villagers in Africa to investors on Wall Street, the new EITI standard coupled with US and EU mandatory disclosure laws sends a strong signal to companies that the transparency train has left the station,” said Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining program who is speaking at the global conference.

Momentum for increasing transparency in the extractive industries started over a decade ago with the “Publish What You Pay” campaign followed quickly by the establishment of the EITI. Now, 11 countries have implemented EITI with the United States being the first G8 country to commit to implementation as well as pass a mandatory disclosure law. Mandatory disclosure ensures that citizens in resource rich countries will have access to payment information even if their government has not volunteered to join EITI. Companies can “support” EITI without disclosing payments in every country of operation.

“Transparency in the oil, gas and mining industry is now a global norm,” said Gary. “Oil companies should join citizens in resource-rich countries, investors, and energy consumers in supporting disclosure rather than seeking to turn back the tide through litigation and threaten global progress toward reducing corruption in resource-rich countries.”

While mining companies have not fought implementation of the US rule, the oil industry, through API, is now pursuing its lawsuit in the US District Court after the US Court of Appeals for the District of Columbia dismissed the case based on jurisdictional grounds. Oxfam will file a supplemental brief to rebut API’s unsubstantiated arguments.

“Protection of the law is essential for investors to asses a company’s risk and for communities in resource-rich countries to hold governments to account,” said Gary. “This lawsuit is wholly incompatible with the industry’s transparency commitments and support of payment disclosure through such initiatives as the Extractive Industries Transparency Initiative. It is unacceptable that oil companies should receive reputation benefits by supporting a transparency initiative while at the same time fighting a landmark payment disclosure law in US courts. ”

Additional Resources:

- VIDEO: Promote transparency: End the secret payments in oil and mining industries

"Oxfam America is grateful to the Hewlett Foundation for supporting our efforts to expand our work on making government finances in developing countries more transparent and accountable to citizens," said Raymond C. Offenheiser, president of Oxfam America. "We will work aggressively to improve the effectiveness of governments to use revenues from foreign aid, oil, gas and mining for poverty alleviation. And Oxfam will continue to shine a bright light on the current lack of transparency and accountability that perpetuates cycles of poverty and inequality in developing nations around the world."

The public finance transparency agenda has gained significant momentum and there will soon be much more information in the public domain concerning government resource flows – whether from aid, extractive industries, or internally generated funds – than there has been in the past.  The promise of transparency must be translated into real gains for the poor through accountable management of government finances.

“Transparency is simply the first step in moving towards accountability,” continued Offenheiser. “Change rarely happens unless national civil society organizations, citizens, journalists, parliamentarians and watchdog groups have the political space and capacity to promote public accountability.”

More than 1.5 billion people live on less than two dollars a day in resource-rich countries and in many cases resource wealth has fueled corruption, mismanagement, conflict and the violations of the rights of communities living on or near these resources. Since the late 1990’s, Oxfam America has been a leader on addressing extractive industries issues – once obscure on the international development agenda. Its Extractive Industries Global Program is rooted in deep relationships with local partners in 13 countries and drives policy change through local-global research, advocacy and campaigning strategies. The Hewlett Foundation grant will enable Oxfam to expand its program by increasing staff levels, program activities and impact. Through a new Center for Strategic Support on Extractive Industries Oxfam America (in collaboration with Oxfam Australia) will increase its support to other Oxfam affiliates starting work on the mining and oil sectors and make new investments in field office capacity focused on national government accountability.

The grant will also support Oxfam America’s Aid Effectiveness program, which campaigns to transform US foreign aid into a model that places citizens and governments of developing countries in the driver’s seat of their own developments. Since 2007, Oxfam has worked to build a deep base of field research, a strong policy reputation in Washington, partnerships with civil society leaders and government officials in developing countries, and an informed group of supporters in key congressional districts across the country. The Hewlett Foundation grant will help the program to advocate for increasing the quantity and quality of US foreign aid and ensure that it is more accountable to citizens in developing countries.

/ENDS

Oxfam America is an international relief and development organization that creates lasting solutions to poverty, hunger, and injustice. Together with individuals and local groups in over 90 countries, Oxfam saves lives, helps people overcome poverty, and fights for social justice. Oxfam America is an affiliate of Oxfam. To join our efforts or learn more, go to www.oxfamamerica.org

The lawsuit, filed by the American Petroleum Institute, the US Chamber of Commerce and two trade groups in October, was dismissed on jurisdictional grounds – an argument only Oxfam America, an intervenor in the case, made to the court.

“The court’s decision to dismiss the case on jurisdictional grounds is a victory for transparency supporters, investors and citizens in resource-rich countries,” said Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining program. “The case will likely go forward in the district court, but we believe the facts and arguments are on the SEC’s side. A comprehensive review of the record will show the hollowness of industry arguments.”

"The D.C. Circuit agreed with Oxfam that Congress, and not API, decides which court has the power to hear a case,” said Jonathan Kaufman, counsel for Oxfam at EarthRights International. “We're prepared to defend the transparency rules in the district court, where this case belongs."

Oxfam argued in its brief that API’s claims are without merit and that the SEC sensibly dismissed most of them in its final rule. Regarding oil industry claims that the statute violates the First Amendment, Oxfam argued that oil companies have “no constitutional right to keep payments to foreign governments secret.”

After the ruling, SEC spokesman John Nester said that "SEC staff continue to believe that our legal interpretation and economic analysis are sound and that this congressionally-mandated rule will be affirmed.”

Now that the European Union has agreed on similar payment disclosure rules, the industry should give up its fight against increasing transparency in the sector. Statoil, the Norwegian oil giant operating in places such as Angola, has said that it “has explicitly withheld support for the litigation” in the US.

“Global momentum is overtaking the API case,” said Gary. “It’s time for oil companies, such as Exxon, Chevron, BP and Shell, to embrace the tide of transparency and join Statoil in disassociating themselves from this groundless lawsuit.”

A bi-partisan group of members and former members of Congress, such as Senators Ben Cardin (D-MD), Carl Levin (D-MI), retired Senator Richard Lugar (R-IN) and Reps. Maxine Waters (D-CA) and Ed Markey (D-MA) also submitted arguments to defend the law, known as the Cardin-Lugar provision or Section 1504 of the Dodd-Frank Act.

API can “point to no evidence that the final rule would actually conflict with the existing laws of any foreign country. Absent that evidence, there is no practical basis even to consider an exemption,” stated the Senate brief.

Oxfam is calling for level funding for key anti-poverty programs, such as Feed the Future and the Millennium Challenge Corporation, and support of reforms to America’s food aid programs that would help reach millions more people with life-saving aid at no additional costs to the American taxpayer.

“In his proposed budget, President Obama has not only supported global anti-poverty programs that literally save lives, he has also proposed  long overdue reforms to bring our food aid system into the 21^st century,” said Paul O’Brien, vice president of policy and campaigns at Oxfam America. “The proposed reforms have already received positive reviews from Members of Congress on both sides of the aisle. Congress must fund these life-saving programs and move forward on common sense reforms to the food aid program.”

The United States is the world’s most generous donor of food aid, but numerous studies by the Government Accountability Office among others have shown that the system for delivering that aid is plagued by inefficiencies and waste. President Obama’s proposal would cut red tape, strip away needless regulations and allow humanitarian responders greater flexibly in emergencies, such as purchasing food from local or regional sources. Although a number of aid agencies, including Oxfam, are supporting this reform, special interests in Washington who profit from the current system are already trying to block President Obama’s proposal.

“Members of Congress who want to pursue fiscal responsibility should be the first to back the President’s efforts to modernize our aid programs, especially food aid,” said O’Brien. “The President’s proposal will get food to more hungry people faster, cheaper and more efficiently.”

The reform of US-funded food assistance programs is part of a wider effort on the part of President Obama’s Administration to modernize development assistance so that it’s more efficient and truly delivers in the fight against poverty. Other reforms, such as Implementation and Procurement Reform, are rooted in the recognition that there’s tremendous value in the power of local people to decide how aid is spent, and how to execute and lead their own development efforts in partnership with the US.

Despite coming under fire from vested interests in Washington, reforms already put in place by the Obama Administration are making waves on the ground in developing countries. Findings from a survey conducted by Oxfam America with citizens, civil society representatives, businesspeople and public officials in seven US aid recipient countries reveal that such reforms are making a difference and are getting noticed. Over 83% of respondents surveyed by Oxfam call US a better development partner than five years ago.

“New policies that are pushing the US government to invest more in locally defined development priorities have already demonstrated to achieve more sustainable results in the fight against poverty,” said O’Brien. "Congress must now deepen and accelerate reforms, while continuing to support the small but critically important parts of our country’s budget to save lives, help people lift themselves out of poverty, spur economic growth, and make the world a better and safer place.”

/ENDS

Oxfam America is an international relief and development organization that creates lasting solutions to poverty, hunger, and injustice. Together with individuals and local groups in over 90 countries, Oxfam saves lives, helps people overcome poverty, and fights for social justice. Oxfam America is an affiliate of Oxfam. To join our efforts or learn more, go to www.oxfamamerica.org

“Oxfam joined the Voluntary Principles for Security and Human Rights (VPs) in 2006, but has decided to terminate its membership at this time.  For the past 6 years, Oxfam was a leader in moving the VP agenda forward with key accomplishments in standards, complaint mechanisms, participation criteria and governance.

“Our decision stems in large part from our frustration at the lack of meaningful progress in independent assurance, despite more than ten years of deliberation and discussion -- and notwithstanding the commendable efforts of some companies to develop relevant indicators on the margins of the VPs.  We believe that independent assurance - as a condition of membership - is essential to building and maintaining the credibility of the VPs and strongly encourage members to push for its adoption.

“We recognize the important contributions the VPs have made to the protection and promotion of human rights. We also recognize the on-going work of member companies working towards improvements in their on-the ground implementation of the VPs in many of their operations.  We continue to be supportive of the VPs and wish it the best of success in its efforts.”

The report, Human Rights and Social Conflict in the Oil, Gas, and Mining Industries, aims to help NHRI’s evaluate their effectiveness by providing a framework to analyze their successes and shortcomings in addressing human rights abuses around oil, gas and mining projects. NHRI’s have been internationally recognized human rights actors since 1993, when the United Nations adopted what are known as the Paris Principles to help establish human rights norms at the national level. To date, there are 99 of these institutions globally.

“The growing popularity of National Human Rights Institutions in the last decade is a positive sign that governments are beginning to think about human rights at the national level,” said Emily Greenspan, senior policy advisory with Oxfam America’s oil, gas and mining program. “It’s now time for governments to give these institutions teeth in order to play a more active role in preventing human rights abuses and to respond quickly and effectively when these abuses do occur.”

From Peru to Ghana, controversies surrounding oil, gas and mining projects have in many instances erupted into social conflict and violence. While some NHRI’s have been successful at mitigating violence around oil, gas and mining projects, there is significant room for improvement, according to the report.

The research finds that these institutions tend to face many obstacles, such as inadequate funding or lack of independence from a political party. Oxfam highly recommends that governments and civil society take advantage of the evaluation criteria presented in the report to measure the weaknesses and strengths of their country’s human rights institution.

“In the context of the extractive industries, NHRIs have the potential to play a critical role in preventing human rights abuses,” said Greenspan. “Governments should invest adequate resources to enable these institutions to perform effectively. At the same time, NHRIs should ensure that they coordinate closely with civil society and oil and mining companies, and most importantly with project-affected communities.”

For example, the case study on Ghana highlighted in the report finds that its human rights institution -- Commission on Human Rights and Administrative Justice (CHRAJ) -- should improve communications with communities affected by oil, gas and mining operations. Furthermore, CHRAJ needs to educate community members of their rights, how extractive projects may violate their rights and how they can seek remedy if these rights are violated.

“As the report highlights, CHRAJ should develop a strategy for creating a dialogue with local communities in order to take a more proactive approach to preventing human rights abuses in the mining and emerging oil sectors,” said Augustine Niber, executive director of the Ghana-based Center for Public Interest Law.

“If CHRAJ and other NHRIs begin to effectively and proactively engage with project-affected communities in preventing human rights abuses and conflict, local communities, oil and mining companies, and host governments will all benefit.”

Notes to Editor:

- Webcast of the report launch can be viewed here.

Similar to the recently passed US “Cardin-Lugar” provision or Section 1504 of the Dodd-Frank Act, the European directive goes further by requiring both public and privately-held companies to disclose their payments. Like the US law, companies will be required to disclose payments, such as taxes and royalties, above 100,000 Euros for individual projects in every country of operation.

“With the US law covering the vast majority of internationally operating oil companies and world’s largest mining companies along with the European rules covering even more companies, the transparency net will be cast far and wide,” said Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining program. “This is a huge victory for citizens living in resource rich countries. We applaud Europe’s leaders and Members of the European Parliament for not caving under oil industry lobbying efforts to water down the rules.”

In the US, an oil industry lawsuit was filed against the Securities and Exchange Commission (SEC) to overturn the rules promulgated by the regulatory agency last August. Oxfam has intervened in the lawsuit on the side of the SEC and the US Court of Appeals heard oral arguments in the case on March 22.

As in the US, EU regulators and political leaders were not convinced of any host country prohibitions against disclosing this payment information. Like the SEC rule, the EU agreed directive does not allow for any company exemptions to the payment disclosure requirement.

"The strong law in the US and the EU requirements agreed today show that payment transparency has already become a global norm,” said Gary. “Oil companies should join citizens in resource-rich countries, investors, and energy consumers in embracing transparency, rather than seeking to turn back the tide through litigation."

The EU directive and the US law will complement the Extractive Industries Transparency Initiative, a set of principles adopted by some countries under which governments publicly disclose their revenues from oil, gas and mining projects, and companies make parallel disclosures regarding payments they make to host government for accessing publicly owned resources.

Section 1504, or the “Cardin-Lugar” provision, requires US and foreign oil, gas and mining companies reporting to the SEC to disclose annually the tax, royalty and other payments that they make to governments in every country where they do business. In October, the American Petroleum Institute (API) and three other business associations sued the SEC in an effort to overturn the law. The SEC denied an industry request to hold on implementation while the legal case proceeded, calling industry arguments “unpersuasive.”

“From Equatorial Guinea to the United States, the Cardin-Lugar amendment sheds a powerful light on the murky world of financial flows between oil and mining companies and governments,” said Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining program. “Oil industry actions in this case show that they would rather keep investors and citizens in the dark than operate in a transparent and responsible manner.”

Among other arguments used against the rule, attorneys for API unveiled a new tactic by claiming that disclosures required by the final rule would violate oil companies’ First Amendment rights.

“There simply is no constitutional right to keep payments to governments secret," said Jonathan Kaufman, staff attorney at EarthRights International and co-counsel representing Oxfam America as intervenor in the lawsuit.

Kaufman also said that judges expressed skepticism that the case belonged in the Appeals Court in the first instance. “Not only is the oil industry trying to overturn the will of Congress, its arrogance extends to trying to get this case heard in a court where it doesn’t belong.”

“If the court agrees with the companies’ challenge, it could undermine the countless reporting statutes and regulations that require disclosure of information on corporate activities to the public,” continued Kaufman.

Global mining firms have refused to join the last ditch legal tactics employed by the oil industry and civil society groups from around the world have called on the oil industry to drop the lawsuit. Last month, the Norwegian global oil company Statoil, an API member, publicly disassociated themselves from the API lawsuit.

“I come from a country where voluntary transparency approaches simply haven’t worked,” said Tutu Alicante, executive director of EG Justice, an organization fighting for transparency and human rights in oil-rich Equatorial Guinea and a witness to today’s court proceedings. “This law will make sure that the billions of dollars paid by US and foreign firms to my government are fully transparent.”

“Oil companies that don’t have anything to hide should follow Statoil’s lead and stand up for what’s right,” said Gary. “If API’s overblown rhetoric regarding costs of compliance were true, Statoil would be using every available means to fight disclosure.”

The US Securities and Exchange Commission (SEC) approved final regulations implementing Section 1504 or “Cardin-Lugar” provision last August. The law requires oil, gas and mining companies reporting to the SEC to disclose tax, royalty and other payments to governments in countries where they do business. In October, API, the Independent Petroleum Association of America, the US Chamber of Commerce and the National Foreign Trade Council sued the SEC in an effort to overturn the statute and the final regulations.

“We are encouraged to see a major oil company with global operations in such places as Angola, China and the United States refusing to support a lawsuit based on unsubstantiated claims,” said Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining program.

API’s members, such as Statoil, Chevron, BP, ConocoPhilips that have publicly supported anti-corruption and transparency measures in the past have been under pressure from campaigners to take a stand against the industry lawsuit. Statoil is the first oil company to come out publicly against the lawsuit to date.

"Statoil has not supported the lawsuit initiated by API; in fact, Statoil has explicitly withheld support for the litigation,” stated Baiba Rubesa, Statoil’s Vice President for Corporate Social Responsibility in a letter to anti-corruption campaigners Global Witness in London.

Statoil has been a leader in sector transparency, publicly disclosing payments in every country of operation since 2007, including in some countries where API has claimed disclosure is prohibited by law. In contrast to some claims made by API and other companies, Statoil says “such reporting is not an impediment for doing business, but has in fact been a competitive advantage for company.”

The letter follows three court briefs submitted last month to the US Court of Appeals for the District of Columbia Circuit by prominent Members of Congress, as well as Oxfam America, in response to API’s arguments. The briefs defend the law and highlight the lawsuit's frivolity.

“From Equatorial Guinea to the United States, the Cardin-Lugar provision sheds a powerful light on the murky world of financial flows between oil and mining companies and governments,” said Gary.

“Oil companies that don’t have anything to hide should follow Statoil’s lead and stand up for what’s right. If API’s overblown rhetoric regarding costs of compliance were true, Statoil would be using every available means to fight disclosure. Their rejection of API’s scorched earth legal approach reveals the emptiness of API’s claims.”

Known as Section 1504 or the Cardin-Lugar provision of the Dodd-Frank Act, the sunshine law will arm the public with information it can use to track the amount of money governments receive from oil and mining companies and help investors assess a company’s risk. In October, the American Petroleum Institute (API), a lobby group representing companies such as Chevron, ExxonMobil, BP and Shell, the Independent Petroleum Association of America, the US Chamber of Commerce and the National Foreign Trade Council sued the Securities and Exchange Commission (SEC) following the issuance of final rules in August.

“From Equatorial Guinea to the United States, the Cardin-Lugar amendment sheds a powerful light on the murky world of financial flows between oil and mining companies and governments,” said Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining program. “Protection of the law is essential for resource-rich communities in poor countries around the world and here in the United States to hold governments to account.”

Senators Ben Cardin (D-M) and Carl Levin (D-Mi) joined recently retired Senator Richard Lugar (R-Ind) in filing a joint brief highlighting the years of study and history of the legislation that became known as the Cardin-Lugar amendment and countering some of the industry’s arguments. In particular, the Senators stressed the industry’s demand that the SEC carve out exemptions for companies flies in the face of the plain language of the statute and the evidence presented during consideration of the proposed rule.

API can “point to no evidence that the final rule would actually conflict with the existing laws of any foreign country. Absent that evidence, there is no practical basis even to consider an exemption, and if the agency allowed exemptions, this would provide an incentive for foreign governments to subvert U.S. law by passing laws that prohibited disclosure,” stated the Senate brief.

Another brief signed by several Members of Congress, including ranking member of the House Financial Services Committee Maxine Waters (D-Ca) and ranking member of the Natural Resources Committee Ed Markey (D-Ma) argues that the Cardin-Lugar amendment will ensure “potential investors will have access to, among other things, material and other information about the commercial, political, and legal risks companies may face.”

Oxfam’s intervenor brief highlights how the law will support stable and democratic governments while helping investors calculate a company’s risk. The brief further argues that API’s claims are without merit and that the SEC sensibly dismissed most of them in its final rule. Regarding oil industry claims of First Amendment violations, the brief says that oil companies have “no constitutional right to keep payments to foreign governments secret.”

“The oil industry lawsuit is based on a series of unsubstantiated claims,” said Gary. “As the Senate and House briefs emphasize, Congress was clear in the statutory language requiring public reporting of oil, gas and mining company payments at the government and project levels.”

The Senate brief also explains Congress’ judgment that voluntary payment disclosure through the Extractive Industries Transparency Initiative (EITI) was insufficient. The EITI is voluntary initiative implemented by countries whose governments sign-up to do so.

The three briefs submitted yesterday follow the US Department of State’s declaration last week that Cardin-Lugar advances US foreign policy interests in increasing transparency and reducing corruption.

“Corruption and mismanagement of these resources can impede economic growth, reduce opportunities for U.S. trade and investment, divert critically-needed funding from social services and other government activities, and contribute to instability and conflict,” declared the State Department.

“We are heartened to see prominent members of Congress and the US State Department stepping forward to defend the rules promulgated by the SEC,” said Gary. “The oil industry should drop its last ditch effort to deprive investors and citizens of important information regarding billions of dollars companies pour into countries for oil and mineral projects.”

The movement for mandatory disclosure of these payments continues to grow rapidly outside of the United States. The European Union is expected to finalize rules complementing the US law early this year.

Note to Editors:

• House brief signed by Edward J Markey, Maxine Waters, Eliot L Engel, Jim McDermott, Gregory W. Meeks, Betty McCollum, Jim Moran, Earl Bluenauer, Andre Carson, Sam Farr, Peter Welch, And Barbara J Lee.
• Senate brief signed by Benjamin Cardin, former Senator Richard Lugar, and Carl Levin

Read the full briefs here:
Oxfam intervenor brief 
Senate amicus brief 
House amicus brief

Despite receiving a fair hearing in the SEC’s two-year rule-making process and before Congress passed the law, the oil industry is trying to avoid compliance with the law which requires disclosures by 2014. On Monday, the plaintiffs submitted their formal petitioner’s brief in the first salvo of the legal proceedings in the US Court of Appeals for the District of Columbia. Their lawsuit was initially filed in October.

In response, Ian Gary, senior policy manager with Oxfam America’s oil, gas and mining program, issued the following statement.

“The global tide is moving toward more openness in the extractive sector, not less. Oil companies should side with investors and citizens, not kleptocrats,” said Gary. "If payment disclosures truly hurt bottom lines as they claim, then leading companies like Statoil and Talisman Energy would not already be disclosing this type of information. Any well-run company should already collect and account for this information and if systems aren't in place for tracking payments, investors need to ask why.

“The European Union is close to finalizing a similar requirement and there is concrete movement in Canada. The companies behind the API suit are fighting a losing battle,” said Gary. “As a party to the case, Oxfam will continue fighting to protect the law to ensure that the court isn’t just hearing from the oil companies as they try a last ditch effort to use the courts to hide payments from public view.”

In reaction to the resolution, Oxfam America’s senior policy advisor for Humanitarian Response, Scott Stedjan stated the following:

“The United States already has some of the toughest regulations governing the international trade of weapons. This treaty is about getting other countries with weak or ineffective laws to raise their standards.

“The existing patchwork of laws around the globe allows irresponsible arms brokers to operate in the black holes of the international regulatory system and circumvent the jurisdiction of countries like the United States. These weapons often end up in the enemy and rogue hands, putting civilians and US troops at risk every day and threatening our national security.

“Our nation has the opportunity and the responsibility to stand on the right side of history. This resolution must not block the progress we’ve made to date. For the millions of people living in fear and poverty around the world there is no time left to waste.

“The Obama administration has publicly stated numerous times that it will not support a treaty that infringes on Second Amendment rights guaranteed by our Constitution. There is also language in the treaty text acknowledging that the trade of weapons for recreational, cultural, historical, and sporting activities and lawful ownership is legitimate and will remain to be determined by a country's national laws. Members of the House of Representatives need to separate fact from fiction and stop fueling the paranoia special interest groups are using for fundraising purposes.”

The American Petroleum Institute (API), the US Chamber of Commerce and two trade groups submitted a motion to the SEC to delay implementation of the agency’s final rule after filing a lawsuit to strike down the regulation and overturn the law. The motion asked the SEC for a stay of the rule until the lawsuit was concluded.

“We commend the SEC for refusing to give in to the demands of Big Oil and not caving under industry pressure,” said Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining program. “Protection of the final SEC rule is essential to shedding light on the murky world of financial flows between oil and mining companies and governments.”

Known as Section 1504 or the Cardin-Lugar provision, the law would help stem corruption in resource-rich countries and provide a wealth of information to investors. The SEC issued final regulations on August 22, 2012, requiring companies to start reporting their payments for fiscal years ending after September 30, 2013. Despite a fair hearing in the SEC’s two-year rulemaking process and during the time that Congress considered the law, the oil industry continues to fight the law.

In its decision denying the stay issued last night, the SEC said that the industry groups have “not demonstrated a likelihood of success on the merits” and that their arguments regarding alleged competitive harm were "too speculative and unsupported by evidence to warrant a stay.” While companies have alleged that some foreign governments prohibit the disclosures required by the law, the SEC said that the oil industry has "not demonstrated that it is likely that any foreign government currently prohibits" disclosures. The SEC also concluded that the groups “have failed to carry their burden to demonstrate imminent, irreparable harm.” Merely spending money to prepare to comply with a rule does not constitute irreparable harm, the agency concluded.

Last week, Senators Cardin, Lugar, Levin and Leahy wrote to the SEC calling on them to deny the stay. “Any delay in implementing the rule will further frustrate the intent of the statute, and cause harm to investors and citizens in the United States
and abroad, who anxiously await these disclosures to analyze and manage risk and hold their governments to account,” the Senators said in their letter. The SEC agreed that granting a stay would “not serve the public interest.”

“API and its members say they support transparency in principle, but in practice they’ve launched a legal assault on this landmark US law,” said Gary. “If oil companies have nothing to hide then they should disassociate themselves from the lawsuit.”

Last week, the court hearing the case accepted Oxfam America’s request for leave to intervene in the lawsuit. Final briefs are due in that case in January.

“We’ve been a leader in this fight since the beginning and we are intervening in the case to ensure that the court is not just hearing from the oil companies,” said Gary. “Citizens in resource-rich countries and investors in the US are eagerly awaiting the disclosures. We will continue fighting until this landmark victory for transparency over secrecy is fully implemented.”

Oxfam America is represented in the legal proceedings by EarthRights International, Goulston & Storrs and Meyer Glitzenstein & Crystal.

"An agency doesn't have to suspend its rules just because the oil companies disagree with them, said Jonathan Kaufman, staff attorney with EarthRights International and counsel for Oxfam America. “API had to show that it would suffer serious, immediate harm if the rules went into effect, but all it offered was speculation and scare tactics. The SEC recognized this and denied the stay."

The Securities and Exchange Commission (SEC), the regulatory agency responsible for implementing the law, issued final regulations on August 22, 2012 and companies are required to start reporting their payment for fiscal years ending after September 30, 2013. However, the American Petroleum Institute (API), a lobby group representing companies such as BP, Exxon, Chevron and Shell, the Chamber of Commerce and two trade groups filed a lawsuit against the SEC last month to overturn the law and block implementation of the rules.

"Big oil is using their corporate power to try getting out of following the law that is clearly in the public interest,” said Ian Gary, senior policy manager of Oxfam America's oil, gas and mining program. "They had a fair hearing in the SEC’s two-year rulemaking process and during the time that Congress considered the law. The SEC and courts should not cave under industry pressure.”

Oxfam America’s motion to intervene argues that API's lawsuit would negatively impact Oxfam’s mission to ensure citizens in oil and mineral rich countries know how much money their governments receive from the extraction of oil and minerals. Since the organization also holds stock, the motion also argues that the lawsuit undermines Oxfam’s status as an investor in companies such as Chevron and Exxon.

"We've been a leader in this fight since the beginning and we intend to seek to protect this law and SEC’s final regulations in the courts,” said Gary. "We will continue fighting to ensure that this landmark victory for transparency over secrecy is fully implemented.”

Protection of SEC’s rules is essential to shedding light on the murky world of financial flows between oil and mining companies and governments. The communities Oxfam represents in the United States and in foreign countries are eagerly awaiting the disclosures to hold their governments to account.

“We seek to intervene to ensure that the court isn’t just hearing from the oil companies as they try a last ditch effort to use the courts to keep legitimate payments from public view,” added Gary.

In a recent review, the Government Accountability Office (GAO) concluded that the SEC "complied with applicable requirements in promulgating" the final rule for Section 1504. Investors worth more than $1.2 trillion weighed in with the SEC, asking the agency to quickly implement a final rule that followed the statutory language and Congressional intent. Several companies, such as Talisman Energy, Statoil, AngloGold Ashanti and Newmont Mining already disclose payments in every country of operation, in some cases at the project level as the law and final rule requires. The final rule does not require companies to disclose contracts or contract terms, nor does it require companies to disclose proprietary information.

"If payment disclosures hurt bottom lines, then leading companies like Statoil and Talisman Energy would not already be disclosing this type of information," said Gary. "Any well-run company should already collect and account for this information and if systems aren't in place for tracking payments, investors need to ask why."

Last month, a European parliament committee voted for a law that goes beyond Section 1504 and expected to approve shortly.

The law, known as Section 1504 or “Cardin-Lugar” provision of the Dodd-Frank Act requires oil, gas and mining companies to disclose payments, such as taxes, they pay to foreign governments for the extraction of oil and minerals. After missing the Congressional deadline by more than a year, the SEC issued final rules on August 22, 2012 and companies are required to start reporting their payments for fiscal years ending after September 30, 2013. Oxfam America believes the SEC conducted a robust and lengthy input process, thoroughly addressing public comments and analyzing the economic consequences of the final rules.

“By approving final regulations for the Cardin-Lugar provision, the SEC acted to lift the veil of secrecy on billions of dollars that flow every year from oil and mining companies to governments around the world,” said Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining program. “The agency followed the letter of the law. Now it’s time for oil companies to comply with the final regulation, not fight it in the courts.

“We are greatly disappointed that the oil industry is trying to use the courts to bully the SEC and push for secrecy in their payments to governments.” said Gary. “We call on companies, such as BP, Exxon, Chevron and Shell, who are hiding behind industry associations to do their dirty work while espousing transparency rhetoric, to disassociate themselves from the lawsuit.”

In a recent review, the Government Accountability Office (GAO) concluded that the rule promulgated by the SEC is legally sound. Investors worth more than $1.2 trillion weighed in with the SEC, asking the agency to quickly implement a final rule that followed the statutory language and Congressional intent. Several companies, such as Talisman Energy, Statoil, AngloGold Ashanti and Newmont Mining already disclose payments in every country of operation, in some cases at the project level as the law and final rule requires. The final rule does not require companies to disclose contracts or contract terms, nor does it require companies to disclose proprietary information.

“If payment disclosures hurt bottom lines, then leading companies like Statoil and Talisman Energy would not already be disclosing this type of information,” said Gary. “Any well-run company should already collect and account for this information and if systems aren’t in place for tracking payments, investors need to ask why.

“The oil industry loves to trumpet their contributions to society but when a new law requires them to tell the public exactly how much money they pay to governments around the world, they bring out the lobbyists and file a lawsuit,” continued Gary. “This lawsuit is wholly incompatible with the industry’s transparency commitments and embrace of payment disclosure through such initiatives as the Extractive Industries Transparency Initiative.”

NOTE TO EDITORS:

The lawsuit was filed in the United States District Court for the District of Columbia by the American Petroleum Institute (API), the US Chamber of Commerce, the Independent Petroleum Association of America and the National Foreign Trade Council.