FOR IMMEDIATE RELEASE
Members of Congress & Oxfam defend oil and mining transparency law of Dodd-Frank ActJan 17, 2013
Washington, DC – International relief and development organization Oxfam America and prominent Members of Congress have filed briefs with the US Court of Appeals for the District of Columbia Circuit in response to an oil industry lawsuit seeking to overturn a landmark law requiring companies to disclose payments they make to governments for oil and mineral extraction.
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