It’s time to finally end secret payments in the oil and mining industries.
It’s been almost five years since Congress passed the Dodd-Frank Act, which required oil, gas, and mining companies to publish what they pay. Now it’s time for the Securities and Exchange Commission to finish the law as Congress required – and they’ve already done most of the work.
Last fall, Oxfam sued the SEC asking it to finish the transparency provisions – and issue strong rules that are consistent with a global standard that covers many of the industry’s biggest competitors. Now we’re waiting on the Court to ask the SEC to finish the job.
Oxfam sued the SEC because it still had not finished the transparency laws, passed by Congress and signed by President Obama in 2010. Big Oil sued the SEC when it first issued the laws, but nothing in that lawsuit says the SEC can’t require public reporting of company-by-company and project-level payments – it just says that the SEC needs to use its discretion and provide a fuller analysis of its decisions. With similar legislation now set in stone in the United Kingdom, France, European Union, Canada and Norway, the industry’s arguments against this historic transparency legislation have been debunked – and even the American Petroleum Institute has called on the SEC to finish the legislation soon.
Ian Gary, Oxfam’s senior policy manager, says “The SEC can finish strong and is required by Congress to act promptly. With transactions worth billions of dollars in oil, gas and mining projects taking place in some of the poorest, most corrupt and highest-risk countries in the world, citizens and investors simply cannot wait any longer. Other markets like the UK and France have implemented a European Union (EU) law modeled on the SEC’s original strong rules before the end of the year, making the Commission’s job easier to finish.”
“The SEC can finish these rules promptly and satisfy Congress’ mandate – and we are eager to work with them to do so,” said Gary. “We continue to hope that they will act to issue strong rules, and then we will gladly drop this lawsuit.”
Right now international oil companies are paying billions to governments, and no one can say where the money goes. When Congress enacted Section 1504 on July 21, 2010 to shine a light on the payments, it gave the SEC a 270-day deadline to promulgate rules. After Oxfam America sued for undue delay, the Commission issued a rule in August 2012, which was challenged in court by the American Petroleum Institute (API) – backed by companies such as Chevron, Exxon and Shell – and vacated on procedural grounds by the U.S. District Court on July 2, 2013. The SEC has yet to reissue a rule that complies with the law and the District Court’s ruling. More than 1,500 days have passed since July 21, 2010, and more than a year since the Court’s ruling – putting the SEC in violation of its Congressional deadline. Yet the Commission has determined that it may not get started on the rulemaking until October 2015 and has indicated that it plans to take action on numerous other rulemakings that do not have a Congressional deadline before it turns to Section 1504.
Oxfam America is joined by Senators, Members of Congress, investors with more than $5.6 trillion in assets under management, and civil society groups asking the SEC to promptly issue a new rule. All of these groups have supported public, company-by-company, project-level disclosure without exemptions, reflecting the compelling interest citizens and investors have for this information. Citizens of the most impoverished, yet resource-rich countries have a right to know where their national wealth is going, and public information about payments from companies will help them track this money.
Help defend a new global standard
There are now more than 1.5 billion people living on less than $2 a day in poor countries that are nevertheless rich in natural resources, and they want to know: Where does the money go? To help answer this question, the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (passed with help from Oxfam supporters) included a groundbreaking provision which requires that all oil, gas, and mining companies registered under the Securities and Exchange Commission (SEC) be transparent about payments made to governments around the world. Oil and gas companies have been fighting implementation of the law and have filed a lawsuit to block the SEC’s new rules implementing Dodd-Frank so they can keep their payment information secret.
The transparency requirements in Dodd-Frank have been followed by similar laws in the EU, Norway, Canada and the United Kingdom that represent a new global standard that will help give citizens in countries producing oil, gas, and minerals information they can use to demand accountability from their own governments. This emerging global standard for payment transparency makes the SEC’s job easier and validated its judgment as to the potential costs and benefits of public, company and project-level disclosures with no exemptions. The US law will shine a light on billions in payments made by more than 1,000 companies, including by many of the world’s largest oil and gas companies, and 8 of the 10 ten largest mining companies in the world.
Right the wrong
We need your help: Join us in calling on the SEC to respect the will of Congress and the American people: Finish the job and issue strong rules that will promote transparency and democracy over secrecy and corruption.