Court order will force agency to expedite process in victory for transparency advocates.
Federal Judge Denise Casper has ordered the US Securities and Exchange Commission (SEC) to submit to the court an “expedited” schedule for producing final rules that will require oil, gas, and mining companies to disclose payments to governments.
The decision upholds Oxfam’s contention that the SEC has “unlawfully withheld” its final rules for Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed with bipartisan support by Congress and signed by President Obama in 2010. The law required the agency to issue its rules years ago, but slow compliance at the SEC and legal action by oil companies has delayed the rule.
“Citizens in countries all over the world that are producing trillions of dollars in oil, gas, and minerals are waiting for the US to put this law into force,” says Ian Gary, senior policy manager for Oxfam’s extractive industries program. “Armed with information about what companies are paying their governments, citizens can follow the money and push for these funds to be used to build schools, hospitals, roads, and invested in other ways to fight poverty.”
Final rules for this essential section of the Dodd-Frank law will help the US to catch up with Canada, Norway, and the 28 members of the European Union, which followed the US model, and now require the same type of disclosure. More than 1,100 companies listed on the US stock exchanges, including the world’s largest internationally operating oil and mining companies in the world, are covered by the law.
People in countries whose economies rely heavily on commodities like oil are particularly interested in when the US will finally implement rules for Section 1504. “It will be really important to have this law in the US…it means more for Nigerians than laws in other countries,” says Emeka Onanamudu, who works for the Citizen’s Centre for Integrated Development and Social Rights in Nigeria. Given the number of oil companies covered by Section 1504 that operate in Nigeria, he says the US SEC should prioritize its rule making process. “If they are serious about improving accountability and reducing corruption in the oil industry supply chain, then they need to make a serious commitment to delivering these rules.”
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