Washington, DC –International relief and development organization Oxfam America applauded the US Securities and Exchange Commission (SEC) for refusing to delay the implementation of a sunshine law that requires oil, gas and mining companies to disclose payments they make to US and foreign governments for oil and mineral extraction.
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."