International relief and development organization Oxfam America noted today the importance of Norwegian global oil company Statoil’s rejection of an American Petroleum Institute (API) lawsuit seeking to overturn a landmark oil, gas and mining payment disclosure provision of the Dodd-Frank Act.
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.”