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Washington, DC –International relief and development organization Oxfam America applauded the European Union for reaching agreement today to put in place a mandatory payment disclosure requirement for the oil, gas and mining industries that will complement a US law passed in 2010.
Similar to the recently passed US “Cardin-Lugar” provision or Section 1504 of the Dodd-Frank Act, the European directive goes further by requiring both public and privately-held companies to disclose their payments. Like the US law, companies will be required to disclose payments, such as taxes and royalties, above 100,000 Euros for individual projects in every country of operation.
“With the US law covering the vast majority of internationally operating oil companies and world’s largest mining companies along with the European rules covering even more companies, the transparency net will be cast far and wide,” said Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining program. “This is a huge victory for citizens living in resource rich countries. We applaud Europe’s leaders and Members of the European Parliament for not caving under oil industry lobbying efforts to water down the rules.”
In the US, an oil industry lawsuit was filed against the Securities and Exchange Commission (SEC) to overturn the rules promulgated by the regulatory agency last August. Oxfam has intervened in the lawsuit on the side of the SEC and the US Court of Appeals heard oral arguments in the case on March 22.
As in the US, EU regulators and political leaders were not convinced of any host country prohibitions against disclosing this payment information. Like the SEC rule, the EU agreed directive does not allow for any company exemptions to the payment disclosure requirement.
"The strong law in the US and the EU requirements agreed today show that payment transparency has already become a global norm,” said Gary. “Oil companies should join citizens in resource-rich countries, investors, and energy consumers in embracing transparency, rather than seeking to turn back the tide through litigation."
The EU directive and the US law will complement the Extractive Industries Transparency Initiative, a set of principles adopted by some countries under which governments publicly disclose their revenues from oil, gas and mining projects, and companies make parallel disclosures regarding payments they make to host government for accessing publicly owned resources.