Securities and Exchange Commission requires disclosure of payments to governments
Oxfam America welcomes the release of a final oil and mining sunshine rule by the US Securities and Exchange Commission (SEC) today. The rule require oil, gas and mining companies listed on US stock exchanges to publicly disclose tax and other payments they make to the US government and governments around the world. Investors and citizens have long demanded such transparency to better manage investments and increase accountability for the billions of dollars generated by these industries for governments every year.
The rules implement Section 1504 (also known as the “Cardin-Lugar” provision) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The SEC issued the final rules today in response to a federal court decision in a lawsuit filed by Oxfam over the agency’s long delay. The law covers many international oil, gas and mining companies, such as Exxon, Chevron and Shell, as well as some state-owned companies from places such as China and Brazil.
The final rule contains strong provisions that support and further the new global transparency standard that Section 1504 helped catalyze almost six years ago. Since the passage of the Dodd-Frank Act in 2010, the UK, European Union, Canada, and Norway have adopted similar mandatory disclosure laws and companies such as Shell have already started reporting on their payments to governments under the implementing regulations. By adopting a strong final rule today, the US has reasserted itself as a global leader on extractive industries transparency.
“After six years, we are very pleased to see the SEC release final rules that align with those in other markets by requiring fully public, company-by-company, project-level reporting,” said Ian Gary, Associate Policy Director at Oxfam America. “This is a huge victory for investors and for citizens in resource rich countries around the world who wish to follow the money their governments receive from oil and mining companies.”
Senators, Members of Congress, investors with close to $10 trillion in assets under management, and citizens from all over the world wrote to the SEC during the rulemaking process, calling on the agency to issue robust final rules that align with those in other markets. The US Department of State and the US Department of Interior also voiced support for a strong rule during the rulemaking process, highlighting the benefits to US foreign and domestic policy interests.
“Public transparency of the payments by oil, gas and mining companies to our government for each project is absolutely critical. It’s needed to deter corruption and allow public oversight of contract implementation, government budgeting and revenue management,” said Mohammed Amin Adam, executive director of the African Center for Energy Policy, an Oxfam partner based in Ghana.
“The final rules will advance US transparency goals and provide activists around the world the information they have long sought in order to hold their governments to account,” continued Gary.
By aligning the rule with the transparency rules in other countries, the SEC will help cross-listed companies streamline their compliance obligations and avoid inconsistent reporting requirements. With the certainty of the final rule, companies can now focus their efforts on compliance.
“Oxfam has been campaigning for this law and its implementation for almost a decade, and today, we are celebrating that the SEC has finally put in force Congress’s mandate,” said Gary. “While we’re still reviewing the details, we look forward to working with our partners to put the information generated by this crucial rule to work all over the world.”
Notes to editors:
- The final rules come as a response to court ruling in the case Oxfam America, Inc. v. US Securities and Exchange Commission, in federal district court in Massachusetts, No. 14-13648-DJC. Oxfam had sued the SEC for delaying finalization of rules for Section 1504. In 2015, the court held that the SEC had “unlawfully withheld” the final rule and ordered the SEC to expedite rulemaking. Oxfam America is represented by EarthRights International, Goulston & Storrs and Meyer Glitzenstein & Eubanks.The SEC originally produced an implementing rule for Section 1504 in August 2012. However, that rule was vacated by the DC District Court following a lawsuit led by the American Petroleum Institute and the U.S. Chamber of Commerce. Read more about the court decision here: http://www.publishwhatyoupay.org/wp-content/uploads/2015/12/PWYP-Fact-Sheet_District-Court-Decision-Sept-2013.pdf
- More information about Oxfam America’s campaign to urge the SEC to act, including information on the lawsuit is available here:
- The Department of Interior also wrote to the SEC supporting definitional consistency with the rules in EU, stating that this was “feasible when applied in the context of natural resource development on federal lands in the United States.”