Oxfam criticized the adoption by the Securities and Exchange Commission (SEC) of a new rule which effectively guts an oil and mining anticorruption provision in a midnight rulemaking process and called on the new leadership of the SEC next year to take action to address the most problematic parts of the rule.
In the face of a public record overwhelmingly in favor of a strong rule implementing Section 1504, an oil and mining anticorruption provision in the 2010 Dodd-Frank Act, the SEC today voted to gut the provision in a midnight rulemaking process. Oxfam has championed the implementation of Section 1504, but stated that a rushed final vote was deeply problematic and that the now-adopted rule is weak and out of line with the global standard. The SEC is currently lead by Chair Jay Clayton, a Trump appointee who will resign next week. Two commissioners, Allison Herren Lee and Caroline Crenshaw, shared strong dissenting opinions on the 3-2 vote.
In reaction to today’s vote, Daniel Mulé, senior policy advisor for tax and extractive industries at Oxfam said:
“Today’s rule falls short of the international standard on global transparency, misses congressional intent, and does little to prevent corruption in the oil and mining sector,” said. “This last-minute rulemaking must be reviewed under new leadership committed to reestablishing America’s role in the global fight against corruption. As it stands the rule serves the interests of kleptocrats and industry insiders who want to operate in the dark.
“In adopting this rule, the SEC seems to have prioritized the interests of a small handful of US oil industry voices who dominate the American Petroleum Institute and have exerted excessive influence on US policymaking under the Trump administration, whether on transparency, bailouts, or climate. Instead of operating as an independent commission focused on safeguarding markets and protecting investors, the SEC appears to have fallen victim to partisan politics and industry lobbying.
“With Chair Clayton leaving next week, new leadership at the SEC will have to consider how to clean up the mess left behind, weighing whether rogue and rushed rulemaking – that ignores both the underlying law and the overwhelming record in favor of greater transparency – exposes this rule to further litigation risk yet again. Fortunately, new leadership can still work to fix the rule’s most problematic features through administrative action. They should do so quickly if this incoming Biden administration wants to reestablish the United States as a global leader in the fight against corruption.”
Note to editors:
Oxfam’s statements on the current draft and final rule implementing Section 1504:
- Midnight rulemaking at the SEC risks keeping corruption in the dark – December 15, 2020
- Draft SEC oil and mining rule would facilitate corruption – December 18, 2019