Washington, DC –As we mark the two year anniversary of Congress passing a landmark law that will help stem financial secrecy in the oil, gas and mining industry, international aid and relief organization Oxfam America joins other transparency advocates to urge the Securities and Exchange Commission (SEC) to vote for strong final rules on August 22.
The landmark law, known as Section 1504 or the Cardin-Lugar provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act, requires companies filing reports with the SEC to disclose taxes, royalties and other payments related to the exploration and extraction of oil, gas and minerals in every country of operation. The required information, which includes project-level payment information, will arm watchdog groups, citizens and journalists in resource-rich countries with crucial information they can use to help hold governments accountable. The reports will also help investors assess the risks companies face.
“In too many countries around the world, oil and mineral wealth is squandered through government mismanagement and corruption instead of being invested in health, education and agriculture,” said Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining program. “There’s no time left to waste. The SEC should not give in to industry pressure to water down the rules.”
Transparency advocates won the battle two years ago to get the law on the books, but the fight continues with the SEC, which has missed the statutory deadline to issue final rules needed to bring Section 1504 into effect by more than a year. To compel the agency to follow the law, Oxfam America filed a lawsuit against the SEC in May. The SEC responded to the lawsuit in a court filing on July 26.
“The SEC has told the public the meeting for the vote is scheduled for August 22 and is now using this scheduled vote as its principal excuse to the court. The August 22 date must not slip,” said Gary. “It’s time for the SEC to bring this fight to an end and follow the letter of the law.”
Yesterday, Senator Benjamin Cardin (D-MD) joined Arlene McCarthy, a leading Member of the European Parliament, on Capitol Hill to call for strong and swift action by the SEC. The European Parliament is working with the European Commission and European Council to complete a similar mandatory requirement for listed and large privately-held extractive companies in Europe.
“We’ve acted and the SEC is our implementing arm and they are required to follow the law passed by Congress,” Senator Cardin said. “Read the law. It’s simple. There is no ambiguity and I don’t think the SEC has a lot of discretion.”
Many Members of Congress, Oxfam and campaigners with Publish What You Pay USA have urged that the final rule should allow no exemptions and should define the project-level reporting requirement included in the law as payments made at the lease, license or contract level in host countries. MEP McCarthy emphasized in meetings with SEC Commissioners Walter and Aguilar that a majority in the relevant committee supports project level reporting and that they will not accept proposals from industry to create exemptions for alleged laws in host countries prohibiting disclosures.
“We are not prepared to create exemptions when we have no evidence that the problem exists… I told the SEC that we want a strong rule from the SEC and that this will help us in Europe. We won’t accept industry to play off two jurisdictions to weaken rules,” McCarthy said.
“Transparency is essential to good governance wherever you live on the globe. The US shares a commitment with our EU partners to support local citizens and level the playing field for all companies by harmonizing requirements to decrease corruption through greater transparency in resource-rich countries,” said Senator Cardin “Two years after passage of the US law that includes project-by-project reporting, with no exemptions, we look forward to completion of the SEC rule on August 22. This final information will be critical to ensuring that the EU has the information it needs to write its own rules.”