News: About time! SEC to speed up draft rule for Dodd-Frank 1504
September 7, 2015. Source: Oxfam US, PWYP
The Securities and Exchange Commission (SEC) told to speed up draft rule for landmark 2010 US transparency law for oil, gas and minerals
In June 2010, President Obama signed into law Dodd-Frank 1504, which obliges all US-listed extractive companies to publish their payments to the governments where they operate. Section 1504, if properly implemented, will enable citizens to monitor the revenue their governments receive from extractive companies, and help citizens ensure that revenue generated from their countries’ natural resource is put to good use in their own countries. This move placed the US as a frontrunner of global extractives transparency and set the stage for other countries to follow its lead by drafting and implementing similar transparency laws.
The SEC was tasked with drawing up the rules for section 1504 and in 2012 issued a strong rule, over which the American Petroleum Institute initiated legal proceedings against the SEC. To the great disappointment of the PWYP coalition, the rules were vacated by the US District Court. As a result, the SEC was required to submit a new version of the rule, but no such draft has been put forward yet and the SEC has repeatedly delayed the rulemaking process.
Project-level reporting will bring great benefits to citizens’ groups in resource-dependent countries. In April 2014, frustrated with the lack of progress, 544 PWYP members from around the world wrote a letter to the SEC Chair, Mary Jo White, strongly asking the SEC to reissue a robust implementing rule for Dodd-Frank Section 1504. The letter included signatures from PWYP members working in countries where numerous extractive companies are active, including US companies. Project-level reporting would allow these members to hold both governments and companies to account for payments at local level, especially when there are revenue sharing policies and practices in place.
In August 2014, during the US-Africa Leaders summit held in Washington DC, a number of high-profile African members of PWYP wrote an open letter to President Barack Obama, asking for the US to create a level-playing field by issuing a final rule so that Africa can finally benefit from the revenues it is generating from natural resources. This was strengthened through various submissions of transparency advocates around the world to the SEC explaining why Dodd-Frank section 1504 is so critical and why Big Oil’s influence needs to be stopped.
Yesterday, following a lawsuit led by Oxfam America, a US Federal District Court gave the SEC 30 days to submit a firm work plan to issue the final rules for Section 1504 of the Dodd-Frank Act. The SEC has no choice but to comply with the 30 day deadline. We, as PWYP, will continue to keep the PWYP eye open…