Publish What You Pay disagrees with US Court on oil and mining transparency rule

Source: PWYP International
Date: 8 Jul 2022

Publish What You Pay, the global network campaigning for greater openness in the extractive sector, expressed both disappointment and disagreement with a US District Court ruling last week which orders the US Securities and Exchange Commission (SEC) to look again at its final rule implementing section 1504 of the US Dodd Frank Act.

Dodd Frank 1504 requires oil, gas and mining companies listed on US stock exchanges to disclose the payments they make to governments around the world, by country and by project. Disclosure of this payment information is aimed at ensuring that natural resource wealth is managed well, rather than squandered.

The American Petroleum Institute (API), which represents the interests of oil giants including BP, Chevron, Exxon and Shell, launched its legal challenge to Dodd Frank 1504 in October 2012 together with the US Chamber of Commerce and two other industry groups.

“We disagree with the court’s ruling” said Marinke van Riet, International Director of Publish What You Pay. “In enacting its law, which remains in place, Congress clearly intended to further international transparency efforts by making the payment information which companies submit to the SEC publicly available. The idea that a rule which mandates disclosure is actually intended to keep key information hidden from the public is absurd.”

Publish What You Pay also strongly disagrees with the court’s conclusion that the SEC did not do enough to explain why it rejected the oil industry’s request for exemptions in countries which allegedly prohibit disclosure. The oil industry has never been able cite a single piece of credible evidence suggesting that host country prohibitions on payment disclosure exist anywhere in the world. Had the SEC granted exemptions, this would only have served to incentivize unscrupulous regimes into passing secrecy laws.

“This ruling could potentially delay the provision of crucial information to citizens and investors around the world” said Van Riet. “New discoveries are being made every day and natural resources continue to be rapidly exploited around the world. Every mismanaged dollar is a lost opportunity for citizens in resource rich countries. The time for transparency is now – a sentiment reflected by the G8 states, which put transparency at the heart of their summit in June.”

The court ruling comes just days after the EU signed into law similar requirements under the European Accounting Directive which requires oil, gas, mining and logging companies to annually disclose the payments they make to governments on a country-by-country and project-by-project basis. Shell and BP, members of API which supported the US lawsuit, will be subject to these European disclosure rules when they come into effect. Other countries including Canada and Norway have committed to put in place similar laws, with Switzerland recently confirming that it would also consider a draft law on extractives transparency.

“The decision of the court will do little to halt the move towards a global standard of transparency in the oil, gas and mining industries” said Van Riet. “The SEC conducted a lengthy public consultation on the rules and nothing in the court’s judgement prevents the SEC from issuing identical rules with a modified justification.”

Media enquiries:

Joseph Williams, Senior Advocacy & Communications Officer, Publish What You Pay, [email protected], +44 (0)7775 751170