Is the United States getting a good deal on its natural resources? A taxing question

This case study began with a not-so-simple question: Is the United States getting a good deal for the depletion of its natural resources?

Publish What You Pay – United States (PWYP-US) has worked for 13 years to open the books of oil, gas and mining companies to create a more open and accountable extractives sector. More than a decade into this effort, many of the world’s largest oil, gas and mining companies now disclose their project-level payments to governments, either voluntarily or in compliance with legal requirements. Yet, a few major US oil companies
– namely ExxonMobil, Chevron and ConocoPhillips – remain strongly opposed to these simple financial disclosures.

Like the citizens in resource-rich countries around the world, citizens of the United States also need to know if they are getting a good deal on their natural resources. Thoroughly answering this question, however, is incredibly complex and involves the careful analysis of contracts, as well as relevant tax and royalty regimes governing the extractives sector. As a starting point, this case study focuses on how much some of the largest extractives companies paid in taxes to the US federal government in 2015.

This case study is part of Publish What You Pay’s Data Extractors programme, a global initiative which trains PWYP members and activists from across our network to use extractives data.

This case study was written by Jana Morgan Director of PWYP USA as part of her Data Extractor’s project

US Congress votes down anti-corruption rule

This week, United States legislators chose to relinquish their country’s leadership role in the global oil, gas and mining transparency movement by undoing a landmark anti-corruption rule. Both the House of Representatives and the Senate passed a motion to roll back the bi-partisan Cardin-Lugar provision, also known as Section 1504 of the Dodd-Frank Act Section 1504, in the same week that Rex Tillerson, former head of US oil giant ExxonMobil, was confirmed as Secretary of State.

Elisa Peter, Executive Director of Publish What You Pay (PWYP), a global civil society coalition working to promote transparency in the extractive sector, said: “This rule, which the US Congress has just repealed, played an instrumental role in the global movement towards transparency. By requiring all US-listed oil, gas and mining companies to publicly disclose the payments they make to governments around the world, the United States had demonstrated world leadership in the fight against corruption. This time is over”

Jana Morgan, Director of Publish What You Pay-US, said: “Instead of taking on corruption as they had promised, Congress and the new administration have gutted an important anti-graft measure that helps keep Americans safer and more informed. The Cardin-Lugar rule is critical for ensuring that authoritarian regimes around the world cannot treat oil and mining revenues like state secrets, breeding corruption, distrust, and conflict that harms U.S. security and energy interests.”

The US mandatory disclosures rule, detailed by the US Securities and Exchange Commission (SEC) after much consultation, required all oil, gas and mineral companies listed on US stock exchanges to report the royalties, bonuses, fees, taxes and other payments they make to governments, country by country and project by project.

Ali Neema, National Coordinator of PWYP Iraq, commented: “Transparency rules such as Dodd-Frank Section 1504 are crucial tools to redress extreme corruption problems linked to our country’s oil sector. Undoing this rule undermines efforts worldwide to make natural resource extraction honest and fair. More worryingly, it risks fueling new terrorist threats and leaves transparency about Iraq’s oil to the whim of government ministers and officials.”

Civil society organisations and PWYP members all over the world had called on US legislators to preserve the Dodd-Frank transparency rule. The outcome of 15 years of civil society campaigning and several years of careful deliberation by US lawmakers and officials, Cardin-Lugar has had far-reaching consequences for citizens all over the world by inspiring similar legislation now being implemented in the European Union, Canada and Norway. Companies including Shell, BP, Total and Rio Tinto are already reporting. Many of the largest oil, gas and mining companies support country- and project-level reporting, and several have indicated that they do not find the reporting requirement burdensome.

Miles Litvinoff, National Coordinator of PWYP UK, said: “Undoing this rule may push the US back as a global champion of transparency. But other jurisdictions are proving that they take anti-corruption measures in the extractive sector seriously. The UK is now in its second year of implementing its reports-on-payments-to-governments regulations, and most in-scope companies, including foreign UK-listed companies, are complying fully with their disclosure obligations without a problem.”

Dodd-Frank 1504 is one of the first rules attacked by US Republicans allied with the new Trump administration using the little known Congressional Review Act. ExxonMobil and Rex Tillerson are widely known to have lobbied hard against this rule. Rather than “transferring power back to the people”, as President Trump has stated he wishes to do, this move means that when it comes to US oil, gas and mining companies, citizens will be kept in the dark.

Elisa Peter concluded: “Notwithstanding this step back, PWYP will continue to empower citizens around the world to shine the light of transparency on the oil, gas and mining sectors.”

Open Message from PWYP Global Coalition to US-listed EITI Companies

Download the full statement here.

Open message from Publish What You global coalition

To US-listed EITI-supporting companies:

Anglo American, AngloGold Ashanti, ArcelorMittal, Barrick Gold, BHP Billiton, BP, Chevron, Conoco Philips, Eni, Exxon Mobil, Freeport-McMoran, Glencore, Goldcorp, Gold Fields, Hess Corporation, Hudbay, Iamgold, Kinross, Kosmos Energy, Marathon Oil, Newmont Mining, Noble Energy, PEMEX, Petrobras, Rio Tinto, Royal Dutch Shell, Statoil, Teck Resources, Total, and Vale SA

Help defend the Cardin-Lugar anti-corruption rule and the global extractive industry transparency standard

Certain US legislators are seeking to use the Congressional Review Act to void the Cardin-Lugar anti-corruption rule (Dodd-Frank Act 2010, Section 1504). To roll back this rule would be a retrogressive step for oil, gas and mining industry transparency and for the global battle against corruption.

Country- and project-level reporting of extractive industry payments is essential for citizens in resource-rich countries to hold their governments accountable for how they use the massive revenues they receive for their finite natural resources from companies. Oil, gas and mining companies need payment disclosure to maintain their social license to operate.

Without payment transparency, citizens cannot know how much money extractive companies pay to dictatorial and non-transparent governments such as in Angola, Equatorial Guinea, and Kazakhstan.

Fredrik Reinfeldt, Chair of the global Extractive Industries Transparency Initiative (EITI), stated this week:

“The [US Securities and Exchange Commission] took great care in drafting these rules in consultation with industry to ensure that they complement the EITI’s efforts and avoid unnecessary duplication.

I would urge Congress to consider this matter thoroughly and to ensure that any action does not undermine the hard-won gains in this arena.” (http://bit.ly/2kn50RL)

The US Government has recognized that anti-corruption measures such as Dodd-Frank 1504 are es sential to fighting terrorism.

As a responsible US-listed and EITI–supporting extractive company, please help defend the Cardin-Lugar rule by speaking out publicly in its favor and urging the US Congress and Senate to maintain the rule intact.

We look forward to seeing your company statement. Please send statements to wmardini@pwypusa.org and cc to Business & Human Rights Resource Centre, which is tracking US-listed EITI-supporting companies that do and do not make statements, at regaignon@business-humanrights.org

Faithfully yours

Publish What You Pay International Secretariat

Publish What You Pay United States

NGO Coalition on EITI Azerbaijan (Publish What You Pay-affiliated)

Publish What You Pay Cameroon

Publish What You Pay Canada

Publiez Ce Que Vous Payez Guinée

Publiez Ce Que Vous Payez Payez Senegal

Publish What You Pay (NGO Consortium on EITI Promotion) Kyrgyzstan

Publish What You Pay Malawi

Publish What You Pay Mozambique

Publish What You Pay Netherlands

Publish What You Pay Norway

Publish What You Pay South Africa Coalition

Publish What You Pay Uganda

Publish What You Pay United Kingdom

Publish What You Pay Zambia

Publish What You Pay member organisations:

Africa Network for Environment and Economic Justice (ANEEJ), Nigeria

HDC “Tree of Life”, Kyrgyz Republic

Luta Hamutuk Institute, Timor Leste

Lumiere Synergie pour le Developpement, Senegal

Mineral Policy Institute, Australia

Partnership Africa Canada

Public Association for Assistance to Free Economy, Azerbaijan

Public Eye (formerly Berne Declaration), Switzerland

SWISSAID, Switzerland

This move by the US Congress is good for Exxon, bad for everyone

One of President Trump’s best tools to “drain the swamp” is under threat from his own side. A mere four days after he took office, Republican Congress members began attacking a key piece of anti-corruption legislation.

This rule, the Cardin-Lugar provision (also known as Section 1504 of the Dodd-Frank Act), was a bipartisan effort to shield US citizens and shareholders from millions of their dollars vanishing to foreign oligarchs in the oil, gas and mining sector, which is particularly vulnerable to corruption. The “swamp” — a handful of lobbyists, executives and contractors who feed off such business ties — has attacked it for years.

When the provision was born in 2010 it set an international movement in motion. United States leadership inspired similar legislation in the EU, oil-rich Norway, Canada and beyond. In total, governments enacted similar provisions in over 30 countries.

Today these measures apply to 80 percent of the world’s largest publicly listed oil, gas and mining companies, including state-owned companies from Russia, China and Brazil. This is a win-win for resource-rich countries too: citizens from Indonesia to Zimbabwe are using these transparency laws to keep track of the funds their governments receive and ensure that oil, gas and mining revenues don’t simply vanish into private accounts held offshore, but rather contribute to shared economic growth.

But to those in Washington D.C. the most spectacular part of the provision was its bipartisanship, at a time when such feats seemed almost impossible. Later, laws in Canada drew the full support of the mining sector. Yet a handful of oil companies seeking to keep their business dealings secret continued to oppose the law. Leading this opposition was one company, Exxon Mobil, hiding behind an oil lobbying group called the American Petroleum Institute (API).

First API opposed the law in Congress. When that failed, they tried to water down the regulations. After that, they sued the Securities and Exchange Commission, an agency of the US Federal government, resulting in the regulation being sent back for revision, on technicalities.This delayed implementation by years — until a new rule was released in June 2016.

Next week, Republicans in Congress plan to use an obscure law called the Congressional Review Act (CRA), in an attempt to void the implementing rule for the Cardin-Lugar provision. Despite the Cardin-Lugar provision’s long legislative history, and two robust rulemakings, the delays caused by API’s litigation makes it vulnerable to the CRA.

In the early rush of a new administration, members of Congress are moving as quickly as they can to damage anti-corruption standards, a move which only benefit lobbyists and corporate bottom lines. The greatest damage, however, will be to the communities around the world who currently fail to benefit from their natural resources because of the conduct of the likes of ExxonMobil.

To US citizens and the rest of the world, this offensive threatens a return to the dark days of unhinged economic and environmental crime. It means vanished millions of dollars that shareholders,

Who Owns Oil Rights in the Gulf of Mexico? Use this tool to find out!

This post is sourced from Extract-A-Fact

Always on the lookout for interesting data, I was excited when I recently came across a comprehensive trove of data on offshore production in the Gulf of
Mexico from the Bureau of Ocean Energy Management (BOEM).The datasets at data.boem.gov
include:

However, because the data is interspersed between four datasets, it is downright complicated to find out which leases a company owns, what the lease
attributes are, and how much oil and gas has been produced from the lease. With that in mind, I have created an interactive map application that combines
the geographic data, the ownership data, and the production data into one easy-to-use tool.

See the full-sized map here

This map allows the user to view:

  • the leases owned by some of the biggest leaseholders in the Gulf of Mexico
  • which leases produced oil and/or gas in 2014, 2015, and 2016, and how much
  • all the owners of a lease by percentage
  • the royalty rate on the lease

I created the map using
Carto, an online platform for mapping and analysis, and used their Javascript library, Carto.js, to add custom features. I cleaned and merged the BOEM data using R into a usable format for the application. The data is hosted on the Carto website at pwypusa.carto.com ; it can be viewed and downloaded there.

Take a look at the map, hosted on our Github page at the following link: https://pwypusa.github.io/pages/gulf_explorer.html

Fact Sheet – SEC Final Rule for Section 1504

On June 27, 2016, the US Securities and Exchange Commission (SEC) voted to approve regulations to implement Section 1504, or the Cardin-Lugar Amendment, of the 2010 Dodd-Frank Financial Reform and Consumer Protection Act. Section 1504 requires any oil, gas or mining company filing an annual report with the SEC to disclose their country and project-level payments to host governments each year.

● The full text of the June 2016 final rule can be read here: https://www.sec.gov/rules/final/2016/34-78167.pdf

This fact sheet was originally posted on PWYP US and can be viewed here


When will the information be disclosed?


● The SEC is adopting a 2-year phase-in period. Companies will be required to comply with the new rule for their fiscal year ending on or after September 30, 2018.

● Companies will report no later than 150 days after the end of their fiscal year.

● Since most major extractive companies’ fiscal years end on December 31, first reports are expected by May 2019.


Who must disclose?


● Companies that file an annual report with the SEC. These include companies that are listed on US stock exchanges. They are called “resource extraction issuers” in the rule. This includes approximately 755 oil, gas and mining companies, according to the SEC.

● Companies that “engage in the commercial development of oil, natural gas, or minerals.”

● These include:

o US domestic companies – Those that file Form 10-K.

o Foreign companies – Those that file Forms 20-F or 40-F (Canadian companies).

● These also include subsidiaries and “entities under the control” of the issuer, as defined by accounting principles.

o An issuer has “control” over another entity when “the issuer consolidates the entity or proportionately consolidates an interest in an entity or operation under the accounting principles applicable to [its] financial statements.” To determine if an issuer has control, it is required to follow the consolidation requirements under the US Generally Accepted Accounting Principles (US GAAP) or the International Financial Reporting Standard (IFRS). “…an issuer must disclose the payments made by entities that are consolidated, or its proportionate amount of the payments made by entities or operations that are proportionately consolidated, in its consolidated financial statements…”1

● Issuers must disclose the proportionate amount of the eligible payments made by a resource extraction issuer’s proportionately consolidated entities or operations.

● Foreign private issuers not subject to Exchange Act reporting (not listed, no registered offering) are not required to report.2


Does the rule provide any exemptions from compliance?


● The SEC will consider applications for exemptive relief on a case-by-case basis, using its existing authority under the Exchange Act. Companies seeking relief must follow the application process set forth in Exchange Act Rule 0-12.

o Under Rule 0-12 the SEC may provide notice and an opportunity for public comment on applications for exemptions.

● If a company files for an exemption because of a purported “host-country prohibition” to disclosure, the SEC will consider the specific facts and circumstances in determining whether, and to what extent, to provide exemptive relief and may request supporting documentation, for example:

o An opinion of counsel supporting a company’s claim of a foreign law prohibition;

o Representations as to the public availability of the information in question;

o A description of steps taken by the issuer to obtain permission to disclose;

o Text of applicable foreign laws (translated as necessary);

o Whether similar information has been disclosed by other companies in similar circumstances. The final rule includes two targeted exemptions related to certain newly acquired companies and new exploratory activity:

1) If an issuer acquires a company not previously subject to the rule (or the requirements of another
substantially similar jurisdiction), the issuer will not be required to start reporting on payments for the
acquired entity until the next fiscal year following the acquisition.

2) Companies may delay reporting on payments related to certain new exploratory activities for one year. However, this is limited to activities conducted prior to the development or extraction of resources and cannot be applied to payments made for exploratory activities adjacent to, or on the same property as, a current project.3


What is being disclosed?


On an annual basis, the following will be disclosed in the specified report:

1. Type and total amount of payments made for each project.

2. Type and total amount of payments made to each government.

3. Total amount of the payments, by category.

4. The government that received the payments, and the country in which the government is located.

5. The project to which the payments relate.

6. Currency used to make the payments.

7. Financial period in which the payments were made.

8. Business segment of the resource extraction issuer that made the payments.

9. The natural resource that is the subject of commercial development.

10. The subnational geographic location of the project (Issuers will report an additional tag for subnational geographic location that uses ISO codes to indicate project location).


Which categories of payments will be disclosed?


● Taxes

o Specifically included – taxes levied on corporate profits, corporate income, and production.

o Specifically excluded – taxes levied on consumption (e.g. VAT, personal income taxes, sales taxes).

o For payment obligations levied at the entity level, such as corporate taxes, issuers may disclose at the entity level.

● Royalties

o Including unit-based, value-based, and profit-based.

● Fees (including license fees)

o Includes rental fees, entry fees, and concession fees.

● Bonuses

o Including signature, discovery and production bonuses.

o Fees and bonuses identified are not an exclusive list, and there may be other fees and bonuses a resource extraction issuer would be required to disclose.

● Production Entitlements

o Oil production shared between a company and government once investment and operating costs are recovered through cost oil (the physical oil or revenue used to cover
the operator’s costs).

● In-kind

o Must disclose payment types above that are made in-kind and tag them as “in-kind” in the currency tag.

o Companies must provide a description as to how the monetary value of in-kind payments was calculated.

o Companies are required to report “at cost, and are only permitted to report using fair market value if historical costs are not reasonably available or determinable.”4 Additional payment types included in the final rule for consistency with EITI (not expressly listed in the statute):

● Dividends

o Includes those paid in lieu of production entitlements or royalties.

o Does not include dividends when the government is an ordinary shareholder in the covered company or a company under its control, and receives dividends on the same basis as other shareholders in the company.5

● Infrastructure Improvements (“such as building a road or railway”)

o Included if these are incurred, whether by contract or otherwise, to further the commercial development of oil, natural gas or minerals.

● Social and Community Payments

o If required by law or contract.


For which activities must payments be disclosed?


● Disclosure is required for payments related to the commercial development of oil, natural gas or minerals.

● This includes:

o Exploration

o Extraction – Includes the “production of oil and natural gas as well as the extraction of minerals.”

o Processing

● Includes “‘but is not limited to, midstream activities such as the processing of gas to remove liquid hydrocarbons, the removal of impurities from natural gas prior to its transport through a pipeline, and the upgrading of bitumen and heavy oil, through the earlier of the point at which oil, gas, or gas liquids (natural or synthetic) are either sold to an unrelated third party or delivered to a main pipeline, a common carrier, or a marine terminal. It would also include the crushing and processing of raw ore prior to the smelting phase.”6

● Does not include smelting or refining.

o Export – “the transportation of a resource from its country of origin to another country by an issuer with an ownership interest in the resource…”7

● Does not cover activities with “little relationship to upstream or midstream activities,” such as commodity trading-related activities.

● Does not cover movement of resource across an international border by a company that is not engaged in exploration, extraction or processing, and acquired its ownership interest in the resource directly or indirectly from a foreign government or the Federal Government.

● Does not “capture payments related to transportation on a fee-for-service basis across an international border by a service provider with no ownership interest in the resource.”8

o The acquisition of a license for any such activity

● When a service provider makes a payment to a government on behalf of an issuer.

● The rule does not require disclosure of:

o Payments for transportation except for payments made in relation to the export of oil, gas, or minerals.

o Payments related to activities that are ancillary or preparatory to commercial development, such as manufacturing drill bits. However, where a service provider makes a payment on behalf of an issuer that meets the definition of “payment,” the issuer would be required to disclose the payment.9

o Payments related to marketing activities.10


Payments to which government entities?


1. Foreign governments, defined as:

o foreign government

o a department

o agency

o instrumentality

o a company owned by a foreign government – This includes companies that are “at least majority-owned by a foreign government.” 11

2. Foreign subnational governments, including:

o states

o provinces

o counties

o districts

o municipalities

o territories

3. US Federal Government – Specifically excludes US state governments.


How is a project defined?


● A project is contract-based.

● The rule adopts a definition of “project” similar to the definition in the EU Directives and Canada’s Extractive Sector Transparency Measures Act (ESTMA):

o “the operational activities that are governed by a single contract, license, lease, concession or similar legal agreements and form the basis for payment liabilities with a government…If multiple such agreements are substantially interconnected, this shall be considered a project.”12

● The EU Directives and ESTMA define substantially interconnected as, “a set of operationally and geographically integrated contracts, licenses, leases or concessions or related agreements with substantially similar terms…”

● SEC references “interconnected” not “integrated” contracts, licenses etc.

● However, the SEC’s rule does not require projects to have “substantially similar terms” in order
to be reported as one project.

o This rationale is explained, “Operations under one agreement may lead to the parties entering into a second agreement for operations in a geographically contiguous area. If a change in market conditions or other circumstances compels a government to insist on different terms for the second agreement, then under our proposed definition the use of those different terms by themselves would not preclude treating the second agreement as the same project when, operationally and geographically, work under the second agreement is a continuation of work under the first.”13

● The SEC provides a non-exclusive list of suggested factors for issuers to use to determine whether two or more agreements are “operationally and geographically connected” and can be treated as a single project. Companies should determine:

o “(a) whether the agreements relate to the same resource and the same or contiguous part
of a field, mineral district, or other geographic area;

o (b) whether the agreements will be performed by shared key personnel or with shared
equipment; and

o (c) whether they are part of the same operating budget.”14


What is the threshold of payments being disclosed?


● Companies are required to disclose all payments that are “not de minimis.”

● “Not de minimis” means “any payment, whether made as a single payment or a series of related payments, which equals or exceeds $100,000 during the most recent fiscal year.”15


How will the information be disclosed to the public?


● All information will be publicly disclosed on an annual basis.

● Companies will file a Form SD, outside of their annual report.

● The information is electronically tagged using the eXtensible Business Reporting Language (XBRL) format.

● The information will be posted along with annual reports in SEC’s EDGAR online database and available free of charge to anyone with Internet access.


Does the SEC allow for alternative reporting?


● Companies may use alternative reports prepared under the regulations in other jurisdictions to comply with the US rule if the SEC determines that the jurisdiction’s requirements are “substantially similar” to the US rule.

● The SEC has determined that the current reporting requirements in Canada and the EU are “substantially similar,” subject to certain conditions.

● USEITI reports were also deemed “substantially similar,” but only in relation to payments made to the Federal Government.

o Reports must still be tagged in XBRL format.

o The report must be made publicly available prior to filing with the SEC.

o Reports can be filed in alignment with the other reporting jurisdictions’ timeline, as long as the SEC is given advance notice and reports are filed with the SEC no later than 2 days after the alternative jurisdictions deadline.

● Issuers, governments, industry groups, and trade associations may submit applications for additional alternative reporting determinations under Exchange Act Rule 0-13.


What kinds of liability do companies face for payment information disclosed?


● Disclosures must be “filed” rather than “furnished.”16

● Under US securities law, “filed” disclosures are subject to a private right of action. This means that shareholders may bring a civil suit in the Federal courts against companies if they document significant financial loss resulting from material misstatement of filed data.

● Moreover, the SEC may fine an issuer for filing false information in an annual report.


Does the rule specifically address attempts to evade the disclosure requirements?


● Yes. The SEC adopted a revised “anti-evasion” provision:

o “Disclosure is required under this section in circumstances in which an activity related to the commercial development of oil, natural gas, or minerals, or a payment or series of payments made by a resource extraction issuer to a foreign government or the Federal Government for the purpose of commercial development of oil, natural gas, or minerals is not, in form or characterization, within one of the categories of activities or payments specified in Form SD, but is part of a plan or scheme to evade the disclosure required under this section.”17


More information:


● To access company annual reports: www.sec.gov/edgar/searchedgar/companysearch.html

● List of foreign companies reporting to the SEC: www.sec.gov/divisions/corpfin/internatl/companies.shtml

● For information on the history of the law, or the PWYP-US campaign, please visit: www.pwypusa.org

● To learn how to dig deeper into oil, gas and mining payment data, visit: www.extractafact.org

For questions, please contact Jana Morgan, Director, PWYP-US: jmorgan@pwypusa.org.


1 See SEC, Disclosure of Payments by Resource Extraction Issuers, Final Rule, June 2016, p. 26.
2 See SEC Final Rule, June 2016, p. 30.
3 See SEC Final Rule, June 2016, p. 119.
4 See SEC Final Rule, June 2016, p. 60.
5 See SEC Final Rule, June 2016, p. 44.
6 See SEC Final Rule, June 2016, p. 40.
7 See SEC Final Rule, June 2016, p. 41.
8 See SEC Final Rule, June 2016, p. 41.
9 See SEC Final Rule, June 2016, p. 39.
10 See SEC Final Rule, June 2016, p. 43.
11 See SEC Final Rule, June 2016, p. 26.
12 See SEC Final Rule, June 2016, p. 16.
13 See SEC Final Rule, June 2016, p. 65.
14 See SEC Final Rule, June 2016, p. 266.
15 See SEC Final Rule, June 2016, p. 26.
16 See SEC Final Rule, June 2016, p. 145.
17 See SEC Final Rule, June 2016, p. 257.

It’s Official – the SEC rule has been published in the US

The long-awaited rule released by the Securities and Exchange Commission (SEC) on 27th June 2016, known as Section 1504, is a historic achievement and a significant step forward for transparency in the extractive sectors. The final rule was published in the Federal Register on 27th July, 2016 and becomes effective starting 26th September, 2016.

The rule requires oil, gas and mining companies listed on US stock exchanges to publicly report, by project, the payments made to US and foreign governments for access to natural resources in all countries of operation.

After an extremely long wait the Dodd-Frank Act was first adopted in 2010 – the final version of the rule has now been adopted – and has been a significant priority for Publish What You Pay (PWYP).

The first reports including payment data will cover the fiscal year to 30 September 2018, and are therefore expected to be released in late 2018/early 2019. Once released, PWYP’s Data Extractors will be able to analyse the reports and piece together a clearer picture of how US-listed companies and their projects play a role in affecting communities in the countries where natural resources are extracted.

The United States has the world’s largest extractives market, which means some of the largest oil companies, including Chevron and ExxonMobil and other state-owned companies, will have to disclose their payments. These payments from ‘superpower’ oil and extractive companies will hopefully encourage more laws and rules to come into place following the SEC initiative.

Having access to all this payment data makes it more difficult for companies to hide how they operate. This new transparent approach aims to provide communities with a greater understanding of how to follow money and hold their governments to account for how extractive related revenues are received and spent.

PWYP members in resource-rich countries want to use mandatory disclosures, such as the Dodd Frank rule, to reduce the opportunities for corruption or mismanagement. By implementing more rules like this, activists will have more chances to gather concrete evidence to support their claims and ensure no secret deals are passing under the radar.

The rule’s adoption will have a domino effect of project-level reporting in EITI participating countries. Article 5.2 of the EITI Standard states that “Reporting at project level is required, provided that it is consistent with the United States Securities and Exchange Commission rules and the forthcoming European Union requirements.” Though the EITI has yet to issue a timetable for enforcing this, it will further increase the amount of project-level data which we will see in the coming years.


See below for a brief history of mandatory disclosure rules:

Mandatory disclosures infographic

PWYP-US Workshop 2 – Calculating and visualizing USEITI data using QGIS

This blog was originally posted on www.ExtractAFact.org on July 11, 2016.

On June 7, Publish What You Pay – United States held the second training workshop on using extractives data and QGIS, an open source GIS mapping application. This time around, we delved deeper into visualizing data, and explored how to calculate a new data point from imported datasets in QGIS. ​


The first training workshop, held on May 19, centered around cleaning and organizing data in preparation for use in data analysis and data visualization software. If you missed that training, we recommend that you watch the first workshop video recording and follow along in the training manual.


Picture

The training instructor, Diana Parker, walked participants through the steps of importing data andshapefiles, gave a refresher on the basic visualization options introduced in the first training session, and explained more advanced visualization techniques in QGIS.

Diana also demonstrated how QGIS can be used to compare datasets and calculate a new field using pre-existing data. For example, we determined the the
Federal revenue received per barrel of oil, by county for a single year. We then visualized that data on a map of the US.

​To determine the estimated revenue per barrel, participants were instructed to import the shapefile depicting US county boundaries as avector layer in QGIS. Next, we imported the Federal oil and gas production by county and the Federal oil and gas revenue by county datasets into QGIS.


For the purposes of this training these datasets have already been sorted and organized from the original USEITI datasets for use in QGIS and made available to training participants here. To learn how to prepare the Federal production and revenue USEITI datasets refer to pages 1-4 of the workshop 2 training manual or watch the full walkthrough covered in the first workshop.

Both of these datasets include FIPS codes, which are unique identifiers for geographic information throughout the US. For data to be placed on a map using software like QGIS, the data will need to have some form of geographical identifier. The FIPS codes in the datasets used in this training relate to state and county locations. To associate the data with the correct location in QGIS, the two datasets were joined to the US county boundaries shapefile and the FIPS field was matched to the GEOID target field in the US county shapefile.

​ With production and revenue datasets joined, Diana then instructed participants to duplicate the shapefile layer and to rename the new layer to “USD per BBL (2013).” With this new layer selected participants used the QGIS calculator function to create a new attribute “USDBBL13” using the expression {“Oil_bbl13” / “ProdOil13”}. The expression instructs QGIS to divide the Federal oil revenue by the oil production on Federal land for each county revealing an estimated revenue figure per barrel of oil for each county for the year 2013. The “USDBBL13” attribute can then be selected as the value to be visualized in the new layer as seen below.

The visualization raises some interesting questions. If you look at the legend in the map above you will see that the counties highlighted in red have revenue per barrel of a net negative amount. On the other end of the spectrum we can see the data showing revenue per barrel of up to $362,022. The way the data is presented above is good example of why you should be checking the data and visualizations as you go, as well as the importance of using the right data classifications. By changing the data classifications for the legend we reveal that the negative and extremely high revenue per barrel values only accounted for three counties included in the dataset, as can be seen in the map below (look for the lowest values in yellow and highest in light blue). Obviously there are still serious questions about revenue per barrel values. However, by adjusting the legend to more appropriately fit the underlying data we get a more useful visualization as seen in the map below. For more on how to choose the right data classification, refer to p. 12 of the workshop 2 training manual.

When working with several datasets and numerous layers of shapefiles, things can get complicated and it is important to keep your work organized. As Diana
guided participants through the training she cited best practices to follow while working with QGIS.

  • Before starting a project, set aside a folder to house all the relevant files, including the csv files, shapefiles, and the QGIS project file.
  • Save your work often.
  • When working with multiple datasets in a single map you will often duplicate layers, as Diana demonstrates in this training. It is important to
    rename duplicated layers to keep things organized.
  • After datasets are joined to shapefiles, the datasets themselves can be safely deleted from the layers panel window.
  • As additional layers with visualized data are added they can be dragged up and down in the layers panel to change the stacking order of the
    visualizations on the map.
  • The visualization of each layer can be toggled on and off, allowing you to check that the data you want depicted in your final map is not obscured
    behind other layers.

This training also covered some additional interesting ways to visualize data and produce exportable maps as seen in the screenshot above. The map above depicts the revenue for oil & gas production on Federal lands for each county in Montana in one layer. In an additional layer, pie charts present the percentage of total revenue from different resource types or exploratory projects.

You can watch the full recording of the second workshop here to learn more about visualizing data in QGIS. Follow this link to download the training manual and datasets. After viewing the course, please share your feedback by filling out our post-course survey. We have additional data skills training workshops planned for the future and your input can help in determining the topics we cover.

Extract-A-Fact , a project of Publish What You Pay – United States , is intended to empower citizens, activists and journalists to take oil, gas, and mining data and use it as a tool to demand accountability from governments and extractive companies. Extract-A-Fact works in partnership with PWYP International’s Data Extractors Program.

PWYP-US kicks off data skills training series: Workshop 1 – Data Organization and GIS Basics

This blog was originally posted on
www.extractafact.org
on June 3, 2016.

On May 19, Publish What You Pay – United States (PWYP-US) hosted the first of two data skills training workshops to explore ways of using the USEITI data with the open source QGIS mapping software. In the first session, our trainer, University of Maryland Geographical Sciences PhD candidate, Diana Parker, introduced the basics of organizing data as well as an introductory understanding of geographic information systems (GIS).

With the growing availability of voluntary disclosures through the Extractive Industries Transparency Initiative (EITI) and mandatory disclosure requirements coming into effect in a number of countries (and soon in the United States) there is an ever expanding pool of natural resource data that is now available. With these trainings, PWYP-US sets out to empower interested actors and provide them the tools to apply this wealth of data to improve governance of the natural resource sector. The United States implementation of EITI ( USEITI) dataset was used in this training as an example of how geographically delineated data can be cleaned, sorted, and mapped.

Attendees were guided through the processes of preparing the USEITI data for use in QGIS, followed by an introductory tutorial of making basic maps. The first step of cleaning and sorting the data is critical to ensure the interoperability with applications like QGIS. Not all datasets are created equal. For example, datasets concerning oil production and revenues from different sources are more than likely presenting the data in slightly different ways. The initial step of any data analysis will often be working with software such as Excel and the use of pivot tables to ensure the data file is prepared in a way that can be interpreted by data analysis and data visualization software. This critical first step of of preparing the data was covered in detail in this introductory training.

Once organized, the data itself can yield some insights, but visualizing the information can be an important next step in raising questions and drawing conclusions from the data. Through visualizations the information can be made more accessible to broader set of stakeholders. There are a number of ways to visualize data that should be familiar to most people who have worked with even the most basic set of financial or budget spreadsheets. There are even some useful shortcuts to creating quick bar graphs and pie charts, such as using the ‘explore’ button in online apps like Google Sheets. Organizing geographically-tagged data and visualizing the information in a map can be a very effective way of gaining a better understanding of the underlying data.

The basic map below (one of the outputs of the first training session) visually depicts which counties across the United States have the highest revenue from natural resource extraction.

EAF GIS 1 map

As one example, advocates can draw conclusions from such a map and decide how best to direct their campaigns to assist communities most affected by mining activity.

There is much more that can be done with QGIS using the USEITI data. For those interested in learning more, the next training will be held June 7 and will instruct participants on how to construct more complex maps in QGIS.

Click here to watch the training video and follow this link to download the instruction manual and datasets. Instructions for installing the free QGIS software are also available in the linked Google folder. If you take our course, tell us what you think by filling out our post-course survey.

Extract-A-Fact , a project of Publish What You Pay – United States
, is intended to empower citizens, activists and journalists to take oil, gas, and mining data and use it as a tool to demand accountability from governments and extractive companies. Extract-A-Fact works in partnership with PWYP International’s Data Extractors Program.

The USA’s oil transparency rules: Worth the wait?

2,000 days. That’s longer than the First World War; longer than we have to wait between Olympic Games or between football World Cups; longer than Jimmy Carter, George HW Bush, Gerald Ford or JFK each were President of the USA (and almost exactly the same time as Nixon was in power). It’s even longer than it took Belgium to form a Government after its 2010 election (an impressive 589 days).

It’s also how much time has passed since Barack Obama signed the Dodd-Frank Act into law. Section 1504 of that law requires all US-listed oil, gas and mining companies to publicly disclose the payments they make to Governments around the world. But in order for that to come into force, the US Securities and Exchange Commission (SEC) needs to adopt a rule, specifying the level of detail that companies need to disclose. They had a go at doing that back in 2012, but, thanks to a lawsuit from Big Oil, the SEC had to go back to the drawing board and re-write its rule.

Finally, thanks to public pressure and a lawsuit by Oxfam America, the SEC has done it, and last month saw the draft rule published. PWYP-US is currently analysing the details, but overall, it’s good news – it is comparable to the EU Directives (so most companies which are listed in both the US and EU will be able to submit the same report in both places) and the early general verdict is that this is a strong proposed rule, which requires public disclosure of payments by company and by project.

So what’s next? Well, PWYP’s legal and policy experts are busily putting together their comment to the SEC, which will be available on this page soon after the 16 February deadline. We expect we won’t be the only ones to comment! There will follow a brief period for people and organisations to respond to any comments they’ve seen, and then a chance for the SEC to tinker with it before issuing the final rule.

There’s just a few months to go until the SEC votes on the final rule in June. Let’s hope the SEC holds firm and maintains its world-leading rule.