US SEC Looks Again At Making Natural Resources Industry Reveal Payments
WASHINGTON, Dec 11 (Reuters) - The U.S. Securities and Exchange Commission on Friday took up a new draft of a rule to require oil, gas and mining companies to disclose payments they make to foreign governments, after a federal judge ordered it to speed up a process that has been locked in the courts for years.
The rule, as called for in the Dodd-Frank Wall Street Reform law of 2010, would require the companies to disclose how much they pay governments in taxes, royalties and other types of fees for exploration, extraction and other activities.
Human-rights groups such as Oxfam say it could become an important weapon in fighting corruption in resource-rich countries. Companies in the energy industry, meanwhile, say it could give their foreign competitors an advantage by making important financial information public.
SEC Commissioner Luis Aguilar, a Democrat, said in recent years other countries have created mandates for greater disclosure and some companies voluntarily open their books.
"This type of disclosure is consistent with an emerging global consensus to combat government corruption through greater transparency and accountability," he said.
The commission voted 3-1 to open the new proposal up to a public comment period that ends Jan. 25.
Under the draft, any U.S. or foreign company that files with the SEC would have to disclose payments that furthered commercial development or that totaled at least $100,000 over the course of the fiscal year. That would include payments made by subsidiaries, as well as money sent to foreign subnational governments or the U.S. government.
Commissioner Kara Stein, also a Democrat, said the proposal would give companies flexibility and allow them to seek exemptions.
Casting the Dodd-Frank requirement as an afterthought inspired by a political agenda, Commissioner Michael Piwowar, a Republican, said the proposal would not help investors and could set new legal precedents. Also, he said, it would put publicly traded U.S. companies at a disadvantage.
The commission completed work on its first version in 2012, a few months after human-rights group Oxfam sued it over delays. Trade groups then sued, accusing the SEC of conducting a flawed analysis of industry costs. After a federal judge tossed the rule out in 2013, the SEC pledged to draft a new version. Frustrated with delays, Oxfam sued again and in September a federal judge ordered the commission to fast-track it.
(Reporting by Lisa Lambert and Sarah N. Lynch; Editing by Andrea Ricci)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.