Published On: Thu, Nov 8th, 2012

SEC Blocks Oil Industry Assault on Transparency

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8 November 2012

NEW YORK—The Securities and Exchange Commission (SEC)’s decision to reject oil companies’ demand to delay enforcing new transparency rules marked a victory for investors as well as citizens wanting accountable government, the Revenue Watch Institute said today.
In an administrative decision, the SEC emphatically rejected the request by the American Petroleum Institute (API) and the U.S. Chamber of Commerce to delay putting into effect rules requiring oil, natural gas and mining companies to make public what they pay governments for access to natural resources, for each country and each project. API had demanded the SEC to “stay” the disclosure rules until federal courts decide a lawsuit filed by API to overturn the rules and the underlying  law, passed by Congress in 2010.
“API and its allies want to return to the era when secrecy was acceptable, when companies and governments considered payments as their exclusive information,” said Daniel Kaufmann, president of Revenue Watch. “The SEC decided the API’s extraordinary opposition to disclosure should not delay the rules from going into effect.”
Finding API’s arguments to be  unfounded, the SEC said the oil industry’s claim that greater disclosure would put the companies at a competitive disadvantage was “too speculative and unsupported by evidence.” It added that API failed to demonstrate that any foreign government prohibits the disclosures required by the new rules.
“We are not persuaded that the requested stay would serve the public interest,” the commission concluded. A stay would also have contradicted Congress’s interest in the rules’ benefits—“promoting accountability, stability and good governance.”
The SEC’s rules carry out Section 1504 of the Dodd-Frank Act, requiring companies to report government payments country-by-country and each project – the model also being followed by the European Union as it develops its own transparency legislation.
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