Financial Times: Don't Let Oil Lobby Block Transparency

Issue: Dodd-Frank
Country: United States
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The Financial Times has added its voice to the growing call to let Dodd-Frank transparency rules proceed as Congress intended. In a starkly-worded editorial, the FT said the oil lobby's efforts to block reporting of per-project details "should not be allowed to succeed."

In the US, the American Petroleum Institute, the lobby group for the oil industry, has mounted a rearguard action to engage regulators in a battle it lost against legislators in 2010. Senators Ben Cardin and Richard Lugar inserted into the Dodd-Frank regulatory reform bill a requirement that US-listed oil, gas and mining companies report publicly their payments to host governments. The Securities and Exchange Commission must now specify exact rules. It is this step that lobbyists want to trip up.

In Europe, too, rule-making procedures give special interests second chances. Last year the Commission proposed similar reporting requirements, now going through the Council and the parliament. Denmark is laudably eager to get the law passed before its Council presidency ends in June. It should not be weakened along the way.

The case for public reporting has long been clear. Fuel and mineral resources hold back the development of countries that have them as often as they promote it. The concentrated wealth they entail is a breeding ground for corruption and waste. Publicity around what governments are paid for national wealth extracted from the ground is not sufficient for managing it better, or for reducing the instability of resource-rich states that also threatens the well-being of importers. But it is necessary.

Many extractive companies are happy to live with this, but the most recalcitrant demand changes. On both sides of the Atlantic the fight is on to reshape the reporting rules so that whatever is published is less informative. In particular, it is suggested that the laws’ call for reporting project-by-project details be watered down with overbroad definitions of “project”. There is no justification for this: most payments to states are calculated on a project basis anyway, so publishing such detail is no great burden.

Read the entire editorial at the Financial Times.

UPDATE: The ONE campaign, which is leading petition drives to support both strong U.S. disclosure regulations and the proposed EU transparency law, weighs in on the support from the Financial Times and The Economist.

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