NEW YORK/WASHINGTON, D.C.—Supporters of financial transparency are urging the oil industry to drop its attacks on a new law that will reduce corruption and reveal the money trail between industry and governments of countries rich in oil, natural gas and minerals.
To highlight the secret payments that often occur between oil companies and governments, Revenue Watch and other advocates of transparency are advertising in the Wall Street Journal, calling on the public to tell oil companies to stop fighting transparency.
"In 2010, Congress passed a law telling oil companies to make public what they pay to governments, in the United States and abroad, a measure that will help fight corruption and build stability in some of the world's poorest countries," said Karin Lissakers, director of Revenue Watch.
"The U.S. Securities and Exchange Commission is finalizing the rules for this disclosure, but companies are fighting to weaken them," Lissakers said.
The law, known as Section 1504 or the "Cardin-Lugar" provision of the Dodd-Frank Act, requires oil, gas and mining companies to disclose payments they make to host governments. The SEC—the regulatory agency responsible for issuing final rules—has delayed releasing them nearly a year beyond the deadline set by Congress.
The American Petroleum Institute (API)—the oil industry's Washington lobbying arm—says it will challenge the rules unless the SEC re-starts the process from scratch. The warning follows public comments submitted to the SEC by API, Chevron, Exxon, Shell and other companies arguing the law might put companies at a competitive disadvantage or force them to violate local secrecy laws. Companies have not shown the SEC any examples of local laws might forbid the disclosure of this information.
Some companies—including Talisman Energy, Statoil, AngloGold Ashanti and Newmont Mining—already disclose the payments they make in every country of operation. In some cases, they volunteer this information at the project level—the kind of information affected communities and financial investors want to see. And in a submission to the SEC on its draft rules, a group of investors representing more than $1.2 trillion in assets welcomed the proposed rules issued by the SEC in December 2010.
There is a strong global movement for more transparency in energy and mining. The European Council recently introduced a legislative proposal that would require payment disclosures similar to those in Section 1504. The European Parliament and European Council are currently debating the proposal.
Oxfam, Revenue Watch, Global Witness, Global Financial Integrity, The Task Force on Financial Integrity and Economic Development and Equatorial Guinea Justice are co-sponsors of the Wall Street Journal print ad. Oxfam also has advertisements on the websites of the Washington Post, Wall Street Journal, Politico, Huffington Post and The Hill throughout the week of February 12.
Rebecca Morse, advocacy officer
Robert Ruby, head of communications