In Final Days at the SEC, Chairman Clayton Leads Vote Approving Weak Final Rule for Oil, Mining Payment Disclosure Provision of Dodd-Frank Act
WASHINGTON, D.C. — By a vote of 3-2, the U.S. Securities and Exchange Commission (SEC) approved a final rule to implement Section 1504 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act requiring oil, gas, and mining companies to disclose their payments to governments around the world.
The Financial Accountability and Corporate Transparency (FACT) Coalition, which has long supported increased corporate transparency of tax payments, including as required by Section 1504, condemned the rule approved today as it weakens the anti-corruption impact of the law and reduces the usefulness of the disclosures for investors.
Ian Gary, executive director of the FACT Coalition, issued the following statement:
“By approving this rule, the US is stepping back from its historic leadership role on the transparency of oil, gas, and mining company payments to governments. Based on bipartisan support from Senators Cardin and Lugar and others more than a decade ago, the US approved the world’s first such law requiring the disclosure of tax and other payments to host governments to inform investors and reduce corruption. Following US leadership a decade ago and the enactment of similar laws in other jurisdictions, companies active in the extractive industries have already disclosed more than $1 trillion in payments under laws in European Union member countries, the United Kingdom, Canada, and Norway. Rather than fulfilling its historic leadership role, this new rule takes a step back and falls below the standards set by other disclosure regimes.”
“The oil, gas, and mining sectors are plagued by corruption, causing harm to local communities, destabilizing governments, and undermining the national security of the United States. While many companies, such as Shell and Total, have embraced transparency — and noted the low cost of reporting payment information – certain fossil fuel lobbyists have secured another gift on their wish list.”
“The rule approved today would allow for continued secrecy for companies, denying investors the information they need to make sound investment decisions. Investors with over $12 trillion in assets under management previously called for strong rules implementing Section 1504, including fully-public, company-specific and disaggregated information at the project level, consistent with the global standard.”
“Oil companies and corrupt kleptocrats should no longer be able to exploit US financial secrecy, and investors should have the information they really need to make informed investment decisions.
“Once in office, President-elect Biden should restore America’s global standing on oil and mining transparency by working with the SEC to revise and strengthen this rule.”
Notes to Editors:
- Click here for the FACT Coalition’s submission to the SEC during the 2020 rulemaking process.
- Over $1 trillion in payments made to over 150 countries have been disclosed by more than 950 public, private and state-owned companies because of the implementation of extractive industry payment disclosure laws around the world.
- Several of the world’s largest oil and mining companies, including BHP, BP, Equinor, Royal Dutch Shell, and Total, have publicly endorsed a strong rule that aligns with the international transparency standard.
- The FACT Coalition advocates for full, public country-by-country tax transparency across industry sectors. In December 2019, FACT welcomed the Global Reporting Initiative’s first global standard around public disclosure of taxes paid to governments.
Executive Director, The FACT Coalition
About the FACT Coalition
The Financial Accountability and Corporate Transparency (FACT) Coalition is a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair and honest tax system that addresses the challenges of a global economy and promoting policies to combat the harmful impacts of corrupt financial practices.
For more information, visit www.thefactcoalition.org.