SEC Stands Firm as Industry Tries to Un-Do Transparency Law

March 28, 2013

As natural resources companies wage a legal battle against a new regulation that calls for more revenue reporting, the Securities and Exchange Commission (SEC) has stood its ground, firmly rejecting industry’s anti-transparency arguments.

The regulation requires oil, gas, and mining companies to publicly disclose their payments to U.S. and foreign governments in annual reports to the SEC. The companies—who are being represented in court by the American Petroleum Institute, the U.S. Chamber of Commerce, the Independent Petroleum Association of America, and the National Foreign Trade Council—argue that the regulation is too burdensome and violates their First Amendment rights.

As an SEC attorney noted last Friday, the regulation “doesn’t even touch on the core values” of the First Amendment, openness coalition Publish What You Pay (PWYP) reported.

Rather, the regulation will help combat corruption in resource-rich countries and make oil, gas, and mining companies more accountable to governments and citizens. In the United States, this means taxpayers can be more confident that they are getting the revenues they are owed from natural resources that are extracted from public lands.

“In an era where tax dollars are scarce, this common-sense law shines a light on billions in financial flows to the U.S. and foreign governments to allow citizens to follow the money and make sure it’s put to good use,” PWYP U.S. Director Isabel Munilla said in a press release.

In addition to benefiting taxpayers at home, the United States’ commitment to revenue transparency is becoming a model for other countries—which is important, given that many U.S. oil, gas, and mining companies do business abroad.

“The U.S. has introduced legally binding measures to require oil, gas and mining companies to publish key financial information for each country and project they work on. And I want Europe to do the same,” UK Prime Minister David Cameron wrote last year.

The lawsuit comes at a time when the United States is preparing even more transparency regulations through a voluntary global effort known as the Extractive Industries Transparency Initiative (EITI). Danielle Brian, the executive director of the Project On Government Oversight, sits on the advisory committee for the U.S. EITI, along with other representatives from civil society, government, and industry. The next U.S. EITI meetings—which the public may listen to live via phone—will be held on April 11, May 1, and May 2.

Image by Flickr user marianne muegenburg cothern.

Topics: Energy and Natural Resources

Related Content: Extractive Industries Transparency Initiative - EITI, Information Access, Oil & Gas Royalty Revenue, Securities and Exchange Commission

Authors: Mia Steinle

Submitted by Kingart at: March 31, 2013

It's about time. Oil, gas and coal corporations want to extract in every viable nook and cranny of the U.S., and insist they be allowed to treat private and public lands as if they were their own ATMs, but they decline to fully and accurately disclose the sources and volume of their revenue. How are we the people to know what the true value of all the licenses we allegedly empower the government to grant them? And the taxes we are owned as a result? How much, exactly, do or should some of these big energy behemoths pay the treasury? Of course, they don't want us to know; that's their point, but OUR point through the government should properly be that if they want permission, they must disclose. Period. What arrogance that they obviously feel this should be as much a one-way street as possible, where they get to set the rules and the public and government have no recourse but to concur. Their First Amendment rights! What a crass and venal snooker. News flash: with rights come obligations. I recall hearing similar complaints before BP in the Gulf; we still hear it; the argument was a load of bull then, and it remains so. We've more than enough trouble already with the flood of shady, undisclosed "Citizens United" money, oil and otherwise, attempting to buy political contests and favors for big energy, like access to ANWR and national parks and hydrofracking unencumbered by "burdensome" rules. The terms of the deal should be written explicitly in stone: no disclosure, no license. No exacting compliance with regulations, no license.

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