Oil Industry Must Stop Supporting Secrecy, Say Financial Transparency and Anti-Poverty Groups
February 13th, 2012
February 13th, 2012
Washington, DC – Anti-poverty groups and supporters of financial transparency today urged the oil industry to drop its attacks on a new law that will reduce corruption and reveal the money trail between industry and resource-rich governments.
To highlight the hush-hush payments that often occur between oil companies and resource-rich governments, advocates of transparency and economic justice are releasing a full page ad in the Wall Street Journal. Oxfam America is also sponsoring online ads in the Washington Post, Wall Street Journal, Politico, Huffington Post and The Hill throughout the week. They also call on the public to take action by telling oil companies, such as Chevron, Exxon, Shell and ConocoPhillips, to stop fighting transparency.
“Countries around the world have suffered deeply from corruption, conflict and unfair foreign exploitation,” said Simon Taylor, founding director of Global Witness. “By trying to water down these transparency laws, oil companies are in effect trying to gag millions of people who have a right to know how their countries’ wealth is being managed and who is getting the money.”
Taylor added, “They must not be allowed to succeed.”
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 for the exploration and extraction of oil and minerals. However, the American Petroleum Institute (API) – the oil industry’s main Washington lobbying arm – is now threatening to sue the SEC unless the agency withdraws its proposed rules and starts from scratch. Despite Congress’s requirement of early action, the SEC — the regulatory agency responsible for issuing final rules — continues to delay the rule-making process.
“The oil and gas industry loves to trumpet its support for transparency initiatives and their tax contributions to the US government,” said Ian Gary, senior policy manager for Oxfam America’s oil, gas and mining program. “But when a new law requires them to tell the public exactly how much gets paid and to whom around the world, they bring out the lobbyists and lawyers.”
Gary added, “The SEC must not give in to the wishes of those who don’t want to follow the law.”
The threat follows copious public comments submitted to the SEC and lobbying meetings 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 that 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 required to be disclosed under Section 1504 and that affected communities and financial investors want to see. 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.
Recent moves outside of the US indicate a strong global movement for more transparency in the extractives sector. The European Commission recently introduced a legislative proposal that would require payment disclosures similar to those in Section 1504. The European Parliament and European Commission are currently debating the proposal. Hong Kong has also passed extractive industry laws.
“The world is waiting for the United States to act. The SEC has an opportunity to help poor countries suffering from the so-called resource curse help themselves,” said Gary. “We are sending a strong signal that we will not give up until we see rules that follow the letter of the law.”
The ad campaign is led by Oxfam America. Global Witness, the Revenue Watch Institute, 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.