Tom Cardamone: SEC now a year late on crucial transparency rules
April 17th, 2012
April 17th, 2012
Today is not just Tax Day in the United States. It is also the first anniversary of the deadline for the SEC to issue rules on Dodd-Frank Secti0n 1504 – the breakthrough transparency provision for the oil, gas, and mining sectors. Task Force Managing Director Tom Cardamone, as a guest post at Trust Law, writes,
A year after the deadline, established by Congress when Dodd-Frank passed, the SEC has still not yet issued the final rule on Section 1504. The delay comes as the regulator faces intense pressure from oil industry lobbyists, including from the American Petroleum Institute (API). The API wrote a letter to the SEC laying out the basis for a legal challenge to potential rules, which some have characterized as an implicit threat of expensive litigation. These demands include shifting the reporting requirement from a project-by-project basis, which is explicitly required in the statute, to a geographic basis, such as by a geological basin or province. This move would maintain opacity in the extractive industries, and allow an environment that fosters corruption and bribery to continue.
The SEC needs to stop delaying and issue the strong transparency rules that Congress passed nearly two years ago. Further delay only serves as an invitation to industry lobbyists to continue to push for loopholes that allow them to execute unaccountable deals with governments. These rules are already long overdue.
Resource-rich developing countries often face a Faustian relationship with their extractive industries wealth. While exports of oil, gas, and minerals can create significant wealth for a society, it can also invite staggering levels of corruption. Many lack the governing institutions necessary to maintain an effective rule of law.