In July 2010, the U.S. Congress passed Section 1504 of the Dodd-Frank Act, a measure requiring companies registered with the Securities and Exchange Commission (SEC) to publicly report how much they pay governments for access to oil, gas and minerals.
Revenue Watch and a wide range of development, anti-corruption and anti-poverty organizations worked hard to support the passage of this landmark requirement. It is a powerful tool that allows investors to properly assess risk and citizens to see the value placed on their natural resources.
But U.S. District Judge John D. Bates vacated a Securities and Exchange Commission rule requiring energy and mining companies to disclose payments to governments, a major setback for anti-corruption advocates and a victory for the oil industry.
Section 1504, also known as the Cardin-Lugar provision in the 2010 Dodd-Frank Act, attempted to address the so-called “resource curse,” by which valuable resources such as oil and gas reserves “can be a bane, not a blessing, for poor countries, leading to corruption, wasteful spending, military adventurism, and instability,” as then-Sen. Richard Lugar (R-Ind.) put it at the time. (We can always count on the GOP to dismantle anything that's good for humanity.)
The House passed a bill, H.R. 1613, with a provision weakening disclosure requirements under Section 1504 of Dodd-Frank. But for the oil industry to say that this is a huge victory is an understatement.
Judge Bates remanded it to it to the SEC to be redrafted, calling the agency’s interpretation of two key provisions “arbitrary and capricious.” The SEC issued its final rule last August after a lengthy consultation process marked by delays.
Building on the reporting standard established by the U.S. law, several countries have declared interest in establishing similar requirements, including the United Kingdom, Norway and South Korea. In October 2011, the European Commission adopted legislative proposals that build on the U.S. precedent by requiring publicly traded and private EU companies to disclose payments to governments made in exchange for oil, gas, mineral and forest resources. In the U.S., the SEC released final regulations implementing Section 1504's requirements on August 22, 2012.
Many poor countries like Equatorial Guinea is brimming with oil, but very little of the money from that oil is being spent on schools or hospitals or new jobs. It's being spent instead on mansions and luxury cars and private jets by their government officials.
Right now, Big Oil is trying to stop the rule by the Securities and Exchange Commission that would require oil and gas companies to publish what they pay to governments like Equatorial Guinea. But if Big Oil wins, that means billions of dollars will likely keep lining the pockets of their country's (and others) corrupt rulers.
Demand to know (Online petition) what oil companies are paying and where that money is going. Oil-rich countries shouldn't be home to some of the poorest in the world. Instead, it should be a model for how oil revenues eradicate poverty and lessen social inequality.
That's the VERY LEAST the oil companies should do, especially if they are allowed to continue extracting America's natural resources from federal lands and then exporting them other countries to enrich a few corporate executives.