The U.S. District Court for the District of Massachusetts has ordered the Securities and Exchange Commission to expedite long-delayed rulemaking requiring oil, gas, and mining companies to disclose information—on a country-by-country, project-by-project basis—about payments made to host governments.
In the court’s summary judgment decision, Judge Denise Casper concluded that the SEC’s “duty to promulgate a final extraction payments disclosure rule remains unfulfilled more than four years past Congress’s deadline” and it “unlawfully withheld” agency action. The ruling requires the SEC to submit an “expedited schedule” for issuing the final rule within 30 days. The court will make further orders as necessary and retain jurisdiction to monitor the schedule and “to ensure compliance” with its order.
Section 1504 of the Dodd-Frank Act requires oil, gas, and mining companies publicly traded in the U.S. to disclose the payments made to governments for the extraction rights to their natural resources. When Congress passed the Dodd-Frank Act in 2010, it required the SEC to issue a final rule by April 17, 2011. When the SEC did finally issue a rule in 2012, it was challenged by the American Petroleum Institute and vacated by the U.S. District Court. In September 2014, Oxfam America sued the SEC for “unlawfully withholding” a rewritten final rule.
The SEC, in March, said it was unlikely to act on the issuance of a new rule until 2016 at the earliest, arguing in court filings that Oxfam America’s demands for a 2015 deadline were “unachievable.”
“We look forward to collaborating with the SEC to help provide the information they need to issue a rule that follows the global transparency standard of public, project-level, country-by-country disclosure with no exemptions,” Ian Gary, senior policy manager of Oxfam America’s extractive industries program, said in a statement. He added that roughly 30 countries have adopted laws requiring similar public disclosures, including the European Union, Canada and Norway and these laws give the SEC “a clear standard” to follow.
"Today's decision means that the SEC can't dawdle when Congress gives it a deadline," said Jonathan Kaufman, legal policy Coordinator at EarthRights International and counsel for Oxfam America.