Oxfam America, an international relief and development organization, is suing the Securities and Exchange Commission for, in its words, “unlawfully withholding” a final rule implementing a Dodd-Frank Act requirement that oil, gas and mining companies to disclose payments made to governments for the extraction of natural resources.
When Congress enacted the legislation on July 21, 2010, it gave the SEC a 270-day deadline to promulgate rules. After Oxfam America sued for undue delay, the Commission issued a rule in August 2012, which was then challenged in court by the American Petroleum Institute and vacated by the U.S. District Court. Although the rule was sent back to the Commission to be redrafted, the SEC has yet to reissue the new proposal. “More than 1,500 days have passed since July 21, 2010, and more than a year since the Court’s ruling – putting the SEC in violation of its Congressional deadline,” a statement from Oxfam says. “Yet the Commission has determined that it may not get started on the rulemaking until March 2015 and has indicated that it plans to take action on numerous other rulemakings that do not have a Congressional deadline before it turns to Section 1504.”
Oxfam America is joined by members of Congress, investors with more than $5.6 trillion in assets under management, and civil society groups asking the SEC to promptly issue a new rule.
In the past year, a global standard for payment transparency has emerged “that makes the SEC’s job easier and shows government and investor interest in this data,” Oxfam points out in its statement. The EU and Norway have adopted mandatory disclosure laws that mirror the SEC’s 2012 rules and Canada has committed to passing similar legislation by early next year. In August, the United Kingdom published draft regulations to implement EU disclosure laws by the end of this year. By 2016, the EU requirements will be in effect in all 28 EU member states. Some companies already voluntarily disclose this information, providing a valuable source of information for governments and citizens to fight corruption, inefficiency and waste.
Numerous SEC-listed extractive companies, such as Royal Dutch Shell, BP, BHP Billiton, Rio Tinto, Total, and Statoil are also covered by the European, Norwegian or Canadian regulations and will begin disclosing this information, increasing the incentives for the SEC to adopt rules that align with standards in these markets, Oxfam says. Additional details of the lawsuit will be discussed during a press conference the organization will hold on Sept. 18.