The November deadline demanded by Oxfam America for a final rule requiring oil, gas, and mining companies to disclose payments made to governments for the extraction of natural resources is “unachievable,” the Securities Exchange Commission says in a brief filed last week in U.S. District Court for the District of Massachusetts
In September 2014 Oxfam America, an international relief and development organization, sued the SEC for, in its words, “unlawfully withholding” the final rule, required by Section 1504 of the Dodd-Frank Act. 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 the first time, in a separate case) over delays, 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 SEC to be redrafted, it has yet to do so.
Arguing that the Commission has “unlawfully withheld” and “unreasonably delayed” the rulemaking, Oxfam America’s latest lawsuit asks the court to require a revised proposed rule by Aug. 1, 2015, allow a 45-day period for public notice and comment, and then have the SEC issue a final rule no later than Nov. 1, 2015.
On Feb. 27, the SEC, on the last day briefs could be filed for the case, argued that Oxfam’s demands should not be enforced. Among its arguments:
“[Because of the Dodd-Frank Act] the volume of Congressionally mandated rulemaking is unprecedented and has required, and continues to require, a correspondingly unprecedented amount of the SEC’s finite resources…Oxfam has identified no supportable basis for interfering with the SEC’s ongoing efforts to comply with its considerable rulemaking and other obligations.”
“Far from establishing any unlawful or unreasonable delay warranting judicial intervention in the assessment of agency priorities and allocation of resources, the facts show that the SEC’s approach to the Section 1504 mandate has been and continues to be reasonable.”
“Any revised rule proposal necessarily requires work to address the issues identified by the District Court [among them that the rule’s compelled speech, in the firm of disclosures, ran afoul of the First Amendment] and will have to be considered by the Commissioners, a majority of whom were not at the SEC during the first rulemaking.”
The SEC asks that the Court not adopt the deadlines requested by Oxfam and “instead allow the Commission to report on its progress in promulgating the proposed rule no later than Oct, 31, 2015, the time by which it expects to consider a revised proposed rule.”
In the brief, the SEC’s Office of the General Counsel describes Oxfam’s timetable, requiring the issuance of proposed rules within 30 days, and final rules just 90 days thereafter, as “unrealistic and unreasonable.” “Once the Commission has issued a new proposed rule, allotting only 90 days for a comment period and to finalize the rules is grossly insufficient…Depending on how much the new rules deviate from the old ones, it may take commenters some time to digest and comment upon the new proposal,” it wrote.