Home' Trinidad and Tobago Guardian : February 9th 2017 Contents FEBRUARY 9 • 2017 guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
Oil, gas and mining company
disclosure under threat by Trump
Last Friday the US Senate voted to repeal
a Security Exchange Commission (SEC)
rule that would have required oil and
gas and mining companies to disclose
each year all of their payments to for-
eign governments for exploration and
production rights, permits, taxes, and other things.
The House passed the bill earlier last week. It now
goes to US President Donald Trump for his signature.
The disclosure rule was set to go into effect in 2018.
It was first adopted by the SEC in August 2012 under
the Dodd-Frank Act and finalised in late June 2016.
Lawmakers used the Congressional Review Act to
repeal the disclosure rule. That law allows a simple
majority in Congress to repeal rules finalised in the
past 60 legislative days. The SEC's approval of the
final version of the extractive disclosure rule fell
within the 60-day legislative deadline.
Anti-corruption activists had said payments to
foreign governments were often bribes in disguise.
They said the disclosure rule would help opposition
politicians and local NGOs hold regimes accounta-
ble. Business groups had argued that the law would
stigmatise US companies for making legal payments
to foreign governments and reduce their ability to
The Foreign Corrupt Practices Act doesn't prohibit
payments to foreign governments. It outlaws corrupt
payments made directly or indirectly to foreign offi-
cials, political parties, or other covered organisations
to win or keep business.
Repealing the SEC extractive industries disclosure
rule won't change the FCPA anti-bribery provisions
or the books and records and internal controls pro-
visions of the FCPA that the SEC enforces.
Nearly all natural resource deals involve foreign
governments, which typically control their country's
resources directly or through state-owned enter-
prises. Energy companies, for example, usually pay
foreign governments for the right to explore for oil
and gas, and then they pay royalties on the eventual
production. Those payments, as well as taxes and
other fees, would have been disclosed each year under
the SEC rule.
In mid 2013, a federal judge in DC threw out the
first version of the SEC's extractive industries dis-
closure rule. Judge John Bates said the SEC's refusal
to allow any exemptions to companies was "arbitrary
The US Chamber of Commerce and other busi-
ness groups had asked the SEC to allow companies
to privately disclose the payment data to regulators,
and to protect commercial interests by limiting pub-
lic disclosures to a more general compilation of the
After the federal court ruling, the SEC rewrote the
rule to allow reporting companies to pursue case-
by-case exemptions for commercially sensitive
information or to comply with foreign laws against
disclosing resource extraction-related payments
to those countries' governments. The first disclo-
sures under the finalised rule would have been due
in September 2018. Covered companies would have
been required each year to disclose the type and total
amount of payments made on a project-by-project
and country-by-country basis.
Even after repeal of the US rule, many SEC-re-
porting oil and gas and mining companies will still
have to disclose payments to foreign governments
under rules in place in Europe and Canada. In April
2013, the European Union adopted a disclosure rule
largely mirroring the SEC rule.
The EU action directed member countries to require
oil and gas, mining, and logging companies to report
all payments to governments of €100,000 or more.
The SEC and EU rules were pushed by a coalition of
NGOs that included Christian Aid, Global Financial
Integrity, Global Witness, and Transparency Inter-
Last week, Jana Morgan, director of the
US chapter of the Publish What You Pay
coalition, told Sam Rubenfeld of the Wall
Street Journal that repealing the SEC rule
sent "a very disturbing message" about
House Republicans' commitment to fight-
"Why are Republicans prioritising void-
ing an anti-corruption rule that has been
adopted in 30 other countries around the
world when the message the Trump admin-
istration ran on was one of 'draining the
swamp'?" she said. The SEC commissioners
adopted the original extractive industries
disclosure rule in 2012 on a 2-1 vote (there
were two recusals).
A statement published last week by Global
Witness called the extractive resources dis-
closure rule "a key part of US efforts to curb
the corruption that keeps poor countries
poor and threatens US national interests
and global security around the world."
Simon Taylor, a co-founding director of
Global Witness, said in the statement that
repealing the rule was a "pro-corruption"
move by the Trump administration and the
Republican-controlled Congress and "a sign
that not only do they think corruption is
perfectly acceptable but that they intend to
become pro-active enablers of corruption."
Courtesy: FCPA Blog Daily Newsletter
(Richard L Cassin.
Submitted by T&T EITI Secretariat
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