Home' Trinidad and Tobago Guardian : February 23rd 2017 Contents Donald Trump assumed the pres-
idency of the USA on January
In week 3, action taken by
the US Congress sent ripples
through the world of the Ex-
tractive Industries Transparency Initiative (EITI).
The House of Representatives and Senate
voted to repeal the US Securities and Exchange
Commission (SEC) "Disclosure of Payments by
Resource Extraction Issuers" rule that required
SEC registered oil, gas, and mining companies to
disclose payments in excess of US$100,000.00
made to foreign governments for the exploitation
of their natural resources.
In week 4, President Trump signed a bill to
repeal the rule.
The effect on T&T of the repeal is that citizens
will no longer be assured of being privy to disclo-
sures of revenue payments by all SEC registered
companies to our government in exchange for
contracts and licences awarded for the extraction
of our oil and gas resources.
It is well known that energy sector revenues
form the main source of income to T&T's Treas-
ury and is the backbone of the nation's econ-
omy, therefore, any loss of disclosures is to be
While our EITI Reports will continue to dis-
close information on payments by most of the
companies, derived from other sources, none-
theless, the repeal removes the USA as an key
source of our information on revenues earned
from the people's assets and also removes a major
disincentive to corruption in the energy sector.
The repeal will impact EITI implementation in
T&T negatively because the essence of the initia-
tive is to bring transparency and accountability to
our extractive sectors by disclosures in our annual
EITI Reports (www.tteiti.org.tt/eiti-reports) of
payments made by companies to government,
independently audited and reconciled with cor-
responding government declared receipts.
The repeal of the SEC rule could reduce the
ease with which we get needed revenue payments
disclosures from US-based companies because
they could cite the abolition of the rule as a reason
not to comply.
However, this is unlikely to happen because
most responsible companies now accept that
the practice of transparency is good for business.
According to Congressional Republicans and
persons operating in the US oil and gas industries,
the Dodd-Frank Act 2010, Section 1504, that gave
rise to the SEC rule on disclosure, created un-
acceptable burdens and put US companies at a
disadvantage to their foreign competitors.
That argument ignored the main purpose of
the Act that was promoted by President Obama as
a key element in the USA's leadership in fighting
corruption around the world. President Obama
argued that, because large-scale corruption was
a driver of insecurity, conflict and terrorism, the
SEC rule made the USA a safer country.
President Obama also argued that resource-rich
underdeveloped and developing countries (like
T&T) often had weak institutions incapable of
fully enforcing the rule of law.
That weakness, he suggested, could facilitate
undisclosed payments to governments by foreign
companies being diverted into the pockets of a
small corrupt clique instead of creating nation-
al development and providing basic services to
The introduction of greater transparency and
accountability to the extractive industries means
that the giver and the taker of bribes will have a
harder time hiding illicit payments and receipts
and may think twice before engaging in corrupt
Thus, instead of enriching a few, the many cit-
izens who own the country's natural resources
would be the beneficiaries of the revenues gener-
ated and received. Also, the people's patrimony
and our children's inheritance will be protected.
The obvious benefits notwithstanding, persons
opposed to greater transparency and accountabil-
ity in the extractive sectors challenged the Dodd-
Frank Act from the outset and the resulting SEC
rule. Leading the attack among associations in
2012 were The American Petroleum Institute and
The US Chamber of Commerce that challenged
the SEC rule in US Court on First Amendment
The leader among company challengers was
ExxonMobil Corporation, then led by CEO Rex
Tillerson, now Trump's US Secretary of State,
who fought the act and SEC rule tooth and nail.
In 2013, the Washington DC District Court de-
clined to judge on the First Amendment challenge
but vacated the SEC rule on procedural grounds.
After much consultation, the SEC rewrote the
rule in 2016 making it more company-friendly.
Supporters saw the revised SEC rule as a com-
mon-sense way to counter corruption and abuse.
It granted citizens information, the most basic
tool needed for holding their governments ac-
countable. It did not limit or restrict to whom,
how much, or for what purposes companies could
However, the extractive sectors' lobby against
transparency was not satisfied and continued
their opposition leading to this repeal under the
Lucky for T&T, the setback that EITI imple-
mentation will suffer from the actions of the
Trump Administration will be limited and thus
The Dodd-Frank Act in its early years gave birth
to similar legislation elsewhere and, as a result,
the leading international energy companies
operating in T&T, eg BP, Royal Dutch Shell and
BG18 | COMMENTARY
BUSINESS GUARDIAN guardian.co.tt FEBRUARY 23 • 2017
EITI and Donald Trump
BHP Billiton, are already complying with
similar disclosure rules in all 28 countries of
the European Union, Norway and Canada.
Those companies are among approxi-
mately 50 companies that have supported
EITI implementation in T&T over the last six
years, participating voluntarily and allocat-
ing resources to the reporting process. We
are confident of their continued support and
disclosure of government revenue payments
to the steering committee-appointed EITI
administrator for inclusion in future EITI
reports to the continuing benefit of citizens.
Many observers are surprised that the
Trump administration has given such pri-
ority to undoing the Dodd-Frank Act and the
SEC rule, within the first month of assuming
office, and wondered why the urgency.
Some suggested that, in addition to well
publicised conflict of interest issues facing
the Trump Administration, this action lent
support to the perception that the admin-
istration was soft on corruption.
Also, with its America First policy, it
was perhaps less caring than the previous
administration about the impact of its ac-
tions on people from underdeveloped and
Transparency International's Corruption
Perception Index 2016 last month ranked
USA at 18 of 176 countries, well below the
leaders of the G7 Group (Canada -- 9, UK
-10 and Germany -10). It may not be un-
reasonable, therefore, to expect that, with
the pattern that has been emerging since 20
January, the USA might well share T&T's
experience of sliding downwards on future
Time will tell.
Victor Hart is chair of the TTEITI Steering
Committee and member EITI International
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