US REGULATORS FEEL PRESSURE TO WEAKEN TRANSPARENCY LAW… AND WHY YOU SHOULD CARE
By Tom Hart
year and a half ago, ONE and our Publish What You Pay Coalition (PWYP) partners asked ONE members to take action by calling your senators to urge them to pass a provision shining a spotlight on payments made between extractive companies and the countries they work in, many in Africa. The bipartisan Cardin-Lugar Amendment passed through Congress and became law!
This new law was designed to help to end the resource curse — the paradoxical condition of scores of countries blessed with abundant natural resources such as oil, timber, precious stones and metals, with most of their citizens living on less than $1.25 a day. This is because dictators, corrupt government leaders and bureaucrats steal and hide, in private foreign bank accounts, billions of dollars received from multi-national companies for drilling and mining these resources.
Cardin-Lugar, also known as Section 1504 of the Dodd-Frank Act would address this problem by requiring all companies listed on the US stock exchange to disclose to the US Securities and Exchange Commission (SEC) their payments to the US and foreign governments for the extraction of oil, gas and minerals, on a country-by-country (and project-level) basis.
If citizens and activists in poor countries can see how much their governments are receiving in payments, they can better hold their leaders accountable for investments in public services health care, schools, roads and clean water. This means more development, more progress towards meeting the Millennium Development Goals, and less need for donor assistance.
So what’s the problem? Well, once a law is passed, rules must be written to specify how the law gets implemented in the real world. Nearly a year and a half later, the rule-writing body for this law –- the SEC –- has failed to produce a rule, under pressure from big oil companies and their lobbyists. What’s worse, draft rules oil lobbyists have been pushing the SEC to make changes would significantly weaken the rule by seeking exemptions and other concessions which may even violate the provisions of the new transparency law.
The American Petroleum Institute (API), the oil industry’s lobbying organization, has even threatened lawsuits against the SEC, demanding that it begin the rule-writing process anew, setting us back a year and half, so that they can get their way. Yesterday, Senator Ben Cardin, D-Md., publicly expressed his disappointment with the SEC and his hope that “…[the SEC] will not be yielding to industry pressure.”
Basically, the SEC is delaying the fight against corruption. Every day millions of dollars continue to leave African shores into big American, European and Caribbean Banks while people continue to suffer from poverty, illiteracy and preventable diseases. Over the next few weeks, ONE and our partners will brief you on the issue and ask you to take lots of actions and make your voice heard to the SEC. We want you to urge the SEC to fulfill their obligation to release rules that follow the mandates of Congress and not the corporate interests of extractive companies and corrupt African leaders. And soon. We need your voice in this fight. Stay tuned.