US Congress undoes Dodd-Frank regulations on extractive industry revenue transparency

Oil companies that support revenue transparency

Congressional leaders in early 2017 said they would use the US Congressional Review Act, allowing quick legislative repeal of regulations recently issued by the Executive branch, to reverse regulatory and executive actions from the last seven months of the Obama Administration.  As a priority, Congress targeted for repeal regulations finalised in June 2016 by the Securities & Exchange Commission under section 1504 of the Dodd-Frank financial reform act.  These regulations require oil, gas and mining firms to disclose their payments to foreign governments.  A wide range of NGOs opposed the repeal, arguing that it will foster corruption by enabling companies and governments to hide these payments, including to repressive governments such as Angola, Equatorial Guinea and Kazkhstan; and that companies listed on stock markets in other countries including the EU and Canada are already subject to very similar requirements.  Both houses of Congress passed legislation to undo these regulations in the week of 30 January 2017.

Business & Human Rights Resource Centre has invited 30 companies to respond to an open letter by Publish What You Pay coalitions and several of their member NGOs on this issue.  The letter urges the companies to issue statements in defence of the SEC regulations and against the Congressional bill to undo the regulations.  The letter, related materials, and company responses and non-responses available here.  See additional materials on opposition to the repeal and the importance of these rules here.

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31 January 2017

Urgent: Rule On Extractive Transparency At Risk in the Senate!

Author: Amnesty International USA

Representative Bill Huizenga (R-MI) is gathering support from his fellow Republicans to gut one of the signature bi-partisan anti-corruption laws passed in the last 8 years...which requires oil and mining companies to publish the payments they make to governments around the world... The Dodd-Frank transparency measure was passed to ensure people in low and lower income countries can follow the money and to break the "resource curse", which has plagued low and lower income countries like Indonesia, Nigeria, Angola, Equatorial Guinea and more... The [effort] to limit Section 1504...comes the same week that the former CEO of Exxon Mobil Rex Tillerson, a vocal opponent..., is expected to be confirmed by the Senate as the next Secretary of State. Exxon has spent millions, along with the American Petroleum Institute, to try to block this rule... Tell Congress to stand up to corruption and for human rights and vote NO!

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Article
30 January 2017

Human Rights Watch condemns congressional resolution to invalidate extractives transparency regulation

Author: Human Rights Watch

“United States: Don’t Cancel Oil Transparency Rule. Congressional Resolution Would Help Shield Corruption”, 30 January 2017

Republicans introduced joint resolutions in the US Senate and House of Representatives today that would gut efforts to carry out a key law for fighting corruption in resource-rich countries…The House…is expected to vote on the measure as soon as…February 1…The Cardin-Lugar Transparency Rule requires US-listed oil, gas and mining companies to publicly disclose what they pay governments for natural resources production in those countries. It represents the culmination of a…years-long rulemaking process to carry out the anti-corruption provisions of the Dodd-Frank financial reform law. Its repeal would for all practical purposes gut that section of the law. The proposed resolution would nullify the rule by using the Congressional Review Act…Governments in many countries have misused natural resource revenues, contributing to massive corruption, conflict, and human rights abuses. The rule…was meant to inject transparency into the system by ensuring that companies disclose what they pay governments…

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Article
26 January 2017

Civil society orgs. call on US State Department to ensure transparency & accountability in extractives sector

Author: Publish What You Pay

…Publish What You Pay is a global civil society coalition that works for a more open and accountable oil, gas, and mining sector…One of [the] core objectives is to ensure that citizens are able to follow the money paid by oil, gas, and mining companies to governments in order to fight corruption…The United States’ commitment to promote democracy and protect human rights…is a fundamental contribution to our common battle…Last month, PWYP launched a report with CIVICUS, the Global Alliance for Citizen Participation, that documents the disturbing increase in sometimes lethal risks facing citizens that tackle corruption and injustice in the oil, gas, and mining sectors…Now is the time when the United States government is needed…to defend civil society activists when they exercise their freedom of speech, and their right to fight oil, gas, and mining corruption…Equally important is US leadership in global efforts to counter corruption…by vigorously promoting transparency efforts…

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Article
26 January 2017

Civil society orgs. urge UK Prime Minister to advocate for keeping Dodd-Frank extractives transparency regulation

Author: Publish What You Pay

"Threat to United States extractive industry mandatory reporting law", 25 January 2017

…In light of…your Government’s strong anti-corruption commitments, we must alert you to a threat under the Congressional Review Act (CRA) to mandatory reporting in the United States. Certain US legislators are seeking to use the CRA to void the Cardin-Lugar anti-corruption rule (Dodd-Frank Act 2010, Section 1504), which requires oil, gas and mining companies publicly listed in the USA to publish their payments to governments. The first year of mandatory extractive company reporting in the United Kingdom…has been a real success. Similar laws exist throughout the European Union and in Canada and Norway, as well as in the USA. It would be a serious setback for global efforts to achieve greater transparency and accountability in the extractive industries…if mandatory reporting legislation in the US were to be rolled back. We urge you…to do everything possible to persuade your US counterparts and American legislators to ensure that the Cardin-Lugar anti-corruption rule…remains intact…

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Article
26 January 2017

FACT Coalition urges US Congress to keep anti-corruption provisions of Dodd-Frank Act

Author: Financial Accountability & Corporate Transparency Coalition

“Letter to House Urging Lawmakers to Oppose Efforts to Overturn the Bipartisan Cardin-Lugar Anti-Corruption Measure”, 26 January 2017

We are writing…to urge you to oppose any effort to overturn the implementing rules of the bipartisan Cardin-Lugar anti-corruption provisions (Section 1504) of the Wall Street Reform and Consumer Protection Act of 2010…It’s inaccurate to suggest that the implementing rules promulgated by the SEC…put U.S. companies at a competitive disadvantage. 30 other countries…have instituted the same disclosure requirements on extractive companies. This means that over 90 percent of internationally operating companies in the extractives sector are covered by these transparency measures. And, there are already reports coming out…from BP, Shell, and BHP Billiton—among other major multinational oil and gas companies. Despite this, no European company has suffered any disadvantage as a result of disclosures it has made. Moreover, it’s estimated that Cardin-Lugar would result in negligible compliance costs for American Businesses…We would strongly urge you to consider ways to strengthen anti-corruption measures rather than weaken this important safeguard…

[Also refers to Tullow Oil]

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Article
26 January 2017

This Move By The US Congress Is Good For Exxon, Bad For Everyone Else

Author: Elisa Peter, Executive Director of Publish What You Pay, in Huffington Post (USA)

One of President Trump’s best tools to “drain the swamp” is under threat from his own side.... Republican Congress members began attacking a key piece of anti-corruption legislation. This rule, the Cardin-Lugar provision (also known as Section 1504 of the Dodd-Frank Act), was a bipartisan effort to shield US citizens and shareholders from millions of their dollars vanishing to foreign oligarchs in the oil, gas and mining sector... The “swamp” — a handful of lobbyists, executives and contractors who feed off such business ties — has attacked it for years... United States leadership inspired similar legislation in the EU, oil-rich Norway, Canada and beyond. In total, governments enacted similar provisions in over 30 countries.  Today these measures apply to 80 percent of the world’s largest publicly listed oil, gas and mining companies, including state-owned companies from Russia, China and Brazil. This is a win-win for resource-rich countries too: citizens from Indonesia to Zimbabwe are using these transparency laws to keep track of the funds their governments receive and ensure that oil, gas and mining revenues don’t simply vanish into private accounts held offshore, but rather contribute to shared economic growth... Yet a handful of oil companies seeking to keep their business dealings secret continued to oppose the law. Leading this opposition was one company, Exxon Mobil, hiding behind an oil lobbying group called the American Petroleum Institute (API).

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