WASHINGTON, May 27 (Thomson Reuters Foundation) - The U.S.
Securities and Exchange Commission plans to complete by March
next year its second attempt at writing new rules for oil, gas
and mining companies to disclose what they pay governments for
their natural resources.
Its first attempt was thrown out last July by a U.S.
District Court, which ruled in support of businesses that the
SEC had failed to justify why companies must publicly disclose
so much information on royalties, leases and other payments.
The new timetable was included in the SEC's latest update
to its priorities for the year ahead. It would bring the United
States roughly into line with the European Union states, which
must introduce their disclosure rules for extractive industries
by July 2015.
Human rights and groups that advocate corporate transparency
are pressing hard for more disclosure by oil, gas and mining
companies on what they pay governments as a way to combat
corruption in resource-rich countries.
Oil companies have argued against the mandatory disclosure
rules, required under Section 1504 of the 2010 Dodd-Frank U.S.
financial reform act. Instead they prefer voluntary agreements
In the United States, the American Petroleum Institute and
the U.S. Chamber of Commerce filed a lawsuit in 2012 to block
the implementation of the SEC rules, saying they would cost
billions of dollars, violate contract terms in some countries
and be anti-competitive.
A court partially agreed and sent the SEC rules back for a
rewrite, saying the agency had misread the statute by requiring
companies to publish detailed payments broken down by project.
The court also said the SEC failed to adequately explain why it
did not allow for exemptions in cases where a government forbade
disclosing the contents of a contract.
The SEC now must try again. The oil industry has proposed
that SEC aggregate their filings into a report, while human
rights groups say that the global trend is clearly for more
detailed disclosure, so the SEC should re-issue its original
rule with a few tweaks and better explanations.
"We want a rule as soon as possible but it needs to be the
right rule and in line with the laws passed in the EU and Norway
over the last year," said Joseph Williams, a senior officer at
Revenue Watch Institute, a resource disclosure organization.
"This will give citizens and investors the information they
need, but will also provide a level playing field for companies
in different jurisdictions," he said.
(Reporting By Stella Dawson; Editing by Ken Wills)