WASHINGTON, Sept 18 (Reuters) - A human rights organization sued the U.S. Securities and Exchange Commission on Thursday, saying the agency is “unlawfully” delaying work on a rule that would require oil, gas and mining companies to disclose payments they make to foreign governments.
Oxfam America, which has been championing the disclosure rule, said in the suit that the SEC’s failure to complete work on it directly violates a deadline set by Congress.
The group’s complaint, filed in the U.S. District Court for the District of Massachusetts, is focused on a measure required by the 2010 Dodd-Frank Wall Street reform law known as the “resource extraction” rule.
It requires oil, gas and mining companies to disclose how much they pay governments in taxes, royalties and other types of fees for exploration, extraction and other activities.
The resource extraction rule has been the target of litigation numerous times.
Oxfam America also sued the SEC over delays on the rule in 2012.
A few months later, the SEC adopted a final rule. But it then became the legal target of trade groups, including the American Petroleum Institute and the U.S. Chamber of Commerce.
Those groups accused the SEC of failing to conduct a proper analysis of the costs the rule imposed on businesses.
They also said the SEC misinterpreted the law by forcing the public disclosure of detailed payments to governments - a provision that they said could harm companies because such disclosures are illegal in certain countries, such as China and Angola.
A U.S. District judge sided with the groups in July 2013 and tossed out the rule, saying the SEC had misread Dodd-Frank and that its failure to grant exemptions was “arbitrary and capricious.”
The SEC did not appeal the decision, and vowed instead to go back and re-write the rule. The SEC, however, has not yet released a new proposal.
Proponents of the rule, including Oxfam, say it will serve a crucial role in helping to combat corruption and wasteful spending in resource-rich nations. They also note that the SEC is well behind the European Union, which has already adopted its own version of the resource extraction rule.
SEC spokesman John Nester said the agency was reviewing the complaint and did not have a comment.
The rule is one of many listed on the SEC’s near-term rule-making agenda. (Reporting by Sarah N. Lynch; Editing by Dan Grebler)