As World Embraces Transparency, SEC a Year Behind

Issue: Dodd-Frank
Country: United States
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Today marks the one-year anniversary of the deadline that Congress set for the U.S. Securities and Exchange Commission (SEC) to issue new disclosure rules for oil, gas and mining companies, as required by Section 1504 of the Dodd-Frank Act—rules that still have not been released.

A lot can happen in a year.

Since last April, a number of legislative and policy reforms in resource-rich countries around the world have shed light on how extractive industries do business.

The Democratic Republic of Congo and Iraq's Kurdistan region both published extractive sector contracts publicly for the first time. Ghana's President John Atta Mills signed a pro-transparency Petroleum Revenue Management bill into law, and Guinea approved a new mining code enshrining competitive, transparent leasing processes for mining. The global influence of the Extractive Industries Transparency Initiative (EITI) continued to grow, as half a dozen new countries, including the United States, announced their intention to implement the initiative. And this week, representatives from fifty-five countries have gathered in Brazil for the annual meeting of the Open Government Partnership, a new global initiative dedicated to government transparency and citizen participation.

This is huge progress. And yet, over the past year, a critical, anticipated milestone for improving transparency and accountability in the oil, gas and mining sectors failed to materialize, as the SEC repeatedly delayed the release of final rules implementing Dodd-Frank's reforms.

Once finalized, these rules will establish a new standard for international transparency by requiring oil, gas and mining companies listed with the SEC to publish what they pay to governments around the world in exchange for access to natural resources, country-by-country and per project. They will help citizens in producing countries to realize the benefits of their natural resource wealth, and aid governments in ensuring that multinational companies pay what they owe for public resources.

But the disclosure rules mandated by Section 1504 can't have any impact until they are implemented—and it's a scandal they are now fully one year overdue. Civil society, government and industry stakeholders have all weighed in on SEC's rulemaking process, and the Commission has had ample time to conduct its own analysis. All that remains is for SEC Chairman Mary Schapiro to set the date for a vote on final rules.

Until then, every passing day represents a missed opportunity for U.S. leadership on natural resource governance—and a violation of Congress's intent to improve oil, gas and mining industry transparency for the benefit of citizens, governments and investors around the world.

Rebecca Morse is RWI's advocacy officer.

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