NEW YORK, 14 February 2012—As the Securities and Exchange Commission readies new disclosure rules for the oil and mining industries, prominent philanthropists, investors and leading members of Congress have called on the commission to make the transparency rules "strong and robust" to benefit citizens of resource-rich countries.
The latest formal submission (pdf) came from Bill Gates. "Such rules would be consistent with emerging international norms and practices, and help reinforce a competitive and level playing field for U.S. corporations and foreign companies," Mr. Gates wrote today to the SEC. "It would produce real benefits for the citizens of the countries where the investments take place."
The SEC is finalizing rules carrying out a new law requiring oil, gas and mining companies to make public the payments they make to governments. If the final rules reflect the law's requirement that companies disclose the payments they make country by country and for each project, citizens and investors will have a new tool for holding companies and governments accountable for their actions. The Revenue Watch Institute pressed for the measure in Congress and has urged the SEC to act promptly.
"Mr. Gates and others want leaders to recognize that better management of revenues from oil and mining can help some of the world's neediest countries finance their own development," said Karin Lissakers, director of Revenue Watch. "Revenue Watch is extremely pleased that they are emphasizing the need for companies to make public detailed information about payments."
The law, known as Section 1504 or the "Cardin-Lugar" provision of the Dodd-Frank Act, requires oil, gas and mining companies to disclose payments they make to host governments. The SEC has delayed releasing its final rules nearly a year beyond the deadline set by Congress.
"I feel it is critical to ensure the final rules for this provision are strong and robust and in keeping with the intentions of Congress," Mr. Gates said in his letter to the SEC.
In an earlier formal comment to the SEC, George Soros, founder of the Open Society Foundations, a Revenue Watch funder, urged the commission not to permit exceptions to the reporting rules. Bono, the singer and anti-poverty campaigner, has cited companies' public disclosure of payments to governments as a way to spur investment in jobs, health and education.
In a submission to the SEC, four senators including one of the chief sponsors of the law urged the SEC not to delay action. "Section 1504 is critical to providing information of great value to investors as they assess the commercial, political and reputational risk faced by companies in often volatile locations," said the letter. It was signed by Senator Ben Cardin, a co-author of the provision, and Sens. Charles Schumer, John Kerry and Carl Levin.
"In addition, the greater transparency will discourage corruption, reduce conflict and enhance stability, secure energy supplies, and ensure a more predictable operating environment for extractive companies. Indeed, investors with over $1 trillion in assets under management wrote to the SEC in support of strong rules," their letter said.
The movement for greater transparency in energy and mining extends beyond the United States. The European Council recently proposed payment disclosures similar to those in Section 1504. The European Parliament and European Council are currently debating the proposal.
LEARN MORE
- Letter from Bill Gates (pdf)
- Bill Gates Joins Push for Strong SEC Rule on Extractive Industries (Main Justice)
- Bill Gates Jumps into Fray Over SEC Oil Transparency Rule (The Hill)
- Take Action on EU Transparency Law
- Promote Transparency: End the Secret Payments in Oil and Mining Industries (Oxfam America)
- Comments on Proposed Rule: Disclosure of Payments by Resource Extraction Issuers (U.S. Securities and Exchange Commission)
