SEC nixes Big Oil, US Chamber push to delay disclosure rule

The Securities and Exchange Commission (SEC) has rejected industry groups’ request to freeze mandates that force oil and mining companies to disclose payments to foreign governments.

The American Petroleum Institute, U.S. Chamber of Commerce and other groups had urged the SEC to stay the requirements while the groups’ litigation against the rules plays out.

But on Thursday the SEC said there’s no reason for a stay. The regulators said in an order that the groups “failed to carry their burden to demonstrate imminent, irreparable harm.”

The SEC notes that the federal court hearing the case ordered a quick briefing schedule, making a decision likely as soon as next spring — almost a year before companies’ first disclosure filings are due.

The SEC rejected claims that initial compliance costs would be burdensome. Claims of competitive harm are too speculative to warrant a stay, the SEC said.

The order is the latest move in a long-running battle over rules required under the 2010 Dodd-Frank financial reform law.

The rules, finalized in August, force SEC-listed oil, natural gas and mining companies to reveal payments to governments related to projects in their countries, such as money for production licenses, taxes, royalties and other aspects of energy and mineral projects.

The rules are aimed at increasing transparency to help undo the “resource curse,” in which impoverished countries in Africa and elsewhere are plagued by high levels of corruption and conflict alongside their energy and mineral wealth.

But the rules have faced legal, administrative and political pushback from trade groups and individual companies, including ExxonMobil, Chevron and Shell.

The oil industry argues the rule will put SEC-listed companies at a big disadvantage when competing abroad against state-owned companies such as Russia’s Gazprom and the China National Petroleum Co.

Industry officials say they support transparency too, but that the SEC rules go too far.

The industry favors disclosure carried out under the Extractive Industries Transparency Initiative, a voluntary, multilateral group that brings together energy-producing nations, companies and civil society organizations.

Human rights and transparency advocates cheered the SEC for rejecting the stay request.

“This is a victory for anyone who cares about fighting poverty, protecting investors, making markets more efficient, or reducing corruption,” said Raymond Baker, director of the group Global Financial Integrity.

The American Petroleum Institute bashed the SEC rule after the stay was denied.

“We’ve been working hard to increase transparency for a decade, but this rule could interfere with ongoing efforts by making U.S. firms less competitive against state owned firms in China and Russia that have no interest in transparency,” said Justin Spickard, the group’s director of federal relations.

This post was updated at 4:03 p.m.