Oil industry to SEC: Soften disclosure rule

The oil industry’s biggest lobbying group is urging the Securities and Exchange Commission (SEC) to soften rules that force oil and mining companies to disclose payments to foreign governments.

The SEC is rewriting the rules after a federal judge, in response to industry litigation, tossed out an earlier version over the summer.

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In a letter to the SEC Thursday, the American Petroleum Institute (API) says the revised rule should include several provisions that the SEC refused to include in the first go-around.

They include requiring the SEC to keep individual companies’ disclosure reports to the commission out of public view, instead having the SEC make public a “compilation” of the payment information.

The group said this “largely mitigates the risk that company payment data can be used by competitors” to the detriment of companies bound by the reporting mandate.

“This risk remains especially acute since, even with the pendency of similar reporting requirements in the EU and elsewhere, reporting companies still face intense and growing global competition from state-owned oil companies not subject to these requirements,” the letter states.

The SEC is required to write the rules under a provision in the 2010 Dodd-Frank financial reform law.

The Dodd-Frank provision is aimed at easing the “resource curse” in which some impoverished countries in Africa and elsewhere are plagued by corruption and conflict alongside their energy and mineral wealth.

API has for years said that making the specific data public would hand a competitive advantage to Russian and Chinese state-owned companies that aren’t bound by the mandate.

API is also reviving its push for the SEC to waive the disclosure mandate for operations in countries that prevent such reporting.

Transparency advocates and human rights groups have warned against such an exemption, claiming it would create a major loophole that undercuts the Dodd-Frank provision.

But API argues that it’s really not that big a deal.

“API member companies have identified only a very small number of countries where we believe disclosure ... may be prohibited by host country law or require prior host government consent,” the letter states.

“While some commenters have expressed concern that a general conflict of laws exemption would create an incentive for more countries to enact such laws, there is little evidence to support this prediction,” it states.

Click here to read the letter.