Republican senators warn of ‘competitive harm’ from oil rule

Two GOP senators are pressing the Securities and Exchange Commission (SEC) to give oil and mining companies leeway in complying with upcoming rules that require disclosure of payments to foreign governments, including a key exemption from the mandate.

A new letter to regulators from Sens. Lisa MurkowskiLisa Ann MurkowskiSenate moderates see influence grow after shutdown fight Winners and losers from the government shutdown Overnight Energy: Trump imposes 30 percent tariffs on solar panels | Zinke to push road through Alaska refuge | Supreme Court rules against Trump in water rule fight MORE (R-Alaska) and John CornynJohn CornynSenate faces difficult path to immigration deal Emboldened conservatives press Ryan to bring hard-right immigration bill to floor Gorsuch has dinner at GOP senator’s home MORE (R-Texas) fuels an increasingly high-profile battle over disclosure requirements in the 2010 Dodd-Frank Wall Street reform law, a fight that has drawn in figures and companies including George Soros, Exxon, Hillary ClintonHillary Diane Rodham ClintonTrump appears to call out Samsung over missing FBI text messages House Judiciary Republican: Comey could be called to testify again Stakes intensify: Mueller seeks to question Trump MORE and Bill Gates.

“While we understand the goal of promoting transparency, we have concerns that the proposed rule does not protect U.S. companies, investors and employees from unnecessary competitive harm,” the senators write in a Feb. 28 letter posted Wednesday on the SEC’s website.

The SEC is preparing to finalize rules that require U.S.-listed oil and mining companies to report payments to governments related to projects in their countries, such as money paid for production licenses, taxes, royalties and other outlays.

In the letter, which echoes industry concerns, Cornyn and Murkowski press the SEC to allow companies to employ a broad definition of “project” in their reports to the regulators.

“We are troubled that the current definition of ‘project’ in the commission’s rule could result in U.S.-listed companies disclosing information that would allow foreign, state-owned companies to gain an unfair competitive advantage for operations in the host country,” the letter states.

It calls for a definition that allows companies to aggregate payment data from multiple agreements in a given country, province or basin.

The letter also urges the SEC to allow exemptions from the rules for operations in countries that bar such disclosure.

The senators warn that absent the exemption, U.S.-listed companies could be forced to shut down operations, “resulting in significant financial harm to the companies, investors and U.S. employees.” Murkowski is the top Republican on the Senate Energy and Natural Resources Committee.

The SEC is crafting the rules under a provision in the Dodd-Frank law itself crafted by Sens. Dick Lugar (R-Ind.) and Ben CardinBenjamin (Ben) Louis CardinLive coverage: Congress votes to end government shutdown Senate Dem: ‘You can’t operate with continuing resolutions’ WHIP LIST: Shutdown looms as Senate lacks votes to pass House spending bill MORE (D-Md.).

The rule is aimed at reversing the “resource curse,” in which some countries in Africa and elsewhere are plagued by high levels of corruption, conflict and poverty despite their energy and mineral resources.

Greater disclosure, advocates argue, will help ensure that revenues from energy development and mining provide public benefit.

Oil companies such as Exxon Mobil and ConocoPhillips say they support transparency, but argue that without leeway, the rules could provide an unfair advantage to state-owned or state-controlled Russian and Chinese energy companies that aren’t bound by the requirements.

The powerful American Petroleum Institute is pushing the SEC to pull back and re-propose the rule, arguing it lacks adequate economic analysis.

But human-rights and anti-poverty groups such as Oxfam America, Global Witness and the Publish What You Pay coalition say the oil industry is lobbying for provisions that would gut the requirements. Billionaire philanthropists George Soros and Bill Gates have jumped in on the side of the groups.

Earlier this week, Secretary of State Hillary Clinton said the SEC should “go as far as possible” with the rules, while a number of senior House Democrats in February warned the SEC against issuing a "watered-down" rule.