Oil companies are seizing on a White House executive order that promotes international regulatory harmony to seek an exemption from upcoming federal rules that would force energy producers to disclose payments to foreign governments.
The American Petroleum Institute (API) cites the May 1 order in a new letter to the Securities and Exchange Commission, arguing it backs up the industry's long push for exemptions from the pending SEC rules if countries where projects are located bar the disclosure.
“If the Commission were to issue a final rule that requires reporting even when it conflicts with foreign laws, such a rule would cause exactly the type of unnecessary competitive harm that the Executive Order seeks to avoid,” states the May 18 letter from the powerful industry trade group to the SEC.
Obama's executive order seeks to better align U.S. regulations with other nations to reduce unnecessary costs to business. The White House cast the order as a way to increase trade and job creation while maintaining needed health and safety protections.
Business groups cheered the order, while left-leaning groups panned it, warning it will become a stalking horse for efforts to curb environmental rules and worker protections.
The oil industry letter adds a new wrinkle to the behind-the-scenes battle that’s raging over the SEC disclosure rules, which were floated in draft form in late 2010 and are required under the 2010 Dodd-Frank financial reform law.
Click here, here and here for recent E2 coverage of the fight over the rules.
The law requires the SEC to issue regulations that force SEC-listed oil, gas and mining companies to reveal — in filings with U.S. regulators — payments to foreign governments for production licenses, taxes, royalties and other aspects of energy and mineral projects.
The provision is aimed at increasing transparency to help undo the “resource curse,” in which some impoverished countries in Africa and elsewhere are plagued by high levels of corruption and conflict alongside their energy and mineral wealth.
Oil companies battling the SEC rules say they support disclosure.
But in a series of meetings and letters to the SEC, they have argued that unless the rule is crafted with plenty of leeway and exemptions, it will place SEC-listed companies at a disadvantage when competing against state-backed Russian and Chinese firms that aren’t bound by the mandates.
Supporters of the Dodd-Frank provision say that adopting the various carve-outs that the oil industry is seeking will gut the law’s intent.
Sen. Ben CardinBen CardinAide: Trump invited Philippine leader to WH Dem senator: Hold hearing on Russian interference in election Overnight Finance: Questions swirl around Trump's plan for his business | Treasury pick promises major tax cut | White House downplays Carrier deal MORE (D-Md.), joining human rights groups, has argued specifically against granting exemptions if a foreign government bars the disclosure.
“[A]ny exemptions, including exceptions for conflicting host country laws, would not only encourage other countries to enact laws reducing transparency and start a ‘race to the bottom,’ but would also create a dangerous precedent, by making the U.S. lawmaking process subservient to governments around the world, including dictators who do not share our commitment to transparency, good governance, and the rule of law,” states a Jan. 31 letter to the SEC from Cardin and four other Democratic senators.
Cardin authored the Dodd-Frank provision with Sen. Dick Lugar (R-Ind.).