The business groups allege the rules will create costly burdens, violate companies’ First Amendment rights and place companies listed on U.S. exchanges at a disadvantage when competing overseas against Russian and Chinese companies that aren’t bound by the mandate.
The disclosure rule will force SEC-listed oil, natural-gas and mining companies to reveal payments to governments (including the U.S.) related to projects in their countries, such as money for production licenses, taxes, royalties and other aspects of energy and mineral projects.
It’s 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.
Advocates of the rule are circulating the Statoil letter.
“We are encouraged to see a major oil company with global operations in such places as Angola, China and the United States refusing to support a lawsuit based on unsubstantiated claims,” said Ian Gary, senior policy manager of Oxfam America’s oil, gas and mining program, in a statement.
Statoil has emphasized its support for transparency but has also expressed some concerns about the SEC rule that are, in some cases, aligned with other companies and industry groups that have challenged the measure aggressively.
In 2011 comments to the SEC (available here) when the rule was under development, Statoil called, for instance, for provisions that would allow exemptions from reporting payments if they aren’t allowed in a country where a company is operating.
The final rule did not provide such an exemption. Opponents have argued that such provisions would allow a “tyrant’s veto” of the rules by foreign governments.
“Although Statoil has expressed its concerns about elements of the 1504 law, the fact that an incredibly profitable company like Statoil chose to communicate their views about the law through regular fora, rather than a lawsuit, raises serious questions about claims being made by API,” said Isabel Munilla of the Publish What You Pay coalition.
This post was updated at 9:47 a.m. on February 9