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Sep 06, 2015

US court gives SEC 30 days to file plan to pass extractive payments rule

Rule forcing oil, gas and mining companies to disclose payments to foreign governments is four years overdue

A US court has ordered the SEC to speed up its creation of a final rule obliging oil, gas and mining companies to disclose payments made to foreign governments after Oxfam America complained legally about the commission’s years of delays.

The US District Court for the District of Massachusetts gave the SEC 30 days to file an ‘expedited schedule’ for passage of a final rule that would force oil, gas and mining companies to disclose how much they pay foreign governments, including taxes, royalties and other payments, to operate in their countries.

‘The SEC is now more than four years past the deadline set by Congress for the promulgation of the final disclosure rule,’ Judge Denise Casper writes in her decision. ‘The SEC’s delay in promulgating the final extraction payments disclosure rule can be considered unlawfully withheld as the duty to promulgate a final extraction payments disclosure rule remains unfulfilled more than four years past Congress’ deadline.’

The case was brought to the court by Oxfam America, which has been pressing the SEC to speed up passage of the ruling required by the Dodd-Frank Wall Street Reform and Consumer Pprotection Act 2010. A version of the extractive payments disclosure rule was passed in 2012 but was rejected the following year as ‘arbitrary’ by the judge in a lawsuit filed by the US Chamber of Commerce and the American Petroleum Institute.

The SEC said after the 2013 court ruling that it would create a new rule but has not done so.

‘Final rules for this essential section of Dodd-Frank will help the US to catch up with Canada, Norway and the 28 members of the European Union that followed the US model and now require the same type of disclosure,’ Oxfam America says in a press release reacting to the court decision. ‘More than 1,100 companies listed on US stock exchanges, including the world’s largest internationally operating oil and mining companies in the world, are covered by the law.’