Lawmakers Say Rule Strays From Congressional Intent, International Standards

During a two-month public comment period on the rule this spring, seventy-four out of eighty-eight submissions recommended the SEC adopt a stronger rule to implement Section 1504, according to the Publish What You Pay coalition, which has been advocating for stronger transparency laws for extractive industries and fighting the SEC’s current version of the rule.

A number of Democratic lawmakers wrote comments in opposition to the new version of the rule, saying it strayed from Congress’s intent in the Dodd-Frank Act and did not have adequate transparency requirements to align with the existing international standards on reporting requirements.

The international body which develops those standards, the Extractive Industries Transparency Initiative, (which the United States exited in 2017), encouraged the SEC to align its reporting requirements with the EITI’s, writing, “In resource-rich countries, transparency of natural resource revenues is critical to ensuring that citizens can hold their governments and the industry to account.”

Meanwhile, the groups that have been working to undermine Section 1504 were pleased with the new rule. The US Chamber of Commerce applauded the SEC’s proposed rule, while the API, the oil industry trade group, expressed support for most aspects of the rule and asked for even looser reporting requirements.

“Though we appreciate that the [SEC] included several provisions in these proposed rules that would make this type of public reporting significantly less problematic, we continue to have concerns that final rules requiring individual companies to disclose publicly their payments to governments would be inconsistent with the commission’s statutory obligations and unnecessary in light of the commission’s alternative (a public compilation),” wrote API vice president for corporate policy Stephen Comstock.

A spokesperson for the Publish What You Pay coalition said in an email that the group expects the rule that the SEC votes on to look substantially similar to the draft proposal.

The coalition’s US director Kathleen Brophy said in a statement: “If SEC Chair Jay Clayton passes a weak rule for Section 1504 that fails to mandate strong public disclosure from the fossil fuel industry, it will be one final giveaway from a corrupt administration to a dying industry.”