At long last, the Securities and Exchange Commission (SEC) has published the rule requiring extractive industry investors—oil, gas, and mining companies—to publish all payments of $100,000 or more that they make to governments as part of their operations. The rule’s long history can be traced back to Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a measure signed into law in July 2010.
Section 1504, also known as the Cardin-Lugar Amendment after its Senate champions, sought to increase transparency in the extractive industry in order to, in the SEC’s words, “help combat global corruption and empower citizens of resource-rich countries to hold their governments accountable for the wealth generated by those resources.” CGD bestowed its 2010 Commitment to Development “Ideas in Action” Award to Publish What You Pay – United States for the coalition’s work in helping get the provision signed into law and has continued to push for its implementation as a means of supporting good governance.
Unfortunately, implementation of the provision was delayed after a District Court vacated the original SEC rule in 2013. For more on that saga and how the SEC addressed the findings in the case, visit my blog post from January. Since 2010, when the provision was authored, a number of other jurisdictions, including the European Union and Canada, have adopted policies mandating greater transparency in natural resource extraction. To ease the burden and avoid duplicative reporting requirements, the SEC will allow extractive companies required to file in the United States to submit the disclosures they prepare for other countries if the information is deemed substantially equivalent.
Under the rule, firms do not have to file the required information prior to the 2018 fiscal year. The SEC noted that the extended compliance date will provide plenty of time for companies to establish necessary procedures, address potential legal barriers, or seek exemption; though a number of transparency advocates lamented the further delay. Nonetheless, great congratulations are in order to all those, including Oxfam and Publish What You Pay – US, who have worked so hard to get this rule published!