Among the numerous concerns addressed by 2010’s Dodd-Frank financial reform bill was the so-called “resource curse,” whereby mineral or fossil fuel-rich countries are unable to transform their wealth into economic growth and development, often falling victim to corruption and poor governance. The final bill included a measure, co-sponsored by Senators Ben Cardin and Richard Lugar, requiring that all oil, gas, and mineral companies on the U.S. stock exchange disclose any payments they make to foreign governments for licenses or permits for development. It aimed to curb bribery and give poor countries rich in resources a chance to hold their governments and resource-extraction companies accountable. After years of delay, on June 27, 2016, the Securities Exchange Commission published a final version of the rule that enforces Cardin-Lugar. It was set to go into effect in 2018.
On Wednesday, the House of Representatives voted to kill that rule and effectively gut Cardin-Lugar using a special authority that allows lawmakers to undo recently passed regulations. The Senate will likely take up a complementary measure in the coming days. It is expected to pass.
In an op-ed in The Wall Street Journal last week, Republican Majority Leader Kevin McCarthy declared that the rule “would put American businesses at a competitive disadvantage”— a position echoed by the American Petroleum Institute (API), the top energy-lobbying group in Washington, and the oil giant ExxonMobil, one of API’s top members. Over the years, ExxonMobil has claimed that Cardin-Lugar, if turned into an enforceable rule by the SEC, would compel the company to disclose private, internal data. That, in turn, would place it a severe competitive disadvantage relative to the BPs and Shells and Rosnefts of the world, the company has argued.