A federal judge ruled Wednesday that the Securities and Exchange Commission must finally complete a long-delayed rule that would force oil, gas, and mining companies to reveal how much they’re paying governments in countries where they extract resources.
The ruling in favor of Oxfam America is a partial victory for activists who have been dismayed at the SEC’s sluggish pace in writing the regulation, which is required under the 2010 Dodd-Frank law but has been trapped in legal and bureaucratic limbo for years.
But the order stops short of setting a specific timeline that Oxfam had sought in the lawsuit filed last year, instead telling the SEC to provide the court an “expedited schedule” for completing the rule.
It’s the latest twist in a fierce, years-long legal and lobbying battle over the regulations that have pitted anti-poverty groups against some of the world’s biggest oil companies.
The rule is designed to chip away at the "resource curse" of corruption, conflict, and poverty in energy-rich nations in Africa and elsewhere. It would force SEC-listed oil, natural gas, and mining companies to file reports with regulators that disclose payments to governments in nations where they have projects, such as money for production licenses, taxes, royalties, and more.
Major oil companies such as Exxon have sought to weaken requirements, contending that making detailed payment information public will hobble Western companies competing against state-controlled Russian and Chinese firms that aren’t bound by the rule.
But high-profile activists, including George Soros and Bono, have advocated for the measure. Oxfam and a suite of other groups united under the Publish What You Pay coalition say the flexibility that industry wants, such as keeping specific companies’ disclosure filings out of public view, would gut the rule.
The rule has taken far, far longer than the 270-day deadline in the Dodd-Frank law.
“The Court concludes ... that 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’s deadline,” states Wednesday’s order by Judge Denise J. Casper of the U.S. District Court for the District of Massachusetts.
The SEC completed a version of the rule in August 2012, but the American Petroleum Institute, the U.S. Chamber of Commerce, and other groups challenged the measure in court.
A federal judge sided with industry and threw out that version in mid-2013, prompting the SEC to decide to rewrite it. The SEC previously said that the process could drag well into 2016.
“Today’s ruling compels the SEC to move quickly to provide relief to citizens and investors who have been waiting for strong transparency requirements for more than five years. The task before the Mary Jo White’s SEC is now crystal clear: a rule must be issued urgently,” said Ian Gary, senior policy manager of Oxfam America’s extractive industries program.
An SEC spokesman said the agency is reviewing the decision.