SEC tells Oxfam revision of Dodd-Frank rule on mining payments ‘not possible’ yet
The U.S. Securities and Exchange Commission (SEC), current subject of a lawsuit by Oxfam America over mining payments, has told the international relief and development organization it would not be able to propose reforms to the Dodd-Frank rule until next year.
Oxfam sued the SEC in Sep. 2014 for failing to issue a rule requiring energy and mining companies to disclose payments to governments for the extraction of natural resources.
The aid organization has insisted such disclosures would be “a huge boost in the fight against corruption, mismanagement and poverty.”
In response, the SEC said last year it would not address the requested payment disclosure rules until this month. However, now the agency is saying it would not be able to do so until, at least, spring 2016.
“We're surprised and disappointed that the SEC would push back its timeline yet again, in the midst of litigation where the main issue is delay and refusal to commit to anything but the vaguest timelines for action,” Ian Gary, senior policy manager, extractive industries at Oxfam America said in an e-mailed statement.
“The SEC continues to blatantly ignore a deadline that was set by Congress for rules that even the American Petroleum Institute has called for in a timely manner. Investors and industry need regulatory certainty about this rule, especially as similar payment disclosure rules have already become law in the UK, EU and Norway. It’s been almost five years since Dodd-Frank was passed, and the SEC can justify a revised final rule that aligns with the global standard,” Gary added.
The SEC has taken a cautious approach because it has been in legal crosshairs twice already over the disclosure proposal aimed at increasing transparency and fighting corruption.
Oxfam first sued the SEC in 2012 because of the initial delay in proposing the rule, which was required by the 2010 Dodd-Frank financial reform legislation that gave the agency a 270-day deadline. The SEC released payment disclosure rules in August 2012, a few months after the Oxfam lawsuit.
In July 2013 a US District Court struck down the SEC rule, saying it “fundamentally miscalculated the scope of its discretion at critical junctures”, including forcing companies to make the disclosures public when they should be kept private. That forced the commission back to the drawing board.
The Dodd-Frank law seeks to address the so-called “resource curse” whereby wealth generated by mining or drilling is dissipated through waste or corruption.
It also calls for firms to produce an annual report of payments made to a government for commercial development of oil, natural gas or minerals, leaving the precise details of the reporting to SEC rule-making.
Another provision of the Dodd-Frank law connected to U.S. companies’ use of natural resources from foreign countries, the so-called conflict mineral rule, also is the subject of a court battle between the SEC and businesses.