Judge pushes SEC to issue new transparency rule

OREANDA-NEWS. September 07, 2015. A federal court judge has ordered the US Securities and Exchange Commission (SEC) to pick up the pace for revamping its rule requiring oil companies to disclose the payments made to governments around the globe.

US district court judge Denise Casper in Massachusetts yesterday directed the SEC within 30 days to provide an expedited schedule for issuing a new, final rule designed to provide new transparency for oil payments.

The 2010 Dodd-Frank Act requires "resource extraction issuers" to report on payments made to the US and foreign governments. In 2012 the SEC issued a final rule to implement the statute language, requiring companies to report on a project by project basis what they pay governments to develop oil and gas resources.

The oil sector opposed the rule, warning it would jeopardize investment in countries where such disclosures are illegal. Oil industry trade group the American Petroleum Institute (API) led a legal battle to overturn the regulation. And in 2013 the US District Court for the District of Columbia struck down the rule, saying the agency had failed to use its discretion adequately when crafting the regulation.

The SEC began work to rewrite the rule, but progress has been slow. Last year, the SEC notified the White House Office of Management and Budget that it planned to propose a new rule by March 2015. But the agency missed that deadline.

Transparency advocate Oxfam America filed suit to try to force the SEC to promulgate a new rule. Casper ruled the SEC has "unlawfully withheld" agency action but said she had to also consider "the work that is necessary to publish the final rule and how quickly that work can be accomplished."

Oxfam America's senior policy manager for its extractive industries program Ian Gary applauded the ruling. "The task before (chairman) Mary Jo White's SEC is now crystal clear: A rule must be issued urgently."

The SEC said it is reviewing the decision.

API said the SEC can issue rules that meet its "legal obligations to promote transparency while also protecting firms' international competitiveness." The trade group said timely development of a new rule that protects US competitiveness "could be a win-win for payment transparency and jobs."