Secretary of State Hillary Clinton on Tuesday called on the Securities and Exchange Commission to “go as far as possible” with rules requiring certain oil, gas and mining companies to disclose payments to host nations.
The rules, which were supposed to be made final in April 2011 but are still under consideration, would require oil, gas and mining companies listed with the SEC to disclose payments to host nations where they extract resources for commercial purposes. Clinton said she encouraged the SEC to make sure its final rules, which are required under the Dodd-Frank financial overhaul, reflect the law’s intent.
“We’re working very hard to try to make sure it is implemented effectively,” Clinton told the Senate Foreign Relations Committee.
The SEC has faced pressure to weaken the rules from the oil-and-gas industry, which argues U.S. companies would face a competitive disadvantage to those for which the rules wouldn’t apply. The American Petroleum Institute, Shell Oil Co., Chevron Corp. and other oil companies have urged the SEC to add certain exemptions to limit the information and circumstances for which disclosure is required.
But human-rights and anti-poverty groups, such as Oxfam America, that support the rules say payment disclosure could discourage corruption in countries in Africa, Asia and elsewhere whose governments rely heavily on natural-resource revenues, and that companies themselves could benefit. Activists say such nations rich in natural resources often face conflict, widespread poverty and ineffectual political institutions — the “resource curse.”
“If the money is being used well, that creates new business opportunities, new investment opportunities and a stable operating environment for companies,” said Ian Gary, senior policy manager for extractive industries with Oxfam.
Clinton echoed the resource curse argument, saying that “everyone is benefited by the disinfectant of sunshine and spotlight to hold institutions accountable.”
“We know and we see it every day how development of natural resources has fueled corruption, mismanagement,” Clinton said.
Clinton said she’s encouraging SEC “to go as far as possible” with the rules also because the European Commission is considering its own disclosure requirements that take inspiration from those required under Dodd-Frank.
Clinton’s comments came in response to a question from Sen. Ben Cardin, D-Md., who co-authored the Dodd-Frank law’s extractive-resources disclosure provision. Cardin has urged the SEC not to add exemptions to the rules.