NEW YORK (Reuters) - Oxfam America sued the U.S. Securities and Exchange Commission on Wednesday to try to get the SEC to force oil, gas and mining companies to disclose how much they pay to foreign governments.
The SEC is more than a year late in issuing a regulation requiring U.S.-listed oil, gas and mining companies to disclose the payments, according to the lawsuit, which was filed in federal court in Massachusetts.
The regulation is mandated by a section of the Dodd-Frank Act that seeks to increase transparency in the drilling and mining industries. The Act, passed in July 2010, said the SEC must issue a disclosure rule within 270 days, a deadline that passed in April 2011.
In its lawsuit, the humanitarian group said that disclosure of payments to foreign governments is crucial to ensuring that money from natural resources in countries across Africa, Asia and Latin America is managed “accountably, transparently, and in the public interest”.
Many countries in the developing world suffer from what is known as the “resource curse”, in which resource-rich countries face higher rates of poverty and corruption than their resource-poor neighbors. Advocates of the disclosure rule say that it will help citizens in these resource-rich countries hold their governments accountable for the money they receive from oil, gas and mining companies.
The SEC issued a proposed disclosure rule, which was opposed by the oil industry, in December 2010. SEC spokesperson John Nester said that it has received thousands of public comments on the proposed rule.
Though declining to comment directly on the Oxfam lawsuit, Nester said that the SEC was “working hard to adopt an effective rule as soon as possible.”
Oxfam America brought the suit as a shareholder of various companies, including Chevron Corp (CVX.N). No one at Chevron was immediately available to comment.
Carton Carroll, a spokesman for the American Petroleum Institute, which represents the oil industry, said that while the API supports transparency, the SEC’s current approach “would give foreign companies access to confidential, proprietary information that they could use against U.S. companies when competing for crucial energy resources around the globe.”
Newmont Mining Corp (NEM.N), another company named in Oxfam America’s lawsuit, said through a spokesman it already discloses payments to governments.
The case is Oxfam America Inc v. U.S. Securities and Exchange Commission, U.S. District Court, District of Massachusetts, no. 12-cv-10878.
Reporting by Rebecca Hamilton; Editing by Richard Pullin