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  • bluecheese4u bluecheese4u Jul 2, 2013 2:53 PM Flag

    Court rejects SEC rule on oil company payments

    Court rejects SEC rule on oil company payments

    Posted on July 2, 2013 at 11:22 am by Jennifer A. Dlouhy

    A federal judge handed the oil industry a big win on Tuesday, when he tossed out a new financial disclosure rule that would require companies to reveal what they pay foreign governments in exchange for mineral rights.

    In vacating the disclosure rule and sending it back to the Securities and Exchange Commission, District Judge John Bates said the regulation spurred by the 2010 Dodd-Frank financial law had “serious” problems.

    “The commission misread the statute to mandate public disclosure of the reports,” Bates said, adding that the SEC also acted arbitrarily and capriciously when it opted against providing any exemption for cases where foreign governments bar the disclosures.

    Forcing companies to reveal foreign payments in other countries, even when those nations bar such disclosure, “drastically increased the rule’s burden on competition and cost to investors,” Bates found.

    The SEC’s transparency rule, adopted last August, required some 1,100 publicly traded oil, gas and mining companies to report payments exceeding $100,000 made to other countries “to further the commercial development” of the host nations’ resources.

    Related story: House passes Gulf drilling bill — with SEC rule changes

    Sen. Ben Cardin, D-Md., and former Sen. #$%$ Lugar, R-Ind., led the charge to get the requirement added to the 2010 Dodd-Frank law. Human rights groups, led by Oxfam America, say such disclosures are essential to discourage graft, expose bribes and deter corruption in resource-rich nations where oil and mineral wealth isn’t trickling down.

    But the oil industry, led by the American Petroleum Institute, has argued the requirement to provide financial details for specific projects rather than whole countries at a time would give their rivals a competitive advantage, since similar disclosure isn’t required for foreign state-owned oil companies or privately held U.S. firms.

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