After the Olympics wrap up, the US will once again have the opportunity to take the gold — this time, in setting standards for extractives transparency. In just two weeks, on August 22nd, the Securities and Exchange Commission (SEC) will vote on the final rule to implement the Cardin-Lugar Amendment, also known as Section 1504, of the Dodd-Frank Act. The Cardin-Lugar Amendment requires all companies that trade on the N.Y. Stock Exchange to publish the payments they make to governments worldwide for oil, gas and mining.
More than 1.5 billion people live on less than $2 a day in countries that are rich in natural resources like oil, metals, diamonds and other minerals. Sadly, instead of profits from extractive industries going to improve health care and increase the number of kids in school, all too often the money is funneled into the personal bank accounts and lavish lifestyles of corrupt government officials. When mineral wealth and abject poverty to go hand-in-hand in developing countries, it is often called the “resource curse.”
Section 1504 will help citizens of resource-rich countries learn how much their governments are receiving from extractive industries and enable them to hold their governments accountable for investing these revenues in public services. For us at ONE and our partners at Publish What You Pay (PWYP), transparency and accountability and are essential factors in the equation of reducing poverty and promoting development.
ONE members have been invested in fighting the resource curse for more than two years now. Legally, the SEC was required to release a rule on April 16, 2011. After 143,000 petition signatures, thousands of comments and letters to the SEC, hundreds of tweets and calls to SEC Commissioners, and one Oxfam lawsuit later, we finally have a date for a vote on the rule.
However, the question remains as to whether the SEC will stand up to big oil and interpret the rule as Congress intended and fulfill the promise of bold US leadership on global extractive transparency. The European Union is working on similar legislation to require all EU-listed and large EU-based extractive companies to publicly disclose their payments to governments worldwide. The US rule will set the precedent for the rest of the world, so it is critical that the SEC delivers a strong American rule that sets the gold standard on extractive transparency.
Stay tuned to our Tell Big Oil We Won’t Be Bullied topic page for more information on the SEC and Cardin-Lugar. In the pipeline are blog posts on the three major areas of the rule that ONE and our PWYP members are watching closely: Exemptions from disclosures; Project definition, and de Minimis payments. Our message to the SEC? Go for the gold and set the record by producing a strong rule with “No Exemptions and No Loopholes!”