SEC revives payment disclosure rule for oil, mining firms

The Securities and Exchange Commission is poised to take another stab at regulations requiring oil and mining companies to disclose payments to foreign governments.

The requirement is part of the 2010 Dodd-Frank financial reform law, but a federal court tossed out the SEC’s first draft in July, saying the agency went too far in forcing companies to make detailed reports public.

The proposal, championed by human rights groups (and George Soros and Bill Gates) and criticized by industry, was left off of the Obama administration’s subsequent formal regulatory agenda, released last November.

But it’s again listed on the latest version, released Friday. Known as the Unified Agenda, the plan details thousands of rules agencies plan to tackle in the next 12 months.

The agency intends to issue a formal notice of public rule-making by March of next year, according to the agency’s agenda.

A description of the proposal says the rule would require companies to disclose payments made to foreign governments “for the purpose of commercial development of oil, natural gas or minerals.”

The rule would apply to SEC-listed oil, natural gas and mining companies involved with overseas projects and covers a variety of payments, such as money for production licenses, taxes and royalties.

The idea is to improve transparency to help undo the “resource curse,” in which some impoverished countries in Africa and elsewhere are plagued by high levels of corruption and conflict alongside their energy and mineral wealth.

But industry and business groups say the rule, at least as originally proposed, would add unnecessary burdens on companies and force public disclosure of sensitive information.

In his July ruling, U.S. District Court Judge John D. Bates said the SEC erred in mandating that companies’ full filings, rather than just summaries, must be made public.

 The SEC “offers no persuasive arguments that the statute unambiguously requires public disclosure of the full reports,” Bates wrote.