USAID counters oil industry on disclosure rule

The letter does not specifically point out that the oil industry is seeking the exemptions, but notes that USAID wants to address “concerns raised by stakeholders” that the agency believes “could potentially undermine the intent of the provision.”

The American Petroleum Institute and several specific companies have called for such an exemption and other leeway.

They also want the rule broadly crafted to avoid disclosure of information that the industry alleges would place companies that file with the SEC at a competitive disadvantage compared to certain foreign companies.

But human-rights groups argue that the exemptions the industry is seeking would gut the Dodd-Frank provision by negating the transparency it’s designed to foster.

The disclosure provision in the Wall Street law — which is the work of
Sens. Dick Lugar (R-Ind.) and Ben Cardin (D-Md.) — is aimed at ending
the “resource curse” in which energy- and mineral-rich nations in Africa
and elsewhere are plagued by high levels of corruption, conflict and
poverty.

The USAID letter also calls for corporate payment disclosures to the SEC to be technically “filed” with the regulators, rather than “furnished” to the commission. The latter format — which the oil industry is seeking — is inadequate, according to Postel.

“Information filed, rather than furnished, provides the public the right to file claims related to information found to be materially false or misleading. On the other hand enforcement and oversight of disclosures that are furnished would solely depend on the priorities and resources of the SEC to enforce the provisions of Section 1504,” he writes.

“As such, the intent for government and civil society accountability would be undermined,” Postel writes.