Repeal of mandates for overly detailed disclosure of payments to foreign governments relates more to competition and regulatory balance than to transparency.
When the US House voted on Feb. 1 to reject the Securities and Exchange Commission rule for extractive industries, however, objections implied otherwise.
"Voting to roll back basic transparency rules provides zero benefit for the public but will instead allow corrupt elites to continue to stuff their pockets with oil money and steal from their citizens," complained Isabel Munilla, senior policy advisor for extractive industries at Oxfam America.
In fact, SEC didn't impose "basic transparency rules." If it had done so, the American Petroleum Institute, Independent Petroleum Association of America, and others would not have sued in 2012 to challenge the commission's first rule.
Like most industry representatives, they support disclosure of payments to foreign governments as an antidote to corruption.
But the SEC stretched beyond basic transparency. In 2013, the US District Court for the District of Columbia ruled the commission also went beyond Sect. 1504 of the Dodd-Frank financial-reform law.
Contrary to many media reports, producers don't object to reporting payments to governments. They resist having to divulge what they, specifically, pay in relation to specific projects.
That's proprietary intelligence, especially valuable to competitors with no comparable requirements. In many cases, moreover, the required disclosures violate contracts with host-country governments.
Illuminating aggregated payments to governments should move systems halfway toward basic transparency. The other, harder, half is tracing money after it enters official custody.
Transparency activists insist accountability and enforcement require disclosure at company and project levels. Their anticorruption fervor is laudable. But the impracticably specific reporting they demand push projects increasingly toward entities required to make no disclosure at all.
The SEC imposed maximum regulation, discouraging work by affected companies. When rebuked in court, it responded with more of the same.
The House thus did not vote to roll back basic transparency. It voted to roll back a stifling overreach dreadfully typical of the previous administration.
(From the subscription area of www.ogj.com, posted Feb. 3, 2017; author's e-mail: [email protected])