EITI To U.S.: Revise New Dodd Frank Rule To Intl Transparency Standards
The Extractive Industries Transparency Initiative (EITI) has called on the United States to revise its new transparency rule, otherwise known as the Dodd Frank Rule, to meet with international transparency standards.
Last December, the U.S. Securities and Exchange Commission (SEC) proposed a new rule mandating the disclosure of payments by mining, oil and gas companies to foreign governments.
“While the rule applies to companies listed on U.S. stock exchanges, it has a global impact,” the EITI said in its recent monthly Insights.
The EITI noted that the proposed rule is inconsistent with global transparency standards, such as the EITI Standard and regulations in Canada, the EU, Norway and the UK.
“The discrepancy mainly lies in how the SEC defines project-level reporting – in other words, the level of detail at which companies should be disclosing payments in the countries where they operate,” the EITI said, adding that transparency at the project level is essential for enabling citizens and government officials to assess whether the government receives what it ought to from each extractive project.
In February, a Nigerian civil society organisation, Policy Alert, highlighted same concern in a letter to the United States SEC, noting that the new law as it were would encourage corruption in Nigeria and urged the SEC to pass a stronger version of the Dodd Frank Wall Street Reform and Consumer Protection Act Section 1504 Rule.
The letter signed by its Executive Director, Tijah Bolton-Akpan, said more robust transparency requirements are critical for Nigeria to combat corruption and ensure that revenue from her natural resources is used to benefit citizens and develop the nation.
Addressed to the Secretary of the United States SEC, Vanessa Countryman, the letter noted that rather than encourage US extractive companies operating in Nigeria, such as ExxonMobil and Chevron, to be more transparent and accountable, “the proposed draft rules would tend only to promote further opacity and thereby aid more corruption in Nigeria’s extractive industry.”
focusing its recommendations around aggregation of payments made by extractive companies to foreign governments, exemption from payment reporting for smaller companies and deadline for furnishing payment disclosures, Policy Alert stressed that the proposed rule to permit aggregation of payments at major subnational jurisdiction level will allow for lumped-together payments for multiple projects within a subnational jurisdiction.
“This will regress a lot of the gains already made with project-level reporting especially as it concerns affected local host communities,” the letter said.
Bolton-Akpan added that allowing resource extraction issuers to have the permissiveness to disclose payments to governments as late as 21 months after their most recent fiscal year will impede transparency actor’s ability to focus on current issues and develop apt future engagement plans with the government and extractive companies alike.
“Public disclosure, including of issuer identity, is critical, and the data would be useless to civil society if it were anonymized and at high levels of aggregation”, Policy Alert added in the letter.
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