Today, Publish What You Pay (PWYP), a global coalition of civil society organizations was presented with the Commitment to Development Award sponsored by the Center for Global Development and Foreign Policy magazine. Special recognition is being given to Publish What You Pay United States (PWYP US), of which ERI is a member, for promoting revenue transparency in the oil, gas, and mining industries through our work towards passage of the Cardin-Lugar Transparency Provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The Cardin-Lugar Provision, the first of its kind in the world, will require all oil, gas, and mining companies filing annual reports with the Securities and Exchange Commission to disclose their extractive related payments to governments on an annual and project basis. The detailed discloser requirements are currently being drafted by the Securities and Exchange Commission and they will issue draft regulations later this month, and final regulations sometime in 2011. Both PWYP US and ERI are submitting Comments to ensure the intent of the legislation is not defeated by industry attempts to weaken the rules.
Already, we can see from Comments filed with the SEC, that companies, their lawyers, and Trade Association lackeys, are making efforts to eviscerate the bill. In one example, major U.S. law firms working for the oil, gas, and mining industries, are recommending that the rules should only be applied to projects that are material to the companies, not for every project as the plain language of the bill requires (“the type and total amount for each project….”). If the SEC followed this recommendation, for almost all projects, no information would be disclosed, clearly violating the language and intention of the Provision. On top of that, these law firms — who conveniently add in a small footnote at the end of their submission that, shockingly, yes, they may well be on the payroll of the companies affected by this Provision (“The firms that are signatory to this letter advise clients that may have an interest in this matter”) — are recommending that the SEC allow companies to be excluded if the country they operate in passes a law requiring confidentiality of payment. This means that for a country like Burma, which has the distinction of being ranked as the second most corrupt in the world, in Transparency International’s Corruption Perception Index for 2010, the military junta and its friends would merely have to enact a law outlawing payment disclosures, which again, defeats the purpose of the Provision.
At ERI, we are encouraging the SEC to implement the strongest possible regulations to ensure that the largest number of companies are covered, and that the information is disclosed in a way that is usable for civil society groups working to hold governments accountable for the management of resource-related revenues.
On a final note, we at ERI would like to congratulate Isabel Munilla, Director of PWYP US, and her predecessor Sarah Prey, for their amazing and inspiring work in helping pass the Cardin-Lugar Provision. Quite literally, this would not have happened without them, and we raise a glass to PWYP US, PWYP, and these two remarkable campaigners for the receipt of the 2010 Communityment to Development Award.