With its vote last Wednesday finalizing new disclosure rules for companies in oil and mining, the Securities and Exchange Commission aligned itself strongly with the 10-year campaign known as Publish What You Pay.
For the first time, companies making payments to governments for oil, natural gas or minerals will be required by law to break down the types and amounts of those payments if they want to continue to trade on a United States stock exchange -- and the rules apply to any company, foreign or domestic, trading in the U.S.
The rules are a victory for the global movement for open, responsible management of natural resources. With better information on the payments that flow from companies to governments, citizens and journalists can hold their leaders more accountable and investors can better manage risk. Transparency is especially vital in the developing countries that hold huge reserves of petroleum and minerals, where too often corruption and mismanagement deny citizens the benefits of natural resources, stunt economic growth and worsen political instability.
Even though these requirements became law in 2010, under Section 1504 of the Dodd-Frank act, it took more than two years for the SEC to issue final regulations. The oil industry waged an all-out campaign to hobble the new standards before they saw the light of day, hammering away at them in the press and in submissions to the SEC.
But our campaign had its champions too, from the bill's original authors, Senators Ben Cardin (D-Md.) and Richard Lugar (R-Ind.), strongly supported by Senator Patrick Leahy (D-Vt.) and Congressman Barney Frank, to world leaders in business, international development and philanthropy, to the global alliance of advocates and policy experts in our Publish What You Pay coalition, including Revenue Watch, Oxfam, Global Witness, Calvert Investments, Earthrights, the ONE Campaign and literally hundreds of other groups.
With the rules finally voted, approved and published by the SEC, we now know that most of the warnings conjured by "big oil" and its lobbyists were seen by regulators for what they were: scare tactics. Here are a few of the key elements of the final SEC rules:
The European Union is far along toward adopting similar disclosure rules, and the SEC formulation will provide strong backing for those Europeans wanting to see tough European legislation. The EU parliament is expected to vote next month. According to the SEC rules, companies are required to begin reporting under the standard in 2014. The precise format and data standards for company filings are yet to be determined.
With these rules, citizens have been given a potent tool to ensure that their country's natural resources provide them with economic and social benefits. And the era of secrecy for oil and mining companies is coming to a close. For the thousands of such companies that trade in the world's largest capital market, transparency has officially become the law of the land.