SEC reproposes Dodd-Frank foreign payment disclosure requirement

The US Securities and Exchange Commission reproposed a requirement that US oil and gas firms and other extractive industries publicly disclose payments to a foreign government for commercial development of that country’s resources.

Initial public comments will be accepted through Jan. 25, 2016. Reply comments, which may respond only to issues raised in the initial comment period, are due on Feb. 16, 2016, the federal securities regulator said on Dec. 11.

The congressional mandate under Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act “has proven to be among the more controversial rules that the Commission has been required to undertake” under the 2010 law, Commissioner Luis A. Aguilar said as the SEC issued the latest proposed rulemaking notice on Dec. 11.

After it proposed the rules originally in December 2010, the commission received more than 149,000 comment letters from corporations, industry and professional associations, government officials (both foreign and domestic), nongovernmental organizations, academics and other interested parties, with over 150 individual letters and the rest form letter, he said.

Following adoption of those rules in August 2012, Aguilar said they were legally challenged, and US District Court for the District of Columbia vacated them (OGJ Online, July 2, 2013). SEC subsequently began to rework the rules to comply with that decision (OGJ Online, May 28, 2014).

Meantime, other countries moved ahead on foreign payment disclosure requirements. “These proposed rules would implement a statutory mandate and require disclosure consistent with other payment transparency disclosure regimes around the world,” SEC Chair Mary Jo White said on Dec. 11.

Voluntary disclosures

Some global extractive industry companies also began to voluntarily disclose the information, Aguilar said. “Indeed, driven in part by the recent global developments in resource extraction disclosure legislation, industry representatives, human rights and environmental advocacy groups, and other government agencies have written the SEC to press for new resource extraction disclosure rules,” he said.

The American Petroleum Institute immediately objected to the new proposal. “The SEC rule would only apply to US firms, placing them at a competitive disadvantage against government-owned oil giants not subject to the rule,” said Stephen Comstock, API tax and accounting policy director.

“Not only could the rule hurt the millions of Americans who own shares in oil and natural gas companies, it could also cost jobs and damage America’s energy security by making it more difficult for US firms to gain access to resources abroad,” Comstock said.

Oxfam America, which supports broader public disclosures of business payments to foreign governments, applauded SEC’s move.

“If final rules align with those in force in other markets, this will not only meet US foreign policy goals and support domestic transparency goals, but they will also align with existing reporting requirements covering leading oil and mining companies,” said Ian Gary, the group’s associate policy director for fueling development.

Contact Nick Snow at

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