November 9, 2012
Clark Gascoigne, +1 202 293 0740 ext. 222
Key Oil, Gas, and Mining Industry Transparency Rules Will Not Be Delayed by Pending Litigation
WASHINGTON DC – Global Financial Integrity (GFI) applauded the Securities and Exchange Commission (SEC) today for denying the request (PDF) of industry groups to stay key oil, gas, and mining transparency rules pending a lawsuit.
The rules implementing Section 1504 (or the “Cardin-Lugar Amendment”) of the Dodd-Frank Wall Street Reform and Consumer Protection Act require publicly traded oil, gas, and mining companies registered with the SEC to report payments they make to any governments. Cardin-Lugar has been hailed as one of the most important anti-corruption advances in modern U.S. history.
GFI, a Washington-based research and advocacy organization, had previously called on the SEC to deny the stay, noting that it would lead to the regulations being “mired in legal quicksand.”
“This is a victory for anyone who cares about fighting poverty, protecting investors, making markets more efficient, or reducing corruption,” remarked GFI Director Raymond Baker. “The decision clears away a major roadblock that would have prevented some of the most important transparency rules in a decade from being implemented.”
Baker continued, “Our research shows that the developing world loses roughly $1 trillion per year to crime, corruption, and tax evasion. This is a systemic problem caused largely by the opaque, secretive global financial system. For citizens of resource-rich countries, Cardin-Lugar goes a long way toward breaking up a part of this system and shining light in places that need it most.”
Mr. Baker spent much of his professional life as an entrepreneur in Nigeria, including living there for fifteen years in the 1960’s and 70’s. In a recent article for The Huffington Post, he commented on how Nigeria’s economy had suffered from a lack of transparency:
“Despite massive oil wealth and a vibrant, young population, 45% of the population lives below the poverty line. Per-capita GDP has barely risen since I first set foot there in the 1960s. I know far too many people living worse off today than they did decades ago. This is not because the Nigerian economy lacks promise–it has huge oil exports, and the country is filled with good, ambitious, entrepreneurial people–but because crime, corruption, and tax evasion have torn the country apart.”
The transparency rules are scheduled to take effect as planned on November 13, 2012.
+1 202-293-0740 ext. 222
Notes to Editors:
- Click here (PDF) to download the Securities and Exchange Commission’s order denying the stay request from the oil industry.
- Click here to read GFI’s November 1, 2012 press release calling on the SEC to deny the oil industry’s stay request.
- Click here to read GFI Director Raymond Baker and Global Witness’s Corinna Gilfillan’s CNN op-ed, “More reform for oil industry needed,” August 7, 2012.
- Click here to read Najwa al-Beshti’s New York Times Op-Ed, “A Libyan’s Plea to the S.E.C.,” from August 18, 2012.
- Click here to see a slide show on the costs of corruption for the top ten oil-exporting countries in the world compiled by GFI for the Huffington Post.
- GFI is a member of the Publish What You Pay U.S. (PWYP) coalition. PWYP is part of a global civil society coalition that helps citizens of resource-rich developing countries hold their governments accountable for the management of revenues from the oil, gas and mining industries. Natural resource revenues are an important source of income for governments of over 50 developing countries. When properly managed these revenues should serve as a basis for poverty reduction, economic growth and development rather than exacerbating corruption, conflict and social divisiveness.
Global Financial Integrity (GFI) is a Washington, DC-based research and advocacy organization which promotes transparency in the international financial system.
For additional information please visit www.gfintegrity.org.