GOXI

sharing in governance of extractive industries

Bnet: Bono Versus Big Oil (by Julien Harneis)

Activists, including U2 frontman Bono, cheered — while Big Oil blasted — an 11th-hour insertion into the Dodd-Frank financial reform law last month that will require all companies registered with the SEC
to disclose their royalties, bonuses and other payments to foreign
governments for the extraction of oil, gas and minerals. But the fight
isn’t over. It’s just moving to the SEC.

How can I be so sure? The American Petroleum Institute, the powerful oil and gas lobby group, told me so. API spokeswoman Misty McGovern wouldn’t go so far as to reveal the group’s plans, saying only that they were “in the early stages of formulating a strategy.” But she did
confirm that the SEC will be the next battleground.


The amendment, inserted by Sens. Richard Lugar, R-IN., and Ben Cardin, D-MD., aims to end the so-called resource curse, in which underdeveloped countries are paid handsomely for their natural
resources, but monies aren’t passed down to the poverty-laden
population. The amendment not-so-coincidentally pulls directly from
Lugar’s now-idled Energy Security Through Transparency Act.


The law now heads to the SEC, where the agency has about nine months to craft the wording of the regulation. Oil, gas and mining companies will lobby the commission to keep the annual reporting requirements as
vague as possible. Their ideal scenario? To get the SEC to only require
companies to provide aggregated information, McGowen said. For instance,
instead of Exxon (XOM) having to disclose detailed
payment information of each project in the foreign country where it’s
operating, the company would only have to provide the lump sum paid out
that year.


Companies, including Exxon, argue the law will put U.S. businesses at a distinct competitive disadvantage because their international rivals would be able to see how much they’re paying for rights to develop oil and gas fields or extract
minerals.


That’s not entirely accurate. The disclosure rule forces any company registered with the SEC to follow the rules. That means companies like UK-based BP, Australia’s mining giants BHP Billiton (BHP) and Rio Tinto (RTP), Brazil’s Petrobras (PBR) and even a few Chinese energy companies, like CNOOC, have to make the same disclosure as U.S.-based Chevron (CVX). That being said, there are some national oil companies — or NOCs — that aren’t registered with the SEC and in those cases, it would be a
competitive disadvantage for all the SEC-listed ones.


Exxon and the like are more supportive of what they call a more inclusive international requirement, specifically, the Extractive Industries Transparency Initiative. It’s not that EITI isn’t a worthy organization. It is. But the new disclosure law is powerful because it’s widespread and not voluntary,
which makes it far more attractive to activists seeking change right
now.


From: http://www.bnet.com/blog/clean-energy/bono-versus-big-oil-the-resou...

Views: 124

Add a Comment

You need to be a member of GOXI to add comments!

Join GOXI

Conveners

           GOXI Partners

Videos

  • Add Videos
  • View All

© 2019   Created by Kobina Aidoo.   Powered by

Badges  |  Report an Issue  |  Terms of Service