News: SEC must strengthen draft anti-corruption rule

Download this statement as a press release

For Immediate Release: December 18, 2019

Contact: Kathleen Brophy – kbrophy@pwypusa.org

Mobile: 443-285-1563

SEC must strengthen draft anti-corruption rule

Publish What You Pay — United States Director, Kathleen Brophy’s statement in response to today’s vote by the SEC to issue a proposed rule implementing the Cardin-Lugar anti-corruption provision, also known as Section 1504 of the Dodd-Frank Act:

“We are disappointed today that the SEC has released a weak proposed rule to implement the landmark Cardin-Lugar provision, which requires oil, gas and mining companies to publish their payments to governments. This regulation is intended to combat corruption by shining a light on billions of dollars in payments, empowering citizens around the world to hold their governments accountable for how their natural resource wealth is managed. The draft rule issued today would absolutely fail to deliver on these goals and would instead, enable bribery and corruption.”

“Unfortunately, today’s proposed rule falls short by allowing companies to report only those payments that meet an arbitrarily high threshold, keeping investors and citizens from tracking the most essential information– contract-based, project level payments. The rule includes baseless exemptions and arbitrary reporting thresholds, neither of which have any backing or evidentiary support. In fact, similar reporting requirements being implemented in over 30 countries shows that meaningful project level payment reporting without exemptions is doable and has real impact. ”

“The facts are simple. Project level payment reporting is the most effective tool for deterring grand scale corruption and presents absolutely no adverse harm to industry. The SEC has said this itself in the past. But as Commissioner Lee made clear today, the draft bends to industry asks in almost every instance. The politics of this rule should not be mistaken for the facts. We are surprised to see the SEC’s initial reliance on industry arguments but we fully expect the SEC to abide by the irrefutable evidence in its final rule, rather than align itself with industry claims that were long ago debunked.”

“The SEC has an important chance to advance global efforts to combat corruption and protect investors by issuing a final rule that empowers those seeking to shine a light on shady deals. This is a critical moment for the SEC to lead this administration’s stated efforts to curb corruption around the world. A strong final rule would finally fulfill the intent of Section 1504 and maintain the US’s role as a leader in fighting corruption. We will do everything we can to make sure that the final rule does just that.”

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