News: French Oil Major Cites Low Compliance Costs for Global Disclosure Regime

French Oil Major Cites Low Compliance Costs for Global Disclosure Regime

Encourages the SEC to Produce Anti-Corruption Rule in Alignment with Global Standard

PWYP-US applauds Total SAP’s recent comment letter to the Securities and Exchange C ommission (SEC) which states that the compliance costs for disclosing its project-level payments to governments is “low.” In this submission, which responds to the SEC’s requests for comments on the new proposed rule for Section 1504 of the Dodd-Frank Act, Total states that its internal costs for reporting project-level payments to governments under the related EU regulations is approximately $200,000 per year. According to the company’s 2019 figures , this represents .0007% of Total’s 2019 operating costs of $28 billion.

Total’s statement is in stark contrast to the inflated compliance cost assumptions in the SEC’s proposed rule and provides more accurate compliance cost numbers based on companies real experience reporting these payments under the EU regulations. Unfortunately, the draft rule fails to take into account the compliance data now available based on four years of reporting in Canada, the EU, Norway, and the UK.

“The SEC’s current cost analysis relies on uncited, inaccurate, and outdated estimates,” stated Kathleen Brophy, PWYP-US Director. “They are using these overblown estimates to justify a severely weakened rule that deviates significantly from the global standard now being implemented in over 30 countries. Accurate compliance costs matter, and the SEC should take this statement from Total seriously, since it is based on the company’s real reporting experience, rather than hypothetical estimates.”

Total is the first company to provide detailed compliance cost information to the SEC to help inform the SEC’s analysis and final rule. PWYP-US encourages other companies to do the same, so that the rule correctly reflects the current market reality.

Section 1504, a ground-breaking anti-corruption law, requires oil, gas and mining companies to publicly disclose the project-level payments they make to governments for access to natural resources, including taxes, royalties and fees. The regulation had been finalized in mid-2016 after a six-year rule-making process. In 2017, Congress voted to repeal the implementing rule, using the Congressional Review Act. The new proposed rule was issued by the SEC in December 2019. All interested parties are invited to submit comments to the SEC in regards to the proposed rule for a 60-day comment period, ending March 16, 2020.