Exxon Mobil headquarters in downton Houston, Texas. ()
A pair of oil industry executives have asked the U.S. Securities and Exchange Commission to press staffers to revise the agency’s rules related disclosing payments made to governments for extraction rights, Compliance Week reported Wednesday.
While the Dodd-Frank Act requires such disclosure, its introduction has been delayed after the American Petroleum Institute and the U.S. Chamber of Commerce sued successfully to block it. As Compliance Week explains, U.S. District Court Judge John Bates of the District of Columbia vacated the SEC’s proposed rule last July, remanding it back to the commission and embracing the plaintiffs’ argument that the SEC had “misread the statute to mandate public disclosure of the reports.”
Now, Compliance Week reports, oil companies are anxious to see the SEC to act before British regulators establish a disclosure model that could prove more onerous. In fact, the U.K. is acting quickly and may require extraction rights payments disclosure as soon as October, Compliance Week notes.
“We believe that the U.K. timetable is material to U.S. consideration of this issue,” Royal Dutch Shell chief financial officer Simon Henry and Exxon Mobil controller Patrick Mulva wrote in a recent letter addressed to SEC chair Mary Jo White, according to Compliance Week. The two men added that the U.K.’s movement on this front “increases the urgency” for the SEC to issue its revised rule soon.
“No one benefits from an outcome under which multinational resource companies are required to file multiple reports in multiple jurisdictions providing substantially the same information in different forms,” the executives wrote. “On the other hand, we believe all stakeholders would benefit from seeing the direction of SEC rulemaking as transparency reporting is implemented around the world. An ideal solution to the issue might be that compliance with the reporting rules in one country would be deemed to satisfy the reporting requirements in another country notwithstanding variations in detail.”
Henry and Mulva also expressed the hope that a move by the SEC to take lead could push back the compliance timetable, the oil executives are hoping.
“If the SEC were to take concrete steps to indicate it will take up the rulemaking this year,” they wrote, “the U.K. government might be willing to defer implementation of its transparency legislation from the October 2014 schedule to the April 2015 time frame.”
Add the pair: “This would provide sufficient time for the SEC to discuss with the U.K. implementing authority, and how best to take into account the SEC rules before any EU member state finalizes its transparency legislation.”