WASHINGTON — Two senior U.S. lawmakers unveiled legislative plans on Monday to scrap a rule devised under the 2010 Dodd-Frank financial reform law requiring publicly-traded mining, oil and gas companies to disclose payments they make to foreign governments.
Michigan Republican Bill Huizenga, who chairs the House of Representatives Financial Services subcommittee on capital markets, and Oklahoma Republican James Inhofe, chairman of the Senate Environment Committee, took aim at the U.S. Securities and Exchange Commission’s so-called “resource extraction” rule, saying it makes it harder for U.S. energies companies to compete.
They introduced measures to ax the rule using the Congressional Review Act, a largely untested law allowing Congress to stop recently adopted regulations through a simple majority. Republicans this week are on a deregulatory blitz and using the law to undo five Obama-era regulations. The full House is expected on Wednesday to approve the five deregulating measures and then send them to the Senate.
The SEC rule is championed by human rights organizations who say the disclosure of payments to foreign governments by companies like Exxon Mobil Corp and Chevron should help reduce corruption.
“There is absolutely no benefit to nullifying this common sense law unless your objective is to make it easier for corrupt elites to steal money,” said Isabel Munilla who studies extraction policies for anti-poverty group Oxfam, adding more than 30 countries have similar rules. “Rolling this back would turn the U.S. from a transparency leader to a laggard overnight.”
But the U.S. Chamber of Commerce and other industry groups have long opposed it, saying it hurts U.S. companies without providing investors with meaningful, material information.
On the floor of the Senate Inhofe said the rule forces to U.S. companies to publicly share details that foreign competitors can then use to underbid them.
Industry groups successfully beat back the rule a few years ago and the SEC was forced to go back to the drawing board. Then, the regulator was accused in 2014 by Oxfam of dragging its feet on completing a new draft.
A federal judge ordered the SEC to fast-track the rule in 2015, and the agency issued a final rule last summer that is set to take effect in 2018.
“The SEC continues to propose a resource extraction rule that is overly burdensome, puts U.S. companies at a competitive disadvantage, and fails to provide investors with useful information,” Huizenga said.