WASHINGTON, D.C. | December 16, 2020 — Today, on a 3-2 vote, the U.S. Securities and Exchange Commission (SEC) approved a rule that undercuts the anti-corruption and investor protection purposes of Section 1504 of the Dodd-Frank Act, also known as the Cardin-Lugar amendment. Under Section 1504, oil and gas and mining companies must disclose payments they make to foreign governments, as well as the U.S. government, in securing permission to extract natural resources. Today’s rule allows these companies to conceal these payments by allowing them to aggregate them in their disclosures rather than requiring project-by-project breakdowns.
The National Whistleblower Center opposes the rule and commits to work with anti-corruption allies to reverse it in the coming year.
“The Cardin-Lugar amendment to the Dodd-Frank Act was an important milestone in global efforts to combat corruption, and unfortunately today the SEC voted to ignore Congress’s will and instead to do the bidding of the fossil fuel industry,” said John Kostyack, Executive Director of the National Whistleblower Center, “Despite this setback, whistleblowers will continue to speak up for people around the world who suffer at the hands of corrupt governments and industries.”
In explaining today’s rule, outgoing SEC chairman Jay Clayton stated that robust disclosure of resource extraction payments was not a concern of investors and therefore outside of the SEC’s purview. In contrast, in her dissent, Commissioner Lee explained Congress’s clear expressions of its anti-corruption purpose in instructing the SEC to implement the Cardin-Lugar amendment. She also noted how investors representing trillions of dollars of investments had spoken out against the proposed weakening of disclosure requirements that were included in today’s rulemaking.
The anti-corruption disclosures supported by the National Whistleblower Center and other anti-corruption groups are already required by UK, EU and Canadian regulators. Thus, the U.S. will need to reverse today’s decision to avoid being perceived as a laggard in the global campaign against corruption in the fossil fuel sector.
For more information, please contact Nick Younger at firstname.lastname@example.org.