Top House Democratic Lawmakers Urge Senate to Preserve Extractive Revenue Disclosure Law
As the House and Senate work to reconcile differing versions of legislation to implement an Obama Administration deal with Mexico to develop oil and gas resources in the Gulf of Mexico, three leading House Democratic lawmakers called on Senate Majority Leader Harry Reid (D-NV) to reject House Republican efforts to waive a provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act that requires extractive companies listed on U.S. exchanges to disclose the payments they make to governments for oil, gas, and mining resources.
In a letter sent yesterday, Representatives Peter DeFazio (D-OR), Maxine Waters (D-CA) and Eliot Engel (D-NY), ranking members of the House Committees on Natural Resources, Financial Services and Foreign Affairs, respectively, urged Reid to resist the inclusion of a controversial, House-passed provision that would waive the Dodd-Frank disclosure requirement for oil and gas companies operating under the U.S.-Mexico pact. The waiver was adopted despite overwhelming Democratic opposition in the House and from the Obama Administration.
Explaining the importance of the disclosure law, the letter states, in part, “Resource revenue transparency allows shareholders to make better-informed assessments of risks and opportunity costs, threats to corporate reputation, and the long-term prospects of the companies in which they invest.”
“Public disclosure of extractive revenues,” the letter adds, “is also fundamental to improving governance, curbing corruption, improving revenue management, and allowing greater accountability from governments for spending that serves the public interest.”
The Democratic letter also cites the Administration’s strong objections to the waiver, which the White House claimed, according to the letter, “directly and negatively impacts U.S. efforts to increase transparency and accountability, particularly in the oil, gas, and minerals sectors.” The letter also notes that the oil industry recently reversed its position, and now backs the US-Mexico bill without a Dodd-Frank waiver, as the quickest path to the President’s desk.
Full text of the letter is below. A signed copy can be viewed here.
November 18, 2013
The Honorable Harry Reid
Dear Mr. Leader,
As the Senate works towards an agreement with the House on final legislation to implement the United States-Mexico Transboundary Hydrocarbon Agreement (THA), we write to urge you to reject any efforts to include language that would exempt companies from the disclosure requirements under Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
The Mexican Senate ratified the THA agreement in April 2012, and we applaud the U.S. Senate for passing a clean implementation bill last month. Unfortunately, the House version of the THA implementing legislation, H.R.1613, contains an entirely unnecessary provision—adopted over strong Democratic opposition in the Natural Resources Committee and on the House Floor—that would exempt companies operating under the U.S.-Mexico pact from complying with section 1504 of Dodd-Frank.
Section 1504, which was adopted into Dodd-Frank through a bipartisan Senate amendment, requires all companies listed on U.S. exchanges to disclose payments they make to governments for oil, gas and mining resources.
Resource revenue transparency allows shareholders to make better-informed assessments of risks and opportunity costs, threats to corporate reputation, and the long-term prospects of the companies in which they invest. Public disclosure of extractive revenues is also fundamental to improving governance, curbing corruption, improving revenue management, and allowing greater accountability from governments for spending that serves the public interest.
Although Republicans in the House argued that the exemption was necessary in order to allow U.S. companies to participate under the THA, that is simply not true. In fact, despite its wish for Congressional approval of the deal, the White House issued a Statement of Administration Policy (SAP) opposing H.R. 1613 precisely because of the provision waiving the Dodd-Frank requirement for public disclosure of extractive payments to governments.
The Administration also noted in its SAP that the provision directly and negatively impacts U.S. efforts to increase extractive transparency and accountability, which is a foreign policy priority in its outreach to G8 leaders and other countries. In addition, Section 1504 is encouraging other governments to adopt similar laws, including the passage earlier this year of new transparency rules by the European Union.
Finally, the American Petroleum Institute—in a sign that even industry is now more interested in a quick implementation of the US-Mexican deal than in rolling back the disclosure mandate—recently backed the Senate bill.
Democratic Members in the House deserve the opportunity to vote on a clean implementation bill that they can support, and we urge you to give us that opportunity by insisting that the House take up and vote on S. 812.
Thank you for your consideration of this important matter.
Peter DeFazio, Ranking Member, Committee on Natural Resources
cc: Hon. Nancy Pelosi, Democratic Leader