(CN) – The Securities and Exchange Commission has unlawfully delayed implementation of a law meant to make the oil, gas and mining industries more transparent, Oxfam America says in court.
Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires U.S. oil and mining companies listed on U.S. stock exchanges to disclose the payments they make to foreign governments.
But Oxfam says the SEC failed to issue rules implementing the provisions by the congressionally mandated deadline of April 17, 2011.
“The SEC’s pattern of delay gives no assurance that it will ever promulgate a final rule without the involvement of this court,” according to the federal complaint filed in Boston.
Oxfam, an international relief and development organization, also says that the delay “simultaneously denies investors and important tool for assessing investment risk and impedes Congress’s plan to use transparency to tackle the resource curse.”
The aforementioned “resource curse” is the tendency toward corruption of developing economies dependent on resource extraction.
Sen. Richard Lugar, R-Ind., a main sponsor of the provision, is quoted in the complaint as having said it would make it “difficult for foreign governments to hide the truth” about where the profits from resource extraction are spent.
Oxfam says it is doubly damaged as an investor in many extraction companies, and as an organization that would use the information in its work to “promote transparency and accountability in developing countries in the management of extractive resource revenues.”
Companies that would be subject to the disclosure provision say it would force them to reveal proprietary information about the cost and size of their concessions, putting them at a competitive disadvantage to private and foreign state-owned energy companies that could then out bid them.
The SEC has proposed rules to implement Section 1504, but has twice extended the public comment period on the rules, and has not scheduled a date for commissioners to vote on final rules.
Oxfam says the SEC should issue final rules within 30 days of the court’s decision and pay attorneys’ fees.
It is represented by Mark Bailen of Baker & Hostetler in Washington, D.C.