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API, Groups Ask Court to Stay SEC Disclosure Rule
The American Petroleum Institute (API) and a coalition of business groups have asked the appellate court in Washington, DC, to stay the Securities and Exchange (SEC) mandate requiring producers to publicly report how much they pay governments for access to oil, natural gas and minerals.
They called on the higher court to take this action while the case makes its way up the ladder from the U.S. District Court for the District of Columbia, where it was being argued on Friday. “We respectfully request that the court stay the [SEC] mandate pending a final decision in the district court case.” The SEC opposed the requested relief.
Originally, the API, U.S. Chamber of Commerce, Independent Petroleum Association of America, and the National Foreign Trade Council challenged the SEC mandate before the U.S. Court of Appeals for the District of Columbia in late March, raising both constitutional and statutory claims. But the appellate court dismissed the petition for lack of jurisdiction and said it lacked authority to hear the suit in the first instance. It said it “proved prescient” that the group had also filed the challenge in the lower district court.
Petitioners asked the appellate court to reconsider its decision and stay the mandate “because it is possible (though concededly not certain) that one of the parties will appeal the district court’s decision. If that occurs, the continued expedition of this litigation will be facilitated,” the parties said in their stay request [Case No. 12-1398].
This rule damages the competitiveness of American companies by requiring business-sensitive information to be shared with America’s global competitors, such as those in China and Russia, API and the other groups said.
In their lawsuit filed last October, the groups argued that the rule goes far beyond what Dodd-Frank required (see Daily GPI, Oct. 12, 2012). “Section 1504 requires only that a ‘compilation’ or aggregation of payment information made by all U.S. companies to each foreign government and federal government be made publicly available. The SEC, however, grossly misinterpreted its statutory mandate to require that each U.S. company publicly file a report on the Commission’s online electronic database, detailing each payment made to each and every foreign government, for each and every ‘project’ relating to extractive industry.”
The Dodd-Frank final rule cleared the SEC by a vote of 2-1 in August 2012 (see Daily GPI, Aug. 23, 2012). It requires producers to disclose in their annual reports information relating to their resource extraction payments, or those of a subsidiary or any other unit under their control, to a foreign government or to the U.S. government for the commercial development of oil, natural gas or minerals. It defines commercial development of oil, gas and minerals to include exploration, extraction, processing and exports, according to the SEC. It would require the reporting of “any payment, whether [it is] a single payment or a series of related payments, that equal or exceeds $100,000 during the most recent fiscal year.”
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