500 global groups push SEC on transparency rules
Presbyterian Hunger Program partners lend voices to extractives debate
April 16, 2014
Two international partners of the Presbyterian Hunger Program (PHP) are among more than 500 civil society organizations from 40 countries urging the Securities and Exchange Commission (SEC) to reissue a rule requiring oil, gas and mining companies to publish what they pay to governments of countries in which they operate.
The letter was submitted April 14 to Mary Jo White, the chair of the SEC, urging that the SEC not weaken its original implementing rule, and identifying its signers as from countries “rich in natural resources, but blighted by corruption, conflict and poverty.”
The two PCUSA-related voices are those of RELUFA (Network Fighting Hunger in Cameroon), which has historically worked in partnership with Twin Cities Presbytery and the Presbytery of Chicago, as well as UMAVIDA in Bolivia (Network for Life), partnered with San Francisco and Cascades presbyteries.
Both networks work on mining issues as part of the global Joining Hands Initiative, a PHP ministry.
The letter goes on to say: “We see on a daily basis the destructive effects that poor governance of natural resources has on our communities. Greater transparency of extractive industry revenues will reduce natural resource related corruption and conflict, and, help ensure these resources are transformed into lasting public benefits.”
Jaff Napoleon Bamenjo, RELUFA’s coordinator, explained in an interview: “In Cameroon, there is an enormous need for transparency across the entire extractive industries value chain. Decades of oil exploitation has not benefited the masses. Mining and oil contracts are not favorable to the government and are negotiated in secret. The operational reports of oil and mining companies are confidential documents, which prevents third-party monitoring of operational and fiscal obligations taken by companies with respect to the communities where they operate.
“Oil and mining revenues,” Bamenjo said, “are not well accounted for in the budget and there is no traceability. Budget execution is rife with corruption.”
The Publish What You Pay coalition (PWYP) pushed for passage of Section 1504 ― known as the Cardin-Lugar provision, a bipartisan effort championed by Sen. Ben Cardin (D-Md.) and Sen. Richard Lugar (R-Ind.) ― of the Dodd-Frank Act,
The dual purpose of the transparency provision is to curb corruption by providing civil society with payment information that is often kept secret, so they can hold their governments to account; and to provide investors with project-level information in order to make informed choices about the impact of their investments, as well as possible risks.
Shortly after the SEC developed implementing rules in 2012, the American Petroleum Institute (API) and the U.S. Chamber of Commerce filed a lawsuit challenging the proposed regulations. The U.S. District Court in Washington, D.C., issued a narrow ruling in which it ordered the SEC to revise the rule. The SEC is expected to re-issue a ruling in the coming months.
The PWYP coalition ― with the support of these 500-plus organizations ― is again urging that the re-issued rule require no exemptions and require fully public, project-level disclosure of payment information. This would ensure that the final rule is aligned with recent laws adopted by the European Union and Norway, as well as forthcoming legislation in Canada.
Such filings are held by the SEC and apply to companies registered with U.S. stock exchanges.
“The SEC’s August, 2012, rule inspired the rest of the world to adopt extractive transparency legislation. Now the U.S. needs to ensure that it maintains its leadership position or risk being left behind,” said Jana Morgan, PWYP’s national coordinator. “Similar legislation has been vetted and passed elsewhere, and companies are even beginning to voluntarily disclose this information at no harm to their competitiveness or bottom line.
“The reality is that businesses, investors and resource-rich countries stand to benefit from greater transparency in the extractives sector. This letter further demonstrates that the time to act is now.”
More than 1.5 billion people live in resource-rich countries but live on less than two dollars a day. Natural resource wealth ends up being misused or squandered rather than be used as a way to improve infrastructure, education, health or development, advocates for the transparency rules say.
“While many may regard globalization and the pursuit of wealth as an inevitable force of history, the church is, by faith, called to help shape the structures that pursue such goals, because the outcomes so radically impact communities and people who have no voice in the decisions that govern their futures,” said the Rev. Gradye Parsons, stated clerk of the General Assembly of the PC(USA), of the church’s ongoing work within this coalition and its efforts to urge the SEC to resist pressure to weaken the rules.
“Further, investors need information to thoughtfully assess these matters and to increase their ability to make adequately informed choices,” Parsons added.
More than 70 PC(USA) presbyteries worked on behalf of the Cardin-Lugar provision at the request of RELUFA and other partners in extractive countries.
The denomination formally committed itself to the PWYP campaign by action of the 2008 General Assembly in San Jose, CA.
The World Communion of Reformed Churches has also lent its voice to this effort.
The Joining Hands Initiative is also working on trade reform, land grabbing and food sovereignty as economies globalize and increasingly seek short-term gains.