Groups hail rebuke of SEC disclosure rule

Industry groups hailed a court decision vacating a Securities and Exchange Commission requirement for increased disclosure by US energy companies of international financial information.

The US District Court for the District of Columbia struck down a rule, implemented as part of the Dodd-Frank financial reform law, requiring publicly traded extractive-industry companies to report taxes, royalties, and license and other fees paid to foreign governments.

A business coalition that included the American Petroleum Institute and Independent Petroleum Association of America challenged the requirement in court, saying disclosure of the commercially sensitive information would hurt the abilities of affected companies to compete globally (OGJ Online, Oct. 22, 2012).

Harry Ng, API vice-president and general counsel, called the court decision “a win for American jobs, for our economy, and for international transparency.”

The rule, he said, would have jeopardized transparency by “making American firms less competitive against state-owned oil companies.”

Karen Harbert, president and chief executive officer of the US Chamber of Commerce’s Institute for 21st Century Energy, said the SEC rule “would have placed American oil and natural gas companies at a huge disadvantage around the world by forcing them to turn over their playbooks for how they bid and compete against foreign, state-owned companies.”

She said compliance with the SEC rule would violate laws of several countries in which US companies conduct business.