Written by Anderson Franco & Angélica Salceda
Theoil industryhas recently criticized the Dodd-Frank Act’s oil and gas reporting rules by claiming that the transparency requirements will result in restrained money flows between oil companies and governments. Under Dodd-Frank, all oil, gas and mining companies registered with the SEC must report payments to foreign governments on a country-by-country, and project-by-project basis.
The transparency requirements will provide detailed, standardized, and comparable data that will pressure governments to improve their revenue reports and strengthen oversight. Critics claim that the disclosures required by Dodd-Frank undermine the voluntary standard established by theExtractive Industries Transparency Initiative(EITI).
TheEITIis a global standard that promotes revenue transparency and provides a methodology for monitoring and reconciling company payments and government revenues. Nevertheless, only 11 of the 35 EITIimplementing countries fully comply with the requirements.
TheChief Executive of Royal Dutch Shell, Peter Voser, warned that Dodd-Frank’s transparency requirements threaten to destroy the progress that oil companies and governments have achieved in disclosing money flows between each other through voluntary standards such as the EITI.
“Dodd-Frank treats foreign governments not only as irrelevant, but as a problem and not a solution,” said the chief of the Anglo-Dutch oil multinational at a Paris conference. “It may even require companies to violate sovereign laws to disclose information that the laws do not allow.”
Oil industry spokespeople also claim that Dodd-Frank disclosures will oblige companies to release confidential information regarding their agreements with governments; however, there is no evidence that the disclosure rules will violate contract terms or national laws.
Contrary to the fears expressed, the outgoing EITI board chair Peter Eigen said that the new Dodd-Frank requirements are compatible with the EITI. Additionally, EITI Board memberDorjdari Namkhaijantsanalso supported the Dodd-Frank disclosure rules and added that the new requirements “will greatly strengthen EITI implementation processes and encourage other countries to join the initiative.”
The Dodd/Frank bill is bull. It adds unnecessary red-tape, and doesn’t do anything to address speculators – the parasitic leeches who drive up commodity prices without taking delivery, and profit unjustly. Dodd/Frank = FAIL!