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LONDON, February 25, 2013 — Ahead of Tuesday’s international board meeting of the Extractive Industries Transparency Initiative (EITI) in Oslo, civil society organisations urge oil companies to drop a lawsuit that aims to overturn US transparency laws.
The suit, brought by the American Petroleum Institute (API) and others against the U.S. Securities Exchange Commission (SEC), aims to strike down a landmark U.S. sunshine law that requires oil, gas and mining companies to publish payments they make to governments to end secrecy in oil deals. The law, passed in 2010 as Section 1504 of the Dodd Frank Wall Street Reform and Consumer Protection Act, was crafted to complement and expand the coverage of the EITI. SEC adopted implementing regulations in August 2012.
Oil industry board members of the EITI, such as Chevron, Exxon Mobil, and Royal Dutch Shell, are backing a lawsuit aimed at abolishing the transparency measures required by the U.S. law while being simultaneously engaged in privileged negotiations on ways to advance the EITI transparency measures.
“The API is threatening to strike down a vital mechanism for improving transparency, reducing corruption, mobilising revenue for development and transforming the lives of millions of people living in poverty. Support for this lawsuit threatens EITI progress, and is wholly incompatible with corporate commitments made through the EITI,” said Marinke van Riet, International Director of Publish What You Pay. “Publish What You Pay continues to call for all oil, gas and mining companies that are members of the API to disassociate from the suit.”
Earlier this month, one EITI board member, the Norwegian state-owned oil company Statoil, publicly disassociated themselves from the lawsuit ahead of the Norway-hosted meeting. Unlike Statoil, Chevron, Exxon Mobil and Royal Dutch Shell continue to support the lawsuit. BP declined to comment on its position when questioned by the Financial Times.
The lawsuit also appears to conflict with the interests of investors. Investors with more than $1.2 trillion in assets under management confirmed their strong support for Section 1504 in formal comments submitted to the U.S. SEC. This includes the largest public pension fund in the United States, the California Public Employees’ Retirement System (CalPERS), as well as TIAA-CREF and Calvert Investment Management, Inc.
Representatives from citizen’s groups, extractive companies and implementing countries meet in Oslo on 26th and 27th February to discuss proposed expansions to the EITI to create a new transparency standard to be launched in May 2013. Civil society organisations are calling for a number of critical measures to improve EITI effectiveness in generating extractive sector accountability and good governance.
Under discussion are issues that aim to bring the EITI into line with international best practice, including disclosure of the contracts between companies and governments, project level information as required by the US law and similar European rules that are expected to be adopted shortly, and disclosure of the ultimate ‘beneficial’ owners of oil and mining licenses.
“We hope for a productive meeting that results in a strong new global standard for transparency in natural resource deals,” said Ms Van Riet. “With governments, citizens and progressive companies all calling for this, backwards steps like the API lawsuit should not be allowed to undermine meaningful progress.”
For more information please contact:
+44 (0) 77 7575 1170
For information on the lawsuit, please contact:
+1 202 496 1179, +1 202 680 4606