Bill Gates Presses SEC To Keep Oil and Mining Transparency Rule Strong Despite Industry Pressure
In separate letters to the Securities and Exchange Commission (SEC), Bill Gates and some members of Congress have both called on the agency to finalize key rules created by the Dodd-Frank Act that would fight corruption in developing countries' mining operations. One of those rules was written with the intention of stopping the flow of conflict minerals into the U.S.
The letters from Gates and members of the House call on the SEC to prevent energy companies from diluting the rules, one of which is supposed to require all oil, gas and mining companies reporting to the SEC to disclose their tax and other payments in every country of operation.
Here's The Wall Street Journal on how industry has wielded its influence:
Speaking OutThe Guardian reports on the letter from Bill Gates:
The former Microsoft chief said it was important that the US was the standard bearer in the fight against corruption, adding: "I feel it is critical to ensure the final rules for this provision are strong and robust and in keeping with the intentions of Congress."
Sources close to Gates said it was unusual for him to make direct appeals, but there was concern about a lobbying campaign in Washington that would provide the big energy companies with loopholes that would allow them to continue operating in their current fashion.
Gates' letter also said: “It is in the most secretive jurisdictions that corruption, poverty and instability flourish and the risk to investors is greatest. Any exemption from reporting payments to governments that object to such disclosure would defeat a primary purpose of the law.”
The rule in the Dodd-Frank Act may not be perfect, but it's not likely to be improved by the industries that have to wake up and make some changes. The Journal has more on the letter from House lawmakers:
The letter from 14 members of the House of Representatives, led by Rep. Barney Frank (D., Mass.), notes their concern with the SEC in being so far behind in meeting the April 2011 statutory deadline for releasing final rules governing a program for oil, gas and mining companies to have to disclose the payments, at project-level, they make to foreign governments...
The House letter, dated Wednesday, took to task industry efforts to weaken crucial definitions within the provision, including a bid to call a “project” the equivalent of a company’s entire aggregate work in a foreign country or even as far as a “geographic basin.” It said reporting at such an aggregate level “would violate both the clear and separate company-by-company and the country-by-country requirements” of the provision, which is Section 1504 of the Dodd-Frank Act.
Moreover, the lawmakers said in the letter they urge the SEC to make the requirements of Sec. 1504 apply to all companies that raise capital in U.S. markets and report to the SEC, without exemption.
Gates: "Transparency of Financial Flows is Critical"More from The Guardian, which explains how the rule has an impact on much of the continent's entire economic sustainability. That makes it more than a good idea—transparency in mining is crucial for a better future:
Gates said Africa's natural resources were worth $246bn in exports in 2009, six times greater than the money it received in aid. "Little of this value remained in Africa. Transparency of financial flows is critical to ensuring these valuable resources are transformed into public benefits."