United States Dodd-Frank Act: Disclosure Requirements
for Publically Traded Oil, Gas and Mining Companies
Rees WarnePolicy Advisor for Extractive Industries: Catholic Relief Services
Member: PWYP-US Management Committee
Dodd-Frank Act: Section 1504
Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(US Public Law 111-203)
Requires all oil, gas and mining companies that are listed on US stock exchanges
To disclose what they pay to the governments of the countries where they operate
Which Companies are Covered? All oil, gas and mining companies that
• Are publically held (i.e., that have sold stock to investors) AND• Are registered with the US Securities and Exchange
Commission (the “SEC” is the US government agency that oversees the US stock exchanges)
This includes• 90% of the 30 largest internationally operating oil
companies• Many of the largest mining companies
What Companies must Disclose Extractives companies must disclose in their annual
report to the SEC what they paid to governments
Companies must report• Every year• Disaggregated information• For each country where they operate (“Country-by-
Country” reporting)• For each “project” in each country (Project-by-Project
reporting)• On the different types of payments they make (taxes,
royalties, fees, signature bonuses, etc.)
Timeline: Law and Rules Law and Rules/Regulations
• 5-year process of working with US Congress and the SEC
• July 2010: President Obama signed the law• August to October 2010: 1st public comment
period• December 2010: SEC provided draft rules• December 2010 – present: 2nd public comment
period• Between August and December 2011 (delayed):
SEC expected to publish final rules
Comments on Proposed Rules (1)
All comments submitted to the SEC are public http://www.sec.gov/comments/s7-42-10/s74210.shtml
Many comments support strong rules (especially comments from PWYP; development, environmental, human rights and faith-based organizations; and some investors and companies)
Other comments seek weaker rules (especially comments from major oil companies) 1. Exemptions for countries that prohibit disclosure2. Remove project by project reporting3. Claim that strong rules would weaken the EITI4. Claim that law would hurt US companies
Our Responses5. Countries that prohibit disclosure are precisely the countries
where transparency is most important6. Different project agreements have different payment requirements 7. The law and rules are designed to be consistent with – and
complementary to – the EITI8. Other markets are exploring adoption of similar disclosure
requirements – we strongly support this
Comments on Proposed Rules (2)
Timeline: Company Reporting
The first company reports are due 1 year after rules are published
• If the rules are published in August 2011 -> company reports are due in September 2012
• If the rules are published in December 2011 -> company reports are due in January 2013
Information will be Public
Information required by Section 1504 of the Dodd-Frank Act will be publically available on the SEC’s website
• In each company’s reports• As data compiled by the SEC• In an interactive format