By Sheri Qualters, from The National Law Journal

A Boston federal judge ordered the U.S. Securities and Exchange Commission to speed up rulemaking that will require energy companies to disclose their payments to governments in exchange for commercial development of natural resources.

U.S. District Judge Denise J. Casper on Sept. 2 sided with plaintiff Oxfam America Inc., an international human rights organization known for programs that target poverty. She granted Oxfam’s summary judgment motion and denied the SEC’s summary judgment motion.

“The SEC is now more than four years past the deadline set by Congress for the promulgation of the final disclosure rule,” Casper wrote.

Casper gave the SEC 30 days to file an expedited schedule for issuing a final Extractive Payments Disclosure Rule to implement section 1504 of the Dodd-Frank Act. The law calls for publicly traded oil, gas, and mining companies to disclose their extraction payments to U.S. and foreign governments in SEC filings.

Dodd-Frank’s July 2010 effective date set an April 2011 statutory deadline for the SEC’s final disclosure rule, Casper wrote. The judge ruled that she would retain jurisdiction over the matter to ensure agency compliance.

Oxfam filed the Administrative Procedure Act case in September 2014 to force the SEC to issue the final rule.

The organization wants these payments to be public because oil and mining projects frequently cause environmental damage and human rights violations, said Oxfam America senior policy manager Ian Gary. The money companies pay governments to take the resources is often mismanaged and contributes to corruption, he added.

“The theory is that more transparency and more active transparency by citizens can lead to better oversight,” Gary said.

The ruling sends a very strong message to government agencies, said Jonathan Kaufman, legal advocacy coordinator at EarthRights international and lead counsel on the case.

“It says that when Congress imposes a deadline, those deadlines and priorities are not optional,” Kaufman said.

Meyer Glitzenstein & Eubanks of Washington, a public interest law firm that focuses on environmental protection and government transparency, assisted on the case. Goulston & Storrs of Boston was pro bono counsel.

The SEC is reviewing the decision, according to an email from an agency spokesperson.

Oxfam and the Publish What You Pay coalition have been pushing for mandatory disclosures of company payments for natural resources around the world for years.

Oxfam filed a similar Boston federal suit in May 2012. The agency issued and adopted a rule that year, and Oxfam dropped the case that December.

But in late 2010, oil and gas trade association the American Petroleum Institute turned to different federal courts to fight the disclosure rule.

It filed cases in Washington federal court and the U.S. Court of Appeals for the D.C. Circuit. The Circuit Court threw out the case on jurisdictional grounds.

In July 2013, U.S. District Judge John Bates granted summary judgment to the institute and vacated the SEC’s final rule.

Bates wrote that the SEC “misread the statute to mandate public disclosure of the reports.” He also found that the agency’s decision not to allow any exemption for foreign law prohibitions was arbitrary and capricious.

The SEC did not appeal that ruling. The court did not allow Oxfam, which had intervened in the case, to file its own appeal.

In an email, Petroleum institute spokesperson Carlton Carroll wrote, “U.S. oil and natural gas companies have been leading the way to increase transparency in payments to foreign governments for over a decade. The SEC can issue rules that meet their legal obligations to promote transparency while also protecting firms’ international competitiveness.”

IMAGE: Headquarters of the U.S. Securities and Exchange Commission in Washington D.C. Photo: Diego M. Radzinschi/NLJ

For more on this story go to: http://www.nationallawjournal.com/id=1202736490824/Judge-Orders-SEC-to-Stop-Dawdling-on-Disclosure-Rule#ixzz3l9kzwQgU