The Republican-led U.S. Senate voted Friday to repeal a regulation requiring energy companies to disclose any payments made to foreign governments by a 52-47 vote.
The foreign payments rule of the Securities and Exchange Commission was part of the 2010 Dodd-Frank banking reform package, and its purpose was to avoid corruption by presenting payments and royalties made by oil, natural gas, coal and mineral companies.
This measure was approved two days after Rex Tillerson, former CEO of ExxonMobil and a strong opponent of the law, was confirmed as secretary of state.
“As Exxon CEO, Rex Tillerson did everything in his power to gut this law, because it doesn’t suit big oil’s corrupt business model," said Corinna Gilfillan, head of the U.S. Office of Global Witness.
"These deals deprive some of the world’s poorest people of oil wealth that is rightfully theirs. Given the president’s massive conflicts of interest and his administration’s broad attacks on regulation, it appears our institutions are increasingly being abused to further the business interests of a powerful few,” said Gilfillan.
The resolution will now go to President Donald Trump, who is expected to sign it.
The White House said this rule could put U.S. companies at a disadvantage against foreign competitors and would “impose unreasonable compliance costs on American energy companies that are not justified by quantifiable benefits.”
But the U.S. is not the only country to enact these types of regulations.
"Oil, gas and mining companies from other countries have already disclosed over $150 billion in payments under similar rules, meaning citizens can begin to hold their governments to account. If they can do it, you have to ask – what have the U.S. companies got to hide?” said Gilfillan.
Isabel Munilla, policy advisor for extractive industries at Oxfam America, said this decision will strongly affect citizens as it covers up illegal actions by big companies.
“Voting to roll back basic transparency rules provides zero benefit for the public but will instead allow corrupt elites to continue to stuff their pockets with oil money and steal from their citizens,” said Munilla.
Senate Banking Committee Chairman Mike Crapo said Thursday that the SEC’s research didn't show a strong connection between transparency and improving the lives of citizens in those countries.
“Unlike the potential benefits, though, the costs of this rule are reasonably certain,” said Crapo. “The SEC estimated up to $700 million in initial costs, and up to $590 million on ongoing annual costs.”
Crapo also said small companies would be hurt, not only major oil companies.
Senator Sherrod Brown said the resolution was a vote for corruption.
“The rule they’re trying to repeal protects U.S. citizens and investors from having millions of their dollars vanished into the pockets of corrupt foreign oligarchs,” he said. “This kind of transparency is essential to combating waste, fraud, corruption and mismanagement.”