The Securities and Exchange Commission (SEC) wants oil and mining companies doing business overseas to reveal payments (read: bribes) they’re making to foreign governments. Not surprisingly, the industry is fighting the new federal requirement, which is close to becoming law.

 

According to the American Petroleum Institute, the SEC’s rule would leave U.S. natural resource companies in a tough spot. Disclosing payments to foreign rulers would put American executives at odds with laws in other nations forbidding such disclosure—which is why the oil lobby is pushing the SEC to include an exception allowing businesses to avoid revealing payments in certain instances.

 

But proponents of the new requirement say oil and mining companies may be exaggerating the problem. They point to the Brazilian oil company, Petrobras, which reportedly told the SEC that it knew of no payment disclosure prohibitions in any of the 29 countries in which it operates, including Angola, which is notorious for squeezing bribes out of foreign companies extracting that country’s natural resources.

 

Libya is another example of a government trying to shake down corporations. The regime of Muammar al-Gaddafi demanded American and European oil companies help his government pay the $1.5 billion legal settlement it owed for the Pam Am Flight 103 bombing over Lockerbie, Scotland. Some executives called the demand unthinkable, according to The New York Times. “But some companies, including several based in the United States, appeared willing to give in to Libya’s coercion and make what amounted to payoffs to keep doing business,” wrote the Times.

-Noel Brinkerhoff

 

Oil Majors, Miners Divided on U.S. Corruption Rules (by Ed Stoddard, Reuters)

Evidence Undercuts Oil Companies’ Argument That Disclosures Would Violate Foreign Laws (by Marian Wang, ProPublica)

Shady Dealings Helped Qaddafi Build Fortune and Regime (by Eric Lichtblau, David Rohde and James Risen, New York Times)