TRUMP ADMINISTRATION SCRAPS ANTI-CORRUPTION LEGISLATION ON OIL AND GAS
A portion of the Dodd-Frank Act, considered an important element of curbing corruption in the oil and gas sectors, has been dismantled by a senate vote and support from President Donald Trump.
Originally published as part of Centurion Knowledge Series on February 28, 2017
On Feb. 14 2017, President Donald Trump handed the American oil, gas and mining industry a gift-wrapped Valentine, when he signed off on the U.S. Senate’s action to scrap an anti-corruption measure that requires oil and mining companies to disclose their payments to the United States or to foreign governments for commercial developments.
This rule, implemented by the United States Securities and Exchange Commission (“SEC”), was mandated in 2010 by the Wall Street Reform and Consumer Protection Act, better known as Dodd-Frank. The Dodd-Frank Act is a federal legislation passed in the aftermath of the 2008 financial crisis that places regulation of the financial industry in the hands of the federal government. The legislation created financial regulatory processes to limit risk by enforcing transparency and accountability.
The rule was devised by the SEC “to advance U.S. policy interests by promoting greater transparency about payments related to resource extraction.” It basically required and mandated US public companies involved in the exploration and production of oil, gas or minerals abroad, to disclose in an annual report, any payments made to a foreign government or the U.S. federal government.
The U.S. Senate voted 52–47 to nix the SEC legislation that requires energy companies to disclose payments to governments. Trump signed the action into law in mid-February, and also issued an Executive Order calling for the Dodd-Frank regulation to be reviewed.
The various rules and measured implemented by the Act made the system safer and ensured that banks halted proprietary trading and kept more capital on hand, in order to prevent a financial crisis of the sort the world witnessed in 2008.
The particular measure in contention here has, since its inception, been heavily contested by US energy companies, most particularly ExxonMobil, whose former chief executive officer, Rex Tillerson, is…