The federal court decision of US on a lawsuit proposed by Oxfam America to the US Securities and Exchange Commision which mandates the SEC to issue article 1504 of Capital Market and Consument Protection Reformation Act-Dodd Frank Act, in 30 days after the decision announced on September 2, 2015. Being agree with Oxfam, judges consider that without any reasonSEC has been retarded to stipulate the article that requires the oil and gas and mining companies to open the payment data.
Reflecting on the deadlines set by congress, the stipulationof the article 1504 of Dodd-Frank Act has been delayed for about four years. After being proposed in December 2010, the congress decided the deadline to stipulate the act is April 17, 2011, 270 days after the proposed date. . Unfortunately, when the commision adopted this article in 2012, the Association of United States Oil Companies consists of ExxonMobil, Shell, Chevron, BP proposed lawsuit to the District Court of Columbia with pretext there was an error procedural in articel of 1504. That’s why Oxfam Amerika sued the SEC to stipulate article 1504 in the District Court of Massachusetts, immidiately.
“We are ready to collaborate with SEC to provide information needed to issue the rules which follow the standard of global transparency which requires public report, being detail on project level,including detailed reports of every country without exception” said Ian Gary- Senior Policy Manager for Extractive Industries, Oxfam-United States of America. “It is also in line with market demand in other region to provide the information needed by citizen and investor, which followed by industry without destroying the competition” Ian added. This decision showed that one of the success of civil society advocacy in The US toregain The US commitment in order to promotetransparecny revenue in extractive industry, particularly related to disclosure of diss-agregate company’s payment data. Despite in fact similar rule have been implemented in many countries, such as in Norway, Canada, and European Union.
Maryati Abdullah, Coordinator of Publish What You Pay (PWYP) Indonesia emphasizes the coalition support for the implementation of these rules, one of them through global campaign with Oxfam network and Publish What You Pay. Maryati emphasized, “For Indonesia, the implementation of this regulation in The US is very beneficial for public and society in Indonesia to encourage the transparency, because the oil, gas, and mining companies listed in The US- which is also operatingin Indonesia. They are required to make reports about the company payments, including taxes, royalties, bonuses, dividens, and other costs with minimum US$ 100 thousand value, which is conducted for commercial purposes, such as licensing process, exploration, production, also export per year. The data of payment that must be disclosured not only for companies in The US, but also in every countries where the companies operate.
Rizky Ananda, a mining governance researcher in PWYP Indonesia, added “Companies are obliged to disclose their payment more detail including payment to the local government until related department, because the level includes a project by project. Indonesia is also one of countries that have implemented the EITI standard, through the Presidential Decree no. 26/2010 particularly for oil, gas, and mining companies.” Said Rizky. The implementation of this article will not only impact The US, but also other countries, especially rich of natural resources countries. From 100 biggest oil, gas, and mining companies in the world, 68 oil and gas companies and 40 mining companies can not escape from this disclosure of payment obligation. What make this interesting is, the report entity is also includes branch companies which operate in the world. Thus, Indonesia as a host country of these companies will get benefit” said Rizky.
From 79 blocks of oil and gas in Indonesia, some of them are managed by large companies which names are listed in the United States, such as Petrochina which manage Block of Bangko, Jabung, Selat Panjang, Tuban, Kepala Burung, and Salawati; Exxonmobil in North Sumatera Block B, TOTAL in Block of Mahakam, Sebuku, and Tengah; Chevron in Block of Rokan, Siak, W. Pasir, Ganal, Strait of Makassar and Rapak; Conoco Phillips in Block of Grissik, South Jambi B, and South Natuna B. Besides that, there are BP and CNOOC. And for mining companies, there are Freeport, Newmont, and Vale. The data of company payment that is given to the Indonesian government also includes the detail component to each department or agency of government should be included the reporting of each parent company to the US Securities and Exchange Commission.
Furthermore, “this report can be compared with the data owned by Indonesian government, to prove the value is correct or incorrect. If there are different findings, means there are loopholes in the revenue of extractive industry governance in Indonesia, both of leading to corruption or other abuses. And it needs to be followed up to optimize the performance of revenue,” Rizky added.
With a broad scope, the stipulation of article 1504 enables public to evaluate the performance of company by comparing the performance of companies with the same character, but operating in different area even different countries. Thus, it isclear that the appropriateness and payment accuracy made by company also the tariff of payment set by the government of a country. This is crucial considering the prompt payment become determinant factor of state revenue which becomes source of national development funding” added Maryati.