(Financial Times) Disclosure of government payments mandated

(Financial Times) Disclosure of government payments mandated

Shahien Nasiripour and Tom Burgis August 22, 2012
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Oil and mining groups with US listings will be forced to disclose details of their payments to foreign governments after US regulators rejected most of the industry’s efforts to water down new transparency rules.

Oil and mining groups with US listings will be forced to disclose details of their payments to foreign governments after US regulators rejected most of the industry’s efforts to water down new transparency rules.

The rules, intended to combat corruption and help make rulers of resource-rich nations more accountable to their people, will affect companies such as ExxonMobil, BP and Rio Tinto.

They will also oblige manufacturers such as Apple to verify whether they use so-called conflict minerals from war-torn central Africa in their products.

“This represents a milestone for the millions of impoverished people who live in resource-rich countries,” said Tutu Alicante, an activist from Equatorial Guinea, a west African petro-state whose rulers have been denounced by rights groups and US investigators for corruption.

The rules, narrowly adopted on Wednesday by the Securities and Exchange Commission, were called for under the 2010 Dodd-Frank Act on US financial reform.

Investors including George Soros, philanthropists such as Microsoft chairman Bill Gates and companies including Boeing, Royal Dutch Shell and Hewlett-Packard were among the thousands of parties who lobbied the SEC on the new rules.

The American Petroleum Institute, the US oil industry lobby group, warned that disclosing payments to foreign governments was like “giving [out] the formula for Coca-Cola” and would leave US-listed groups at a disadvantage.

Simon Taylor, director of Global Witness, an anti-corruption group, said that if companies had “a concern about being disadvantaged then they should be joining us in trying to make a serious, meaningful global standard”.

The SEC rejected industry calls for some secretive countries, including Qatar and Angola, to be exempted from the rules.

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