Campaigners alarmed as president expunges element of Dodd-Frank Act. Energy companies no longer need disclose payments to foreign governments
Donald Trump moved on Tuesday to expunge rules aimed at forcing oil companies to disclose payments made to foreign governments in order to secure lucrative mining and drilling rights.
The rules, called the Cardin-Lugar regulations, were established under the Dodd-Frank Act, the wide-ranging financial regulations brought in after the last financial crisis. Energy industry executives, including the former Exxon boss and now secretary of state, Rex Tillerson, have lobbied hard against the rule, arguing it gives global rivals a competitive edge.
The rules aimed to help fight corruption, and critics charge that Tuesday’s move handed “an astonishing gift to the American oil lobby”.
“It’s a big deal,” Trump said to reporters in the Oval Office as he signed the resolution. “The energy jobs are coming back. Lots of people going back to work now.”
Representative Bill Huizenga, the repeal’s lead sponsor, said: “Over 20 years, there’s been 56,000 rules that have been put in place, with very little legislative input or oversight, and it’s time that changed.”
The repeal was made using the Congressional Review Act (CRA), which allows an incoming president to overturn new federal regulations. It is the first time the CRA has been used to repeal a regulation in 16 years.
Trump’s move comes as oil company deals have come under intense scrutiny. Late last year, Russia sold a 19.5% stake in its giant oil company Rosneft, but the full identities of those who bought it are unknown.
Last year, the Guardian revealed that Exxon, then led by Tillerson, was under investigation by Nigeria’s economic and financial crimes commission over lucrative oil rights it secured in 2009 by beating out China’s fourth-largest oil producer, despite apparently underbidding its rival bid by $2.25bn.
“Trump has given an astonishing gift to the American oil lobby. Oil, gas and mining companies listed across the EU, including Russian companies, have already disclosed $150bn of payments in resource-rich countries, with no ill effects. This makes a mockery of claims by US oil companies such as Exxon that greater transparency would damage companies’ competitiveness. If the European companies can do it, you have to ask – what are US companies trying to hide?” said Zorka Milin, senior legal adviser at the advocacy group Global Witness.
Eric LeCompte, executive director of the religious development organization Jubilee USA, said: “In the short term, we lost a tool that can help track the billions of dollars lost to corruption and tax evasion in the developing world. Now we need to be sure that the new rule that the Securities and Exchange Commission writes will be a rule that can still stop corruption.”
Jubilee USA, which represents over 650 faith groups, fought for the passage of the Cardin-Luger rules in 2010 as a way of tackling bribery and corruption in developing countries that it argues exacerbate conflict and poverty. “Improving financial transparency and ending global poverty are two sides of the same coin,” said LeCompte.