For Immediate Release
WASHINGTON, DC – The U.S. Agency for International Development welcomes the approval by the Securities and Exchange Commission (SEC) of final rules implementing Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Section 1504, the so-called “Cardin-Lugar rule,” sets a new standard for transparency in the extractive industries. Under the rules issued by the SEC, oil, natural gas, and mining companies who are required to file annual reports with the SEC will have to disclose certain payments they make to governments for resource development on a project-by-project basis. Disclosed payments will be those made directly, or by any subsidiary, or entity under the control of the resource extraction issuer.
The oil, natural gas, and mining industries make critical contributions to global economic stability and prosperity. But, these industries often operate in countries with autocratic, corrupt, or unstable governments lacking transparency in their transactions. Indeed, some economists have found that the surplus arising from natural resource exports has, ironically, sometimes significantly reduced economic growth in resource-rich countries. This is why having resources can be a "curse" for some countries, said USAID’s Assistant Administrator for Economic Growth, Education and Environment Eric Postel. “As an Agency whose mission includes focusing on economic growth and the reduction of poverty, anything which relates to reducing this curse and increasing the transparency of revenues from resource exports is of strong interest to USAID,” he said.
Increased transparency regarding payments made by extraction industries to government officials, by country and by project, will provide critical information about country-specific, regional, and project-by-project activities. Citizens seeking to hold their governments accountable for effective management of their countries' resources need transparent information about the revenues relating to those resources. Implementation of Section 1504 will also complement other existing efforts, such as the Extractive Industries Transparency Initiative.
USAID is the U.S. Government’s principal international development agency. We look forward to working through USAID Missions and our partner organizations to help governments cooperate in the implementation of the new rules and to encourage other governments and regional organizations to adopt similar transparency standards.
Last updated: September 23, 2012