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A plea to the SEC for Section 1504 rules — stand up to Big Oil

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After four decades of tyrannical rule by Col. Muammar el-Qaddafi, financed largely by our country’s oil wealth, Libyans have taken steps this summer toward a true democracy. Last month, we got to vote in legislative elections, and this month we experienced the first peaceful transfer of power, from the Transitional National Council to a new national assembly, in our country’s modern history.

While we are grateful to the Western countries that helped us topple Colonel Qaddafi last year, something perverse is happening in those countries now. Oil industry lobbyists are using their influence in Washington and Brussels to try to undermine transparency measures that could help prevent future tyrants from emerging. That must not be allowed to happen…

If we are to transform Libya, we must not only investigate the past but also reform the whole relationship between the energy industry and our government. We need to ensure that bidding is fair and open, that deals are transparent and aboveboard and that revenues are used properly. Public disclosure and legislative oversight of contracts and payments are crucial.

We cannot meet these goals without help from abroad. Colonel Qaddafi’s rule depended on the collusion of powerful foreign allies who would turn a blind eye to blatant corruption deals involving international oil companies and his regime.

America can help prevent such corruption from happening again.

The Dodd-Frank overhaul of Wall Street regulations…included a provision, Section 1504, that requires American and foreign companies that are registered with the Securities and Exchange Commission to disclose — country by country and project by project — how much they pay governments around the world for access to their oil, natural gas and minerals…

…The commission has yet to finalize the rules but is scheduled to take up the matter on Wednesday, at a hearing in Washington. Some of the world’s largest oil and gas companies — along with industry groups like the American Petroleum Institute — are trying to water down the regulations or delay them from taking effect. Some are proposing to exempt resource-extracting companies from having to comply if a foreign government objects, an idea I think of as a “tyrant’s veto.” The industry also claims that complying with the tough disclosure requirements will be costly and may place companies at a competitive disadvantage — but these arguments have been thoroughly discredited, making it hard not to conclude that many would simply prefer to carry on operating in secret…

Having helped Libya to overthrow a tyrant, the United States and the European Union can now help win the peace — by committing themselves to strong transparency standards for energy companies. In Libya, we don’t want our oil resources to bolster new tyrants, and the world shouldn’t either. When tyrants control energy supplies and gun down their own citizens, they invite only rebellion, military intervention and oil-supply shocks. We want a stable, prosperous country under the rule of law, in which citizens benefit from their natural resources and hold their leaders to account.

As a Libyan patriot, Najwa al-Beshti wants the SEC to ignore lobbying from the oil, gas and mineral industries and to issue the requested rules for Section 1504.

Overdue.

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Written by Ed Campbell

August 19, 2012 at 6:00 pm

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