Why Trump's New Oil & Gas Rule Is So Dangerous
I know it's hard to keep up with President Donald Trump lately, who's been doling out autographs with the fervor of a washed-up baseball player in need of a quick buck. But one thing to pay attention to is his dangerous new oil and gas rule, which overturns the bipartisan Cardin-Lugar amendment, a Securities and Exchange Commission regulation enacted in 2010 as part of the of the Dodd-Frank Wall Street reform bill. It sounds pretty boring, I know, but stay with me here.
The amendment required oil, gas, and mining companies listed on U.S. stock exchanges to disclose any and all payments they made to foreign governments, which is eminently reasonable. Trump was able to scrap it by using the Congressional Review Act of 1996, which allows a new president (in conjunction with Congress) the power to revoke rules and regulations enacted by the previous administration. It's only been used once before, but House Speaker Paul Ryan (R-Wis.), said on Tuesday that this was "the first of many Congressional Review Act bills to be signed into law by President Trump," according to the Washington Post. He also claimed that the bills will "provide relief for Americans hurt by regulations rushed through at the last minute by the Obama administration," though it's hard to see how that applies in this case.
A White House press release on the bill referred to the Cardin-Lugar amendment as a "costly impediment to American extraction companies helping their workers succeed," and upon signing the bill, Trump remarked, "The energy jobs are coming back. Lots of people going back to work now." But the only workers it appears to benefit are CEOs, and the "people going back to work" won't be Americans. Oil, gas, and mining companies now have an easier path to making unchecked payments to foreign officials in order to procure drilling rights, like the ones that were repeatedly investigated in the early 2000s, before Cardin-Lugar was enacted.
And foreign citizens won't necessarily benefit, either, as shown by a court case between ExxonMobil and Indonesian villagers that's been dragging on for a decade and a half. The villagers allege that their family members were murdered, tortured, and sexually assaulted by members of the Indonesian military, acting on behalf of the oil company. ExxonMobil has called the claims "baseless," and in a statement obtained by Reuters, said, "The company strongly condemns human rights violations in any form." The case is still ongoing, and the latest motions were ruled in December 2016.
A spokesperson for ExxonMobil provided Romper with the following statement:
We strongly condemn human rights violations in any form. ExxonMobil’s approach to human rights is consistent with the goals of the United Nations Guiding Principles on Business and Human Rights. We comply with all applicable laws and regulations, and have extensive human rights training where appropriate across our organization. ExxonMobil categorically denies any complicity in any human rights abuses committed by Indonesian soldiers during an Indonesian civil war. The company has fought these baseless claims for years in litigation and, in fact, filed a new motion in the matter in March 2016 demanding that the plaintiffs’ attorneys provide sworn declarations concerning witness payments and the withholding of or tampering with evidence, or spoliation.
The company's role in Aceh was that of a contractor to operate the Arun Gas Field for the government. The government approved all aspects of the operation including annual budgets, work programs, and employee policies. All facilities, equipment, and physical assets in the Arun Field were the property of the government. While operating in Aceh, ExxonMobil did a number of things to help the local community, including building roads, hospitals and schools.
In less severe cases, unchecked deals between U.S. energy companies and foreign governments can be a financial detriment to locals. If and when sanctions against Russia are lifted, this could also lead to further deals like the one now-Secretary of State Rex Tillerson made between ExxonMobil and the state-owned Rosneft oil company. During his time at ExxonMobil, Tillerson himself lobbied against Cardin-Lugar. Although Tillerson is no longer employed by the oil company, he does still hold $218 million in stock.