New mandatory disclosures are designed to expose corruption in the oil, gas, and mineral extraction industry. Disclosure omissions and disclosure fraud can be the basis of SEC Bounty Actions that can result in large financial rewards for oil and gas professionals that expose large scale corruption including bribes to foreign governments to obtain drilling leases, mineral leases, and other lucrative contracts. Oil and gas professionals that are aware of disclosure fraud are encouraged to contact an oil and gas professional whistleblower lawyer who can confidentially review a potential bounty action and confidentially file the bounty action on behalf of the whistleblower.
Dodd-Frank Act Rulemaking: Specialized Corporate Disclosure
Title XV of the Dodd-Frank Wall Street Reform and Consumer Protection Act contains several specialized disclosure provisions. For example:
- Section 1502 requires persons to disclose annually whether any conflict minerals that are necessary to the functionality or production of a product of the person, as defined in the provision, originated in the Democratic Republic of the Congo or an adjoining country and, if so, to provide a report describing, among other matters, the measures taken to exercise due diligence on the source and chain of custody of those minerals, which must include an independent private sector audit of the report that is certified by the person filing the report. Certain aspects of this rulemaking will require consultation with other federal agencies, including the State Department, the Government Accountability Office, and the Commerce Department. Persons are not required to comply with these rules until their first full fiscal year after the date on which the Commission issues its final rules.
- Section 1503 requires any reporting issuer that is a mine operator, or has a subsidiary that is an operator, to disclose in each periodic report filed with the Commission information related to health and safety violations, including the number of certain violations, orders, and citations received from the Mine Safety and Health Administration (MSHA) among other matters. Issuers must also disclose in their Form 8-K reports the receipt from MSHA of any imminent danger orders or notices indicating that a mine has a pattern or potential pattern of violating mandatory health or safety standards.
- Section 1504 requires reporting issuers engaged in the commercial development of oil, natural gas, or minerals to disclose in an annual report certain payments made to the United States or a foreign government. This information must be provided in an interactive data format, and the Commission must make a compilation of the information available online. Issuers are not required to provide their disclosures until their first annual report ending at least one year after the date on which the Commission issues its final rules.