A Wall Street mandate launched by the Securities and Exchange Commission (SEC) in 2012 requiring oil companies to disclose payments made to foreign hosts has now become a GOP target. The disclosure measure enacted by the 2010 Dodd-Frank finance reform will certainly combat the financial corruption in the oil companies, deterring them from slyly socking away any “oil money intended for a nation’s poor” and force them to maintain financial responsibility, said provision supporter Richard Lugar (R-Ind.) in 2010.
The provision pleased human rights and anti-poverty groups believing that it “will help ensure the public in these nations benefits from their natural resource wealth” when it takes effect at the start of the fiscal 2014 year.
Now GOP representatives and oil companies are scrambling for an appeal to the SEC measure as there are talks to strike a deal with Mexico concerning continental shelf oil reserves. The Dodd-Frank rule will surely blockade this relationship. Doug Lamborn (R-Colo.), who is financially supported by the auto industry and wanted to dash into cultivating America’s shale oil resources in 2012, is heading a House subcommittee that reviewed the bill yesterday.
Those supporting legislation on the Dodd-Frank measure argue that allowing an industrial arrangement between America and Mexico will boost the economy and create jobs for Americans. “U.S. firms could lose business, U.S. jobs might not be created and potential revenue to our government could be lost,” said John Felmy, the chief economist with the American Petroleum Institute (API), when speaking about the Dodd-Frank provision.
What supporters like Felmy fail to recognize, however, is that Mexico’s government has a long history of struggling with corruption, not to mention, high levels of violent conflict within its borders. Stanford professor and expert on international relations Terry Karl indicates the problems of the resource curse asserting that “oil dependent countries…eventually become among the most economically troubled, the most authoritarian, and the most conflict-ridden in the world.” These issues in Mexico are indicative of the resource curse in other resource-rich countries, to which the Dodd-Frank rule sought to combat.
The Dodd-Frank rule seems to be the only saving grace to preserve Mexico’s already volatile country and will most certainly continue to hold oil companies accountable for any dirty deeds. This proposed GOP legislation is yet another way large corporations are seeking to increase their bankrolls at the expense of those lower on the socio-economic totem pole.
Joshua de Leon is a writer and researcher with Ring of Fire.