Archive for the ‘Confidential Business Information’ Category

SEC Requires Disclosure of Energy Company Payments to Foreign Governments

The Securities and Exchange Commission on Wednesday approved rules requiring oil and mining companies to disclose payments made to foreign governments. The rule, under Section 1504 of the Dodd-Frank financial reform law (see the full text here through our Dodd-Frank Tracker), requires SEC-listed oil, natural gas, and mining companies to reveal payments to governments related to projects in their countries, including the type and amount of each payment and their totals every year. Money for production licenses, taxes, royalties, among other payments, fall under the rules.

The SEC vote was 2-1 for the rule, but a two-year battle has been raging behind the scenes. Human-rights groups and the oil industry threw their efforts at influencing the final rule. Groups like Oxfam American and the Revenue Watch Institute joined with other anti-poverty and human rights groups to build public pressure on the SEC to approve the draft rules proposed in 2010. They argued that greater disclosure helps ensure that revenues from energy and mining provide public benefit. Secretary of State Hillary Clinton, noting that the EU is considering similar provisions because of Section 1504, lent her weight toward strong rules.

Oil companies, through the influential American Petroleum Institute, demanded that the SEC scale back the rules from their draft phase. They said the rules would make them less competitive, especially when competing with state-owned firms like Russia’s Gazprom and the China National Petroleum Company. They sought provisions such as allowing aggregate payment information by country, and exemption if host countries prohibited such disclosure.

Both sides agree that the goal of the rules is worthy: The “resource curse,” leaving many energy-rich countries in Africa impoverished by corruption and conflict, must be addressed. In favor of the rule, Luis Aguilar, Democratic SEC member, called on the late Supreme Court Justice Louis Brandeis’s saying that “sunlight is the best disinfectant.” But Republican member Daniel Gallagher argued that an SEC rule is a strange way to achieve social and foreign-policy goals.

The rules don’t leave much middle ground, and the SEC estimates that the rule will carry industry-wide compliance costs of up to $1 billion initially, with annual costs between $200 million and $400 million. The only bone thrown to energy companies is a small one: By leaving out any specific definition of the word “project” (emphasized in the section of the rule entitled ‘Definition of the word “project”’), companies have some discretion in applying the rule to their business.

EPA Releases First Batch of GHG Emissions Data

Image from Andreas Menge. Some rights reserved.

The EPA announced yesterday that they had made available for the first time greenhouse gas emissions data “reported directly from large facilities and suppliers across the country.”

Data included in the interactive tool so far include 2010 emissions from facilities that emit 25,000 metric tons or more per year of GHGs, reported to the EPA as of 12/16/2011. The tool lets you easily narrow by location, sector, facility name, type of greenhouse gas emitted, and amount of emissions.

Once you’ve narrowed it to a few facilities, you can pick one to see even more details. For instance, Seattle Steam Co, a power plant just a few miles from Knowledge Mosaic offices, had total emissions of 82,701 MT CO2e in 2010.

It’s a noble effort for a public agency, and the user interface is at times both slick and clunky. Using the filters is fairly straightforward, though navigating through the interactive map is rather difficult (unidentified numbers pepper the screen, and you are inadvertently jerked in, out, and around the state as you try to zoom in).

If you want to skip past the pyrotechnics and get straight to the data, you can always download it directly into excel here. Currently only summary data (“the most important, high-level information reported by direct emitters and suppliers”) is available, but the full set of data should be available soon.

How exactly confidential business information (which raised quite a stir here) from various sectors will be treated under the GHG reporting program remains to be seen. You can follow CBI developments here.

EPA Chips Away at Confidential Business Information

Photo by puamelia. Some rights reserved.

You can now know precisely which chemicals were administered to which laboratory rats and rabbits!

In what they are calling an “unprecedented” action, the EPA yesterday announced that they have made public the identities of more than 150 previously confidential chemicals mentioned in 100+ health and safety studies.

Under Section 8(e) of the Toxic Substances Control Act (15 U.S.C. §2607(e)), companies that manufacture, process, or distribute chemicals are required to provide notices to the EPA immediately if they learn that any of their chemical substances present a “substantial risk of injury to health or the environment.” While such reports would understandably reference the chemicals under scrutiny, Section 14 of the TSCA (15 U.S.C. §2613) allows said companies to omit the name of the chemical in the public version of these reports (and other types of studies) if they “believe” that information is “entitled to confidential treatment.” (Not a particularly stringent rule, eh?)

Over a year ago, the EPA began to ramp up their fight against unwarranted Confidential Business Information (CBI) claims, beginning in January of 2010, with the publication of new guidance outlining updated practices for reviewing submissions under section 8(e) for CBI claims “of chemical identities listed on the public portion of the TSCA Chemical Substances Inventory.” The guidance was followed by another Federal Register Notice in which the EPA announced that they would generally “deny a confidentiality claim for chemical identity” in health and safety studies. The new practices were intended to increase transparency by making “more health and safety information available to the public.”

Around the same time, the Assistant Administrator of EPA’s Office of Chemical Safety and Pollution Prevention sent a letter to industry trade associations, challenging them “to reduce the voluminous claims” of CBI that the industry has made. While such letters prompted some companies to voluntarily initiate declassifications of CBI, not all companies were eager to do so. In February of 2011, the EPA notified five companies that their previous CBI claims were “clearly not entitled to confidential treatment under § 14 of TSCA,” and that the EPA intended to make the information public.

In March 2011, the EPA began to declassify CBI in health and safety studies published on the EPA’s website. As of June 8, 2011, more than 100 studies had received the declassification treatment – you can see those studies here.

While the reports often contain the original language requesting confidential treatment (“Disclosure of product composition would be of benefit to competitors and would harm our Company’s ability to enable sell end products made utilizing the material whose composition is being claimed as confidential.”Report #8EHQ-92-4171), they have since been updated – by the addition of a few pages at the beginning of the document – and rescanned to indicate the declassification in some manner. (“After reconsidering the substance of the referenced TSCA 8(e) submission, Rhodia Inc. hereby agrees to declassify from confidential business information to public information all of the bracketed information identified in and redacted from the Public Notice Copy of this filing.” Report #8EHQ-91-1708)

(PETA members may want to refrain from browsing the studies, which go into detail about the administration of said declassified chemicals into various animals’ eyes. What really kills me is one such narrative emphasizing that “the test article was instilled into the eye by gently pulling the lower lid away from the eyeball to form a cup into which the test article was deposited.” (emphasis added) Regardless of how gently the lid was handled, it didn’t stop the “blistering of eyelid” by said “test article.”)

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