The suit, filed by the U.S. Chamber of Commerce, the American Petroleum Institute and two other business groups, says that the SEC exceeded its authority by adopting the final rule in August without weighing its cost-benefit, the Wall Street Journal reports.
The SEC, mandated by Dodd-Frank, said that the requirement would help those in oil-rich countries hold government officials to account for money received for oil and mineral rights.
The oil industry, however, holds that providing such information would provide valuable secrets to competitors.
“It was a well-intentioned provision in the Dodd-Frank law, but the SEC just overstepped and went well beyond what was necessary to support transparency,” American Petroleum Institute President Jack Gerard, who called the SEC’s approach “arbitrary and capricious,” said, according to the Wall Street Journal.
Under Dodd-Frank, all U.S.-listed oil and gas companies must disclose their royalties, fees and other payments to the U.S. and foreign governments for extracting oil, gas and minerals every year.
The law was attached to Dodd-Frank by a bipartisan group of senators who cited concerns about poverty in some oil-rich countries and pointed to corrupt officials preventing oil proceeds from reaching citizens.