Extracting raw materials from the earth can be a dirty business, and not just because of environmental damage. But there are new job opportunities for financial professionals in keeping the industry clean.
Miners and oil companies often operate in countries where corruption is commonplace and legal structures are weak. The Dodd-Frank federal financial regulation overhaul passed this year called for greater transparency about payments that natural resource firms make to foreign governments.
That could mean a lot of time spent on preparing the disclosures. On Dec. 15, the Securities and Exchange Commission voted to propose rules that would require any company that already files an annual report with the SEC and is involved in extracting oil, natural gas or minerals to reveal what taxes, royalties, fees, bonuses and other payments it has made to governments every year.
Moreover, the rules call for companies to say what currency the payments were made in, which government got the payments, and what project the payments related to.
The rules are expected to apply to more than 850 companies, according to an assessment of the potential impact. And the cost is projected to be close to $12 million for what the assessment calls “the services of outside professionals” (in addition to close to 53,000 hours of time from in-house personnel).
The SEC is calling for comments about the proposed rules by Jan. 31. If the plan stands, though, hundreds of companies may need help complying.