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EITI alarmed by ExxonMobil, other oil majors’ refusal to comply with principles
By Kiana Wilburg
Head of the Extractive Industries Transparency Initiative (EITI), Fredrik Reinfeldt, finds it troubling that USA oil majors such as ExxonMobil and Chevron have refused to come clean on payments made to the American government.
Reinfeldt says this behaviour is not only “unprecedented” but a “serious” matter. He intends to take this matter to the Board at its next meeting.
Reinfeldt’s statement comes in wake of a letter he received on February 7. The letter which was signed by various civil society bodies, notes that ExxonMobil and Chevron were members of the US-EITI Multi-Stakeholder Group from its creation in December 2011 to its disbandment in November 2017.
Both companies are members of the EITI International Board’s industry constituency and have served in that role, with a few brief exceptions, since its creation in 2003.
EITI Chair, Fredrik Reinfeldt
It was further noted that from its founding, EITI and its Standard have required comprehensive disclosure of material payments from companies to governments, including taxes. In fact, no EITI implementation has ever excluded the disclosure of tax payments.
However, in the US-EITI report issued in 2016, only 12 of the 38 eligible companies disclosed their taxes. In the USEITI report issued in 2015, one dozen of the 41 eligible companies disclosed their taxes. ExxonMobil and Chevron were among the companies that refused to disclose their tax payments in both cases.
The groups said that this is enough for EITI to remove the companies from the Board and even the EITI fold since their actions contradict the EITI standards.
In response to the group, the EITI Chair felt it necessary to state that companies supporting EITI commit to its Principles and subsequent implementation. He noted that reporting taxes is a fundamental requirement of EITI implementation.
The Chair said, “From March 2014 – November 2017, the United States implemented the EITI. A number of US companies refused to report in accordance with the procedures developed by the US EITI, including several EITI supporting companies (Chevron, ConocoPhillips, ExxonMobil, Hess and Noble Energy).”
He continued, “While it is not uncommon for companies to occasionally miss reporting deadlines, it is unprecedented that EITI supporting companies made a conscious decision not to report. It is serious when supporters of the EITI as a group undermine EITI implementation. The EITI does not have separate rules for countries, companies and civil society organizations represented on the EITI Board.”
The EITI Chair added, “The Articles of Association states that ‘The Board shall act in the best interest of the EITI Association at all times’ (Article 12). It is disappointing that Chevron and ExxonMobil, represented on the Board, did not provide the leadership expected from them by EITI stakeholders. I intend to report to the Board and discuss this matter at the upcoming meeting on 28 June.”
Reinfeldt said that he will not be recommending further action. He said this is especially as it relates to the call for the EITI Board to consider terminating these companies’ membership of the EITI Association.
“I consider it to be better for the realization of the EITI Principles that they remain supporters and members of the EITI Association. Jonas Moberg, EITI Executive Director, and I have been in contact with representatives for Chevron and ExxonMobil, the other companies that did not report and a number of those that signed the letter to me.”
The EITI official said that in those discussions, the commitment to support the EITI was reaffirmed. He noted too that there are other cases where the said companies have reported and participated actively and strongly in support of the EITI implementation.
He added, “I note that events in the United States have not been repeated elsewhere. I hope that all stakeholders can draw lessons from this situation and make sure that it does not happen again…”
As for its operations here, ExxonMobil has promised local authorities that there would be zero resistance to providing information on payments made to the Government. The American company says it intends to assist Guyana with its EITI compliance.
Sources
- (https://eiti.org/sites/default/files/documents/eiti_chair_statement_in_response_to_useiti_grievance_letter_0.pdf)
- (https://eiti.org/sites/default/files/documents/review_by_legal_counsel.pdf)
- (https://www.oxfamamerica.org/press/exxonmobil-and-chevrons-refusal-to-publish-us-tax-payments-unprecedented-says-chief-of-global-transparency-initiative/)
Picture saved as EITI
Caption: EITI Chair, Fredrik Reinfeldt
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