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US transparency group supports call for Exxon to come clean on global tax practices
Kaieteur News – US transparency and advocacy group, Financial Accountability and Corporate Transparency (FACT) Coalition is backing its member Oxfam – which filed a shareholders resolution against American oil giant, ExxonMobil and others requesting that they come clean on their international tax-practices.
FACT Coalition is an organisation that fights offshore tax abuses, promotes transparency in corporate ownership and operations, and advocates anti-money laundering policies.
On November 21, British advocacy group Oxfam had filed a ‘shareholder resolution’ which is usually a 500 word request submitted to a company by a shareholder asking the company to address an issue of concern. The resolution was filed against Exxon, Chevron, and ConocoPhillips calling them out on their alleged ‘secretive’ tax practices.
In their shareholder’s resolution, Oxfam stated that oil majors’ lack of transparency creates a material risk for long-term investors who want to safeguard against risks of reputational damage. “Worse still, these secretive practices undermine the public’s interest in a fair tax system, especially in Global South countries with the greatest tax revenue needs,” Oxfam said in a press release.
Oxfam’s resolution is to ask the companies to publish tax transparency reports in line with the tax standard of the Global Reporting Initiative (GRI), the world’s most utilised corporate reporting framework. The reports would include country-by-country reporting (CbCR) of certain company financial information, including revenues, profits and losses, and tax payments within each jurisdiction – critical information to understanding risks of profit shifting and tax avoidance.
Notably, the GRI-standard tax reports is the world’s most utilised corporate reporting framework. The reports would include country-by-country reporting of certain company financial information, including revenues, profits and losses, and tax payments within each jurisdiction – critical information to understanding risks of profit shifting and tax avoidance.
CEO of ExxonMobil, Darren Woods
On the backdrop of Oxfam’s shareholders resolution, FACT Coalition in a statement noted that, “Advocates for corporate transparency, including the FACT Coalition, have long argued that public country-by-country reporting (PCbCR) represents an important tool in the fight against multinational tax dodging and for investors seeking to allocate capital towards more sustainable profits and away from overly aggressive tax planning practices.”
According to FACT Coalition, earlier this year, two U.S. based extractive companies, Hess Corporation and Newmont Corporation, became the first large American MNEs to voluntarily publish international tax data in line with the GRI standards, following similar moves in recent years by the UK-based oil giants, Shell and BP, among others.
On the other hand, Exxon was named among three US oil majors who are lagging with their GRI standard tax-reports. This is according to Ian Gary, Director of FACT Coalition.
Kaieteur News had reported that Gary, who once worked with Oxfam, was quoted in their Press Release as disclosing that US Oil Giants, Exxon, Chevron and ConocoPhillips are lagging behind their peers with their GRI-standard tax reports. The Financial Director said, “US extractive companies Hess and Newmont publish GRI-aligned tax reports, as do international oil companies including Shell, BP, and Total,” adding that, “Exxon, Chevron, and ConocoPhillips are seriously lagging behind their peers.”
Oxfam’s move to get Exxon and others to come clean on their tax-practices comes at a time when Exxon’s subsidiary, Esso Exploration and Production Guyana Ltd (EEPGL) the operator of Guyana’s prolific Stabroek Block and its partners, Hess Guyana Exploration Limited, and CNOOC Petroleum Guyana Limited, are enjoying tax-free profits in Guyana.
This is due to the Production Sharing Agreement (PSA) Guyana signed onto with Exxon. Under the 2016 PSA, neither Exxon nor its affiliates pay taxes. In fact, Guyana has agreed to, under the taxation provisions, to pay ExxonMobil’s share of Corporation and Income Tax. As such, it would mean that Guyana foregoes each year, billions of US dollars. On top of this, documentation to this effect is then provided to the US based company allowing it to not have to pay any taxes in its home country for its earnings overseas.
Guyana’s Stabroek Block is 6.6 million acres (26,800 square kilometres) and has approximately 11 billion proven barrels of oil.
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