Despite calling their decisions to not report tax information both “unprecedented” and “disappointing,” the chairman of Extractive Industries Transparency Initiative said Wednesday that he would not recommend Chevron and ExxonMobil be removed from the initiative.
EITI is a “global standard to promote transparent and accountable management of natural resources,” and includes 51 implementing countries, according to the initiative’s website.
Several US oil and gas companies — including Chevron, ExxonMobil, ConocoPhillips, Hess and Noble Energy — have publicly supported EITI, but also refused to disclose certain tax payments.
“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,” EITI chairman Fredrik Reinfeldt said Wednesday in a statement. “It is serious when supporters of the EITI as a group undermine EITI implementation.”
In February, transparency advocates sent a letter to Reinfeldt urging him to remove ExxonMobil and Chevron from the EITI board for their refusal to disclose their tax payments while the US was implementing EITI standards from March 2014 through November 2017.
They wrote that this constituted a “repeated and willful violation” of EITI’s code of conduct and “an act of bad faith that is counter to the spirit of the EITI movement itself.”
Reinfeldt said he would be discussing the issue with the EITI board June 28, but would not be recommending further action. He said Chevron and ExxonMobil should remain in EITI. “I consider it to be better for the realization of the EITI Principles that they remain supporters and members of the EITI Association,” Reinfeldt said.
But EITI could still terminate membership of Chevron, ExxonMobil and other companies at their June 28 meeting. “Chevron has a long-standing commitment to promoting revenue transparency,” Sean Comey, a Chevron spokesman, said in a statement. “We have participated in the Extractive Industries Transparency Initiative since its inception and we are the longest continuous serving board member. Chevron was actively involved in US EITI, and reported payments to the Department of Interior.”
William Holbrook, an ExxonMobil spokesman, said the company has been an active participant in EITI since it was created in 2003 and said the company complies with all existing tax disclosure laws and regulations.
“Corporate tax returns in the United States are confidential and not subject to public disclosure,” Holbrook said. “They contain complex, proprietary and competitive information that nearly all companies choose to keep confidential, a protection provided by US law. The US Internal Revenue Service was explicit in its direction to the USEITI that corporate tax reporting in the US would be strictly voluntary.”
Holbrook said it was “unfortunate that certain members are attempting to undermine an ongoing dialogue and the EITI organization itself by attempting to remove other committed members who only share differing views of how to advance global transparency objectives.”
In November, the Trump administration formally pulled the US out of EITI. The Trump administration had decided to leave EITI after several companies told Interior that they would not be providing tax payment disclosures to the agency, one of the transparency effort’s key requirements.
In February 2017, President Donald Trump repealed Section 1504 of the Dodd-Frank Act. The rule, which was challenged in court by the American Petroleum Institute, would have required all companies traded on US exchanges and involved in the commercial development of oil, gas or minerals to disclose payments made to any government and file annual reports with the agency. The rule was aimed at combating corruption by foreign governments and making all payments by US-traded companies transparent. PLATTS
