ExxonMobil pledges to come clean on payments to Guyana GYEITI
Petroleumworld 04 23 2018
USA oil conglomerate, ExxonMobil has a documented history of failing to reveal information on payments it makes to governments around the world.
But it has committed to come clean on payments to Guyana's Administration. This pledge was made by the USA Company to Head of the Guyana Extractive Industries Transparency Initiative (GY-EITI), Dr. Rudy Jadoopat.
In an interview with Kaieteur News, the Head of the EITI local chapter said that he is aware of the challenges other nations have faced in trying to access information about payments made to governments. He said that ExxonMobil was approached on the matter and the entity gave all assurances that there would be full compliance
Jadoopat said, They promised that there would be no obstacles and we are looking forward to cooperation from the company.
CASE OF NIGERIA
The Extractive Industries Transparency Initiative (EITI), an international body that requires disclosures on moneys governments receive from extractive sector appears to be of little help to Nigeria. At least this is the case when it comes to payments made to the Government by USA oil giant ExxonMobil.
As a company based in the U.S., ExxonMobil is not required to release a Payment-to-Government report. However, it is clear from analyzing disclosures from other oil and gas companies engaged in consortia with ExxonMobil that the company makes significant payments to Nigerian government entities.
This is according to the Natural Resource Governance Institute (NRGI).
Assuming payments are made proportionally to the company's equity share, NRGI said in one of its reports that one can estimate that in 2016, the company paid USD$39 million in taxes and royalties for the Usan project and between USD $212 and $223 million in taxes and production entitlements for the Bonga project.
The transparency group said that these sizable revenues cover only two projects in which ExxonMobil has an interest, but point to the company's significant role as a source of government revenue.
It noted that ExxonMobil, through its Nigerian subsidiary Mobil Producing Nigeria Unlimited (MPN), also has several operations for which this type of estimation is not possible.
The Institute said that while the company is under no obligation to release a Payments to Government report, it is clear that if it did so voluntarily, Nigerian citizens would be better equipped to hold the government accountable for the natural resource revenues it receives.
NRGI also stated that ExxonMobil declined when, as part of the research process for its briefing, it asked the company to voluntarily report 2016 payment data for Nigeria in line with data disclosed by other companies covered in this document.
Guyana is the latest of the EITI. The Government is convinced that ExxonMobil would respect the disclosure rules of EITI and corporate with Guyana in this regard.
REMOVAL FROM EITI
The refusal of USA oil giants, ExxonMobil and Chevron to disclose their tax payments in the USA has resulted in civil society groups calling for their immediate removal from the Board of the Extractive Industries Transparency Initiative (EITI).
The civil society organizations made these sentiments pellucid in a letter to EITI Chairman Fredrik Reinfeldt.
In the letter, it was explained 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.
It was further noted that from its founding, the 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 US-EITI report issued in 2015, 12 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 civil society groups said that in during the December 2015 US-EITI MSG Meeting, an ExxonMobil representative provided the following explanation of his company's decision not to disclose taxes through the US-EITI process:
Knowing that income tax reporting will soon be required under Section 1504 of the Dodd-Frank Act, companies may have chosen to wait until that rule was finalized and the requirements clearer. (ExxonMobil representative) added that many of these companies have exercised leadership in EITI around the world, and are very committed to US-EITI and to tax reporting, but are awaiting the finalization of the SEC's rulemaking.
In spite of ExxonMobil's response, the groups noted that a May 2017 Interior Department Inspector General assessment of US-EITI points out that tax data can actually be disclosed.
They also noted that Dallas-based Kosmos Energy has voluntarily disclosed its U.S. tax payments for years, and BHP Billiton, one of the largest mining companies in the world, voluntarily disclosed its tax payments to the U.S. government before it was required to do so by the EU Directives.
The civil society groups noted, This issue could have been avoided if there was a standard that required companies to practise what they preach and disclose their payments fully as a condition of being an EITI supporting company or EITI Board member. In the absence of this, and in light of the ongoing circumstances outlined, we recommend strongly that these companies be removed from the EITI Board for violating the EITI Code of Conduct, as well as the spirit of EITI, thus endangering the EITI Standard.
The letter sent to the EITI Chairman received the blessings of Danielle Brian, US-EITI Co-Chairman and Betsy Taylor, Executive Director of Livelihoods Knowledge Exchange Network (LiKEN) and US-EITI Representative among others.
(To read more on this issue, follow the link: http://www.pwypusa.org/pwyp-news/civil-society-organizations-call-on-exxonmobil-and-chevron-to-be-removed-from-the-eiti-board/).
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