On the one hand, they have touted their anti-corruption bona fides by pointing to their membership in the United States Extractive Industries Transparency Initiative (USEITI), an organization they voluntarily joined in 2011 promising to disclose publically all their payments to the U.S. government, including taxes. At the same the time, the pair, both directly and through their powerful industry lobby, the American Petroleum institute (API), had been working hard to undo the Cardin-Lugar anti-corruption amendment.
This legislation, passed in 2010 and co-sponsored by Sen. Lugar and Sen. Ben Cardin (D, Md.), requires all U.S.-listed oil and mining firms (which includes a number of large foreign companies) to report their payments to governments worldwide. Europe and Canada soon followed suit, thus establishing Cardin-Lugar as an international standard and leveling the playing field.
The corporations’ duplicity was exposed last November, following their successful campaign to repeal the Cardin-Lugar regulation in February, 2017, when they sank the USEITI program by refusing to disclose their U.S. taxes as they had agreed to do.
So today, the NGO members of the now-defunct USEITI demanded that ExxonMobil and Chevron be kicked off the international board of EITI, where they have served since 2003. In a letter to the chairman of the Oslo-based EITI, they accused the two companies of “repeated and willful violation of the EITI Code of Conduct” and other EITI procedures they had promised to follow. (Full text: http://www.pwypusa.org/pwyp-news/civil-society-organizations-call-on-exxonmobil-and-chevron-to-be-removed-from-the-eiti-board/ )
Their actions not only torpedoed USEITI, the letter said, “but damaged the credibility of the [EITI] Standard and of the EITI both in practice and in the eyes of the global community.” The letter also accuses both the Trump Interior Department, which directed the USEITI process, and the two companies of falsely stating that U.S. law prohibited them from disclosing their tax payments to the U.S. treasury. “A May 2017 Interior Department Inspector General assessment of USEITI points out that the Internal Revenue Service may disclose tax data with the authorization of the taxpayer,” the letter says.
As noted in an earlier blog, http://www.thelugarcenter.org/blog-eiti-pull-out, what was particularly galling about ExxonMobil’s and Chevron’s death blow against USEITI was the fact that in earlier opposing the Cardin-Lugar regulation, Sec. 1504 of Dodd-Frank, they actually offered their participation in USEITI as evidence of their good faith on anti-corruption efforts.
The international EITI organization was formed in 2003 as part of the Publish What You Pay movement. It aims to curb the corruption, mismanagement, graft and theft that saddles so many mineral-rich developing countries with poverty and instability. Today, 51 countries voluntarily participate, agreeing to disclose how much money they get in royalties, taxes and fees from their oil and mining operations. Other international oil majors, including BP and Shell, also sit on the EITI board.
When Sens. Lugar and Cardin introduced their original legislation, the Energy Security Through Transparency act, they included a requirement that the U.S. become a reporting country under EITI as a way to demonstrate leadership on anti-corruption and encourage more developing countries to participate. The requirement was dropped from the final bill, but the Obama administration agreed with the premise and signed up.
The letter said that ExxonMobil’s and Chevron’s repeated violations of the letter and the spirit of their EITI obligations “are grounds for their immediate removal from the board.”
