In a letter to Chevron shareholders, Oxfam is urging investors to support a shareholder proposal on fiscal transparency calling on the company to disclose annually all taxes, royalties, fees, bonuses, and other payments to specific national governments.
Chevron paid more than $40 billion in taxes to governments around the world in 2008. Knowing how much money Chevron pays to the governments of Nigeria, Chad, Angola, Myanmar, and other countries rich in oil and struggling in poverty can make a significant difference for citizens pushing for government accountability.Chevron is a participant in the Extractive Industry Transparency Initiative (EITI), which is promoting disclosure of resource revenues paid to governments, and has stated in its 2008 corporate responsibility report that it supports the mission of the EITI:“Chevron believes that disclosure of revenues received by governments and payments made by extractive industries to governments could lead to improved governance in resource-rich countries. The transparent and accurate accounting of these funds contributes to stable, long-term investment climates, economic growth and the well-being of communities.”
Unfortunately, the voluntary EITI initiative works only where governments have the political will to implement the program. In many Chevron countries of operation the host government has either not signed up to EITI or not fully implemented it. Only 2 out of 22 countries facing a March 2010 deadline to have their implementation of EITI independently verified met the deadline.
Chevron has an additional opportunity to take a leadership role in advocating for resource revenue transparency as the US Congress debates the proposed Energy Security through Transparency Act of 2009. This law, if enacted in its proposed form, would require all oil companies like Chevron that are registered with the Securities and Exchange Commission to disclose payments to governments. The law would ensure more disclosure in resource-rich countries, whether or not the government is participating in the voluntary approach.
The Oxfam shareholder proposal concludes: “Chevron should practice the highest possible degree of disclosure of payments from the company to host governments to maintain its industry leadership position on this critical issue and to ensure that its investments contribute to increased economic development and political stability.”
Oxfam hopes for strong support for the proposal at the annual Chevron shareholders meeting on May 26th.
]]>Unfortunately, not all indigenous groups participating in these working groups felt that the discussions were productive. AIDESEP, a long-time Oxfam America partner and one of the largest federations representing indigenous peoples in Peru’s Amazon, has withdrawn from the dialogue process, citing lack of progress and reluctance on the part of the government to accept its share of the responsibility for the violence in Bagua.
While indigenous people and the government struggle to continue a meaningful dialogue, the Indigenous Federation of Madre de Dios (known as FENAMAD) has been objecting to the presence of Hunt Oil of Texas in the Amarakaeri Communal Reserve (RCA), part of the 3.5 million-acre Block 76 oil concession located in the Madre de Dios region in southeastern Peru. FENAMAD contends that Hunt Oil could be playing indigenous communities against each other to gain access to their lands. “The current strategy of the US company Hunt Oil is to negotiate directly with the members of each native community and seek to divide them and provoke open confrontation among the brother indigenous people within each community,” FENAMAD is saying in a memorandum.
There is a real danger this could emerge as the next flashpoint in a disturbing stream of conflicts between communities and oil and mining companies in Peru. The Peruvian Ombudsman Office estimates that of the 273 social and environmental conflicts in Peru in the first six months of 2009, 80 percent were related to extractive industry projects. (In 2008 there were 123 social and environmental conflicts in the same period.)
FENAMAD and other indigenous federations are insisting that foreign oil, gas, and mining companies must attain the free, prior, and informed consent from communities before they can enter any indigenous lands such as the Amarakaeri Communal Reserve. The right of free, prior, and informed consent is a right of indigenous peoples established under international law, and requires free access to full information (including independent analysis of project proposals), adequate time for a community decision free of pressure and coercion, and the option to reject a proposal--or accept under certain conditions.
The failure of oil, gas, and mining companies to gain appropriate access to communities with natural resources limits Peru’s ability to benefit from revenues it needs to help the approximately 50 percent of its population now living in poverty.
The legislature gave Peru’s President Alan Garcia broad powers to promote economic competitiveness through decrees last year, saying it was necessary to adapt legislation to comply with new requirements of the Peru-US Free Trade Agreement. Indigenous federations and many civil society organizations have strongly protested the possible consequences of these laws for the Amazon rainforest and indigenous lands, as well as the fact that they were adopted without transparency or genuine consultation. Some of these legislative decrees were rescinded following violent confrontations last June, but many are still in force.
Oxfam America's campaign—called the Right to Know, Right to Decide—aims to arm local citizens with the information they need to weigh the costs versus the benefits and decide whether to provide consent for the projects to move forward.
“There is a potential for this confrontation to escalate to violence,” says Emily Greenspan, Oxfam America’s policy advisor who monitors oil and gas projects in Peru’s Amazon. “Companies seeking to operate in any areas need to attain the free, prior, and informed consent of communities. Those that appear to be forcing their way into communities risk serious conflict, as we have seen in the recent past.”
]]>The media in Ghana are reporting that representatives of all the main political parties in Parliament are sufficiently concerned about the anticipated $1 billion in additional revenue in 2010 that they issued a communiqué calling for the government to stop issuing any new licenses for oil production until it can improve its regulations for the oil industry and clarify how the money will be managed.
An article in the government-owned Daily Graphic newspaper said that the members of Parliament “argued that less than one year before the drilling of the country’s oil in commercial quantities, there was not a single law before Parliament on how the country would manage the oil fields and the expected revenue as well as how to ensure that the environment was not damaged by the companies.”
The communiqué urged the government to use oil money to diversify its economy, and avoid an over reliance on oil that has been so disastrous in other countries in Africa. The communiqué also pointed out that Ghana needs to beef up its tax revenue agency to ensure oil taxes are properly collected and available for social programs to benefits its citizens. The members of Parliament called for the government to use 80 percent of oil funds to improve the “physical and social infrastructure” of the country, save 10 percent for future needs, and use the other 10 percent for stabilizing the budget.
In early 2009 Oxfam America and the Integrated Social Development Center of Ghana (ISODEC) issued a report called Ghana’s Big Test that recommended the country halt new licenses and disclose details of licenses and agreements it makes with oil companies as a means to increase transparency. Following the release of this report, Ghana’s new president John Atta Mills committed to do this, and also said the country would take steps to promote new and better regulations and foster open and public procedures for issuing licenses and setting policies.
To date, the government has not followed through on its commitments to disclose petroleum agreements, despite continued calls from civil society and parliamentarians to do so. Oxfam partner organization ISODEC has continued to promote opportunities to implement recommendations from the report. Steve Manteaw, campaigns coordinator at ISODEC, says that, “Ghana must control the pace of petroleum sector development so that it does not outstrip the capacity of the government and society to build institutions, regulations and standards.”
“The communiqué issued by the members of Parliament, cutting across Ghana’s political spectrum, emphasizes the importance of transparency and responsible management of oil revenues,” says Ian Gary, Oxfam America’s senior policy advisor and author of the Ghana’s Big Test report. “It will be vital for the government to fully consult with members of Parliament and the public at large on the legal framework for regulating the sector and managing revenues so that strong safeguards are in place before oil starts to flow.”
]]>These contracts determine how much governments will receive from the development of their resources and have important implications for communities, human rights, and the environment. While much international attention has been given to transparency and management of government revenues from these industries, less attention has been paid to the underlying agreements between companies and host governments.
The conference discussed the political and legal context of extractive industry contracts; licensing and negotiation; confidentiality and transparency of contracts; citizen and parliamentary participation in negotiation; approval and monitoring of contracts; the financial "take" of the government contracts; and contract renegotiation experiences. Specific experiences in Liberia, Ghana, Peru and Azerbaijan were also examined from a variety of perspectives. Conference participants discussed key areas for a reform agenda as a contribution towards addressing the “resource curse”.
]]>The resolution, filed on International Human Rights Day, aims to promote the rights of citizens in oil-rich countries by providing them with vital information about revenues coming into their countries. Co-filers on this resolution include Newground Social Investment, Robert Brooke Zevin Associates, Inc., and likely several other Chevron shareholders.
In 2008, Chevron paid more than $40 billion in taxes to governments around the world. Managed properly, oil revenues can contribute to economic growth and poverty reduction in countries where Chevron and other companies operate. However, history has shown that oil company payments to governments as well as government receipts are often kept secret, leading to embezzlement, corruption, and revenue misappropriation by host governments, which, in many cases, has prevented oil revenues from contributing to economic development in these countries.
“Natural resource revenues are too often squandered through corruption, internal conflict, and weak governance,” said Raymond C. Offenheiser, president of Oxfam America. “Citizens of resource-rich developing countries need adequate information to hold their governments accountable for using natural resource revenues for essential services like health and education. Chevron should maintain its position as an industry leader on this issue by practicing the highest degree of disclosure of payments to host governments to help make this possible.”
Chevron plays a leading role in the global Extractive Industries Transparency Initiative (EITI), a voluntary program designed to increase transparency of payments by oil, gas, and mining companies to governments where resources are extracted. EITI is recognized as an important step toward improving revenue transparency, but a voluntary initiative has limited effect and does not cover all countries where Chevron invests, including Angola, Chad, and Cambodia.
“While Chevron has endorsed the concept of revenue transparency with programs like EITI, it does not fully disclose payments to governments on a country-by-country basis. A policy for disclosing this information in all of Chevron’s countries of operation will help ensure that the company’s – and the shareholders’ – investments contribute to increased economic development and political stability in developing nations,” said Offenheiser. “We hope that other Chevron investors will join us in supporting this proposal.”
Oxfam’s proposal presents an opportunity for Chevron to take a leadership role as the US Congress contemplates legislation that would legally require all oil, gas, and mining companies registered with the Securities and Exchange Commission (SEC) to disclose payments made to host governments. This includes European companies, such as Shell and BP, as well as many companies in emerging markets such as China, India and Brazil. The Energy Security through Transparency Act of 2009 was introduced with bipartisan Senate support in September and is expected to be considered for a vote in 2010.
“This legislation hopes to address the lack of transparency in the oil, gas, and mining industry that often goes hand-in-hand with government corruption and violent conflict. The resulting instability poses a long-term threat to company investments and higher energy prices for consumers. By recognizing the value of transparency, Chevron can help elevate the industry and foster accountability in nations where secrecy has undermined development, democracy, and human rights,” said Offenheiser.
]]>Sarpong had moved here in 1984. He and his wife had raised six children on this farm. “It used to be lively here,” he said. “We lived as a family, and we had everything: goats, sheep, fowl—everything.”
They had used water from a stream running next to their home, now diverted by the waste rocks. Sarpong had sent his family away to live with relatives since they no longer had drinkable water. The AngloGold Ashanti mining company had offered Sarpong money for his farmland and trees in 2004, but he’d decided it was not enough and refused to move. He and about 35 others had formed an organization called Concerned Farmers’ Association of Teberebie to fight the terms of the compensation agreement, and they brought their case to Ghana’s courts. Although all the other members of the Concerned Farmers’ Association had moved off their farms, Sarpong had remained on his, awaiting the legal judgment.
As the case dragged through the courts, this past summer there was a legal decision that shocked Sarpong: a judge granted an eviction order, and AngloGold moved in and demolished what was left of the Sarpong homestead before his lawyer could file an appeal. According to a press release from Oxfam America’s partner WACAM, an environmental and human rights organization in Ghana, his dwellings were destroyed and all his property was seized, a violation of Ghana’s Minerals and Mining Act.
Sarpong is now living in WACAM’s office in Tarkwa, a 20-minute drive from Teberebie. He is 65 and has no home or means to make a living. WACAM’s executive director Daniel Owusu-Koranteng, says the court order to demolish Sarpong’s farm “shows how corporate power could erode our democratic structures and render our judicial system liable to corporate influence.”
The legal system in Ghana is slow—as in many countries—but it does not help the Concerned Farmers’ Association that the date slated for a judgment in their case came and went in August with no decision. The judge, it seems, happened to retire just before the ruling was due. A new judge has been assigned to the case.
When I got Sarpong on the phone in Ghana in August, he was happy to say hello but honored his lawyer’s advice not to discuss the case. Paul Ahornuy, who works for WACAM in Tarkwa, says the demolition of Sarpong’s houses created a furor in Ghana. Ahourny says it will take more time before the case in Teberebie can be resolved, but that “this is a human rights issue, and we need to support them in their struggle.”
]]>But a hungry child exists in a larger context: if we nourish communities, they can nourish their own children.
The woman on our cover, Fatou Doumbia, and other women in her village in Mali, pooled their resources last year. They set aside nearly a ton of millet as a defense against the hunger they’d seen as food prices spiked. Hers is another face of hunger: determined, resourceful.
After the last harvest, Oxfam reached out to supporters to respond to the food crisis. We’ve devoted much of this issue to looking at what communities have done to avoid the kinds of hardships they confronted. When people living in poverty are hit by a food crisis or natural disaster, they lack resources to tide them over.
Oxfam works to help people build their resilience. Let respect and hope fuel your efforts to support women like Doumbia.
]]>In 2007, the Chinese consortium Xiamen Zijin Tongguan Investment Development Co Ltd took over the British mining company and transferred its headquarters from London to Hong Kong. The injunction, applied in June 2009, prohibited the company from disposing of its assets. If courts in the United Kingdom find Monterrico Metals to be responsible for the human rights violations inflicted on the farmers, it will be required to pay adequate compensation to the injured individuals and the communities to which they belong.
Oxfam International in Peru welcomes the British High Court’s decision. In Lima, Javier Aroca, coordinator of Oxfam International’s Extractive Industries Program in South America, expressed his satisfaction with the verdict issued on October 16, 2009. “This is an important step forward in the defense of human rights in Peru. It establishes a precedent and acknowledges the abuse to which the citizens who expressed their opposition to the expansion of mining in their communities were subjected”, he explained.
In August 2005, 27 men and two women were detained and held for three days at the Rio Blanco mine site in a remote area of northern Peru. They had been protesting against the development of the mine, which is the major asset of Monterrico Metals. According to their witness statements, the unarmed protestors were held against their will and subjected to physical and psychological torture allegedly by the Peruvian police, mine employees, and mine security guards. One farmer died.
Attempts to seek justice through the Peruvian courts have been slow and difficult. In March of this year, Peruvian prosecutors accused the police of torture, but cleared the mining company and private security firm Forza of wrongdoing. Thirty-one claimants, including all of the alleged victims held at the mine site, are now pursuing their case in the English courts, arguing that the company must have known of the conditions in which they were being detained, but failed to take steps to prevent or end their ordeal. Oxfam’s partner organization, FEDEPAZ (the Ecumenical Foundation for Development and Peace), together with the CNDDHH (Peru’s National Human Rights Coordinating Committee) filed the complaint on behalf of the victims and has been providing them with legal assistance in this case. FEDEPAZ said in a statement that this injunction confirming the freezing of Monterrico Metals’ assets constitutes an unprecedented achievement in the fight against impunity and marks an extremely important step toward the goal of achieving justice for the victims.
Oxfam soon will be releasing two video reports about this case.
]]>These contracts determine how much governments will receive from the development of their resources and have important implications for communities, human rights, and the environment. While much international attention has been given to transparency and management of government revenues from these industries, less attention has been paid to the underlying agreements between companies and host governments.
The conference discussed the political and legal context of extractive industry contracts; licensing and negotiation; confidentiality and transparency of contracts; citizen and parliamentary participation in negotiation; approval and monitoring of contracts; the financial "take" of the government contracts; and contract renegotiation experiences. Specific experiences in Liberia, Ghana, Peru and Azerbaijan were also examined from a variety of perspectives. Conference participants discussed key areas for a reform agenda as a contribution towards addressing the “resource curse”.
The one-day international conference brought together international NGOs, civil society groups from developing countries, academics and researchers, international financial institutions, corporate and government representatives, and legal practitioners. (Participants came from Ghana, Liberia, Peru, Bolivia, Nigeria, Burkina Faso, Cameroon, Angola, Azerbaijan, Kazakhstan, Equatorial Guinea, Cambodia, Europe, Canada, and the United States.)
A summary conference report will be available shortly. For more information on the conference, please contact Ian Gary at Oxfam America, igary@oxfamamerica.org, or Susan Maples at Columbia University School of Law, smaple1@law.columbia.edu.
INTERNATIONAL CONFERENCE ON EXTRACTIVE INDUSTRIES CONTRACTS
Oxfam America, Oxfam Novib, Revenue Watch Institute, International Institute for Environment and Development, Global Witness, Bank Information Center, Publish What You Pay – USA
September 23, 2009
House of Sweden, Alfred Nobel Hall
Washington, DC, 20007
Ian Gary – Senior Policy Advisor – Extractive Industries, Oxfam America – “Breaking the Resource Curse – the Importance of Addressing Contract Issues”
Click here for the audio recording, or download the file here.
Moderator – Ian Gary
The Political, Social and Legal Context of Company-Host Government EI Agreements – Historical Trends, External Constraints and Latest Developments
Click here for the audio recording or download the file here.
Moderator - Kyla Tienhaara - postdoctoral researcher - Regulatory Institutions Network - Australian National University
Click here for the audio recording or download the file here (includes panel above on US Congressional action).
Moderator – Sarah Pray - Coordinator - Publish What You Pay USA
Click here for the audio recording or download the file here.
Moderator – Lorenzo Cotula - Senior Researcher - Law and Sustainable Development, Natural Resources, IIED
Click here for the audio recording or download the file here (includes closing remarks).
Moderator – Carlos Monge - Regional Coordinator for Latin America, Revenue Watch Institute