WASHINGTON, DC – International aid agency Oxfam America filed a shareholder resolution today with Chevron calling on the California-based oil company to adopt a comprehensive policy of publicly disclosing payments made to governments where the company operates.
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.