Exxon Rift Prompts Advocacy Group to Quit Tax Rules Alliance
Exxon Rift Prompts Advocacy Group to Leave Tax Rules Alliance
(Bloomberg) -- A coalition of financial-transparency advocates suspended its 18-year participation in an organization that sets global reporting standards for commodities suppliers after it decided not to evict an Exxon Mobil Corp. executive from its board.
Publish What You Pay “expresses a vote of no confidence in the board” and will halt engagement “until the EITI commits to policies and procedures that hold supporting companies accountable,” the group said, referring to the Extractive Industries Transparency Initiative.
The coalition accused Exxon’s Matthew Gobush of lobbying against the very standards EITI stands for and called for his removal. Gobush attended meetings alongside lobbyists from the American Petroleum Institute and others last year, when the U.S. Securities and Exchange Commission was developing rules on how natural resource companies should disclose payment to governments.
The EITI board operates by consensus and at the June 30 meeting “it did not reach consensus on termination of the membership of the EITI alternate Board member who was the subject of the complaint,” Chair Helen Clark said in a statement. “I therefore consider this complaint to be closed.”
The rift is just the last clash between activists and Exxon, whose shareholders have grown frustrated with the company’s environmental, social and governance record and replaced three board members last month. Separately, Chief Executive Officer Darren Woods apologized yesterday after one of the company’s lobbyists was caught on camera undermining its support for a U.S. carbon tax and admitting it worked with “shadow groups” that resisted climate science.
At the same time, the EITI is facing calls to beef up its requirements for member companies, a third of whom fail to uphold the body’s own standards. The board will work to “clarify and strengthen the expectations for EITI supporting companies including consideration of consequences for companies not meeting the expectations,” Clark said.
That’s not enough to satisfy some civil society groups.
“An unwillingness to take action, even with a case as strong as this, means the Board is incapable of reaching a consensus decision around a matter of basic accountability,” Publish What You Pay U.S. director Kathleen Brophy said in the statement.
The complaint against Gobush is a symptom of a wider frustration that advocacy groups and some of EITI’s 55 member countries have had with the organization for many years. It was set up in the early 2000s to develop a global tax and royalty disclosure mechanism to increase payment transparency and help root out corruption in the natural resources industry.
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Campaigners accuse Exxon and other American oil companies including Chevron Corp. of lobbying against the EITI’s standard while also enjoying the reputational benefits of being a member.
The rule-setting body’s failure to act “suggests that the EITI is now possibly captured by companies,” Publish What You Pay said.
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