“Today, I can announce that the United States will join the global initiative in which these industries, governments and civil society, all work together for greater transparency so that taxpayers receive every dollar they’re due from the extraction of natural resources.”

In February 2018, civil society organizations, including PWYP-US, filed a formal grievance with the Extractive Industries Transparency Initiative (EITI) Board, documenting violations of the EITI rules by ExxonMobil and Chevron and calling for the companies to be held accountable and removed from the board. Signatories of the letter included civil society representatives that served on the now defunct USEITI multi stakeholder group. The letter documents specific violations of the the EITI Code of Conduct by ExxonMobil and Chevron that should lead to their removal from the EITI Board.

This page serves as a public record of the background and evidence of the civil society complaint, as well as how the grievance process is being executed by the EITI Secretariat. A timeline is included below with relevant key events.

Key Events – 2011 through 2018

2011 – 2016

● ExxonMobil and Chevron submit comments to the SEC during multiple rulemaking periods seeking to weaken the rule.

April 2013

● The EITI Standard is expanded to require public, company-by-company, project-level reporting in all EITI member countries.

December 22, 2015

● ExxonMobil and Chevron refuse to report their Federal corporate income taxes in the 2015 USEITI report (p. 68).

June 27, 2016

● The Securities and Exchange Commission publishes a strong rule to implement the Cardin-Lugar provision (also known as Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act).

November 18, 2016

● ExxonMobil and Chevron refuse to report their Federal corporate income taxes in the 2016 USEITI report (p. 85).

2017

January 10-12

● A USEITI reporting improvement workshop is held in Denver. Representatives from industry, civil society, and government are present. The public notes from the meeting include the following:

“Section 1504 reporting is necessary to ensure reporting by covered companies meets the requirements of the EITI Standard.
. . .
The group discussed the intrinsic nature of Section 1504 to the USEITI process and its equivalence to implementing legislation. As such, should 1504 be undone, USEITI would not have a path forward to implementation and validation.”

January 30

● Rep. Bill Huizenga (R-MI-2) introduces H.J. Res. 41 , a Congressional Review Act resolution of disapproval to repeal the SEC’s implementing rule for the Cardin-Lugar provision.

January 31

● The American Petroleum Institute sends a letter to Speaker of the House Rep. Paul Ryan (R-WI-1) and Minority Leader Nancy Pelosi (D-CA-12) expressing strong support for H.J. Res. 41.

● Ahead of the vote, API also sends a fact sheet with erroneous arguments to lobby members of Congress to vote in favor of H.J. Res. 41. The fact sheet alleges that API’s support for transparency was established because “API itself has been heavily involved in the implementation of U.S. EITI through our membership on the U.S. EITI’s multi-stakeholder group.”

February 1

● The House of Representatives passes H.J. Res. 41 on a 325 to 187 vote .

● The USEITI MSG meeting is held in Washington, DC. Members of civil society voiced their grave concern about the role of MSG member representing the American Petroleum Institute (API) in supporting the CRA. Civil society made the case that API’s support for repeal of Section 1504 contradicted its support for the MSG’s consensus-based decision regarding project-level payment disclosure . During the meeting, the Designated Federal Officer cut off public comment and MSG member discussion regarding Section 1504, and ended the meeting early. Based on the controversy around Section 1504 and the CRA, government members of the MSG sought and received support to shorten the February meeting to one day.

February 3

● The Senate passes H.J. Res. 41 on a 52 to 47 vote .

February 9

● USEITI CSO members issue a public letter to underscore concerns about API undermining the goals of USEITI by supporting H.J. Res.41 and objecting to USEITI preventing civil society from discussing this at the February 1 USEITI MSG meeting.

February 14

● President Trump signs H.J. Res. 41 into law .

February 23

● A Department of the Interior (DOI) official informs members of the USEITI MSG that implementation subcommittee meetings are canceled through March 15.

March 9

● On a phone call, a DOI official informs civil society members that the June and November MSG meetings will be canceled and that there would be no path forward to EITI validation by April 2018, the country’s validation deadline, because oil companies were refusing to disclose their taxes.

March 17

● USEITI CSO members issue a statement expressing disappointment with the March 9 call in which a DOI official suggested that the U.S. would no longer be a candidate for validation under the EITI Standard. The statement garners media coverage in The New Yorker , The Atlantic , CNBC and The Huffington Post .

March 31

Lobbying Disclosure Act reports submitted by ExxonMobil, Chevron, and the American Petroleum Institute for the first quarter of 2017 reveal lobbying on H.J. Res. 41 and S.J. Res. 9..

May 24

● Natural Resource Governance Institute CEO and EITI Board member Daniel Kauffmann raises concerns about USEITI at the EITI International Board meeting in Oslo, Norway.

October 25

● USEITI CSO members issue a statement seeking clarification from DOI Secretary Ryan Zinke regarding the Department’s intentions for EITI implementation in the U.S. The statement requests that DOI is accountable to U.S. commitments to the EITI Standard, USEITI Charter, and the USEITI Terms of Reference and indicates the CSO group’s eagerness to continue the activities of the USEITI MSG provided that it is reinstated publicly, that the scheduled meetings are re-established, and that a plan to move forward is implemented.

December 1

● Rep. Huizenga (R-MI-2) introduces H.R. 4519 , a bill to amend the Securities Exchange Act of 1934 to repeal Section 1504 of the Dodd-Frank Act.

December 13

● The House Financial Services Committee approves of H.R. 4519 on a 33-27 vote .

November 2

The US withdraws from the USEITI .

● The Department of the Interior sends a letter to Fredrik Reinfeldt, Chair of the EITI Board announcing the withdrawal of U.S. candidacy for EITI . The letter makes the false claim that U.S. law prevents implementation of the EITI Standard.

2018

February 7

● USEITI CSO members send a letter to Chair Reinfeldt regarding violations of the EITI Code of Conduct by ExxonMobil and Chevron and call for the companies’ immediate removal from the EITI Board.

March 23

● The EITI secertariat legal counsel provide an analysis of civil society’s grievance. The legal analysis is communicated in a letter to the EITI Secretariat dated March 23, 2018.

April 3

● Signatories of the February 7 letter meet in Washington, DC with Chair Reinfeldt and Jonas Moberg, Executive Director of the EITI Secretariat, to discuss the call for ExxonMobil and Chevron to be removed from the EITI Board.

May 30

● The EITI Secretariat publishes a statement on its website in response to civil society’s grievance against Exxon and Chevron. The statement is also available here.

June 13

● Civil society submits a letter responding to EITI Chair Reinfeldt’s May 30 statement.

June 27

● Civil society submits a letter calling for reform of the EITI grievance process.

June 28 – 29

● EITI Board Meeting is held in Berlin, Germany.

Background

ExxonMobil, Chevron and the American Petroleum Institute (API) have been opposed to the Cardin-Lugar provision (Section 1504 of 2010 Dodd-Frank Act), a bipartisan anticorruption safeguard, for nearly a decade. The two companies, working with and through API (both companies are members of API), actively lobbied members of Congress to prevent passage of the Cardin-Lugar law, to repeal it and to weaken or repeal its rules on several occasions. Former U.S. Secretary of State and former CEO of ExxonMobil, Rex Tillerson , personally lobbied against the Cardin-Lugar provision before it became law in 2010. The companies sought to undermine the effectiveness and implementation of the Cardin-Lugar provision, including support for an API lawsuit to repeal the 2012 SEC rule, and by submitting comments to the SEC calling for a weak rule. In early 2017, ExxonMobil and Chevron lobbied for the repeal of the 2016 SEC rule – lobbying disclosures are available here .

ExxonMobil and Chevron’s sustained opposition to the Cardin-Lugar provision directly conflicts with the companies’ corporate policies in support of the EITI and transparency. The two companies have served on the EITI board for many years, and Chevron has served continuously since its inception.

History

The United States’ implementation of the Extractive Industries Transparency Initiative (EITI) grew from a government-wide commitment to transparency initiated by former President Obama. The Open Government Partnership National Action Plans for the United States have included a commitment to implement EITI since 2011. The current National Action Plan calls for US EITI compliance no later than 2017.

The Department of the Interior oversees USEITI implementation. A multi-stakeholder group (MSG) of civil society, government, and industry actors cooperate in the design and implementation of the USEITI. The PWYP-US secretariat and coalition members, including the Project on Government Oversight, Global Witness, and Oxfam America are actively engaged on the USEITI MSG.

In March 2014, the US was recognized as an EITI candidate country. The first USEITI report was published in December 2015; the second USEITI report was published in November 2016. These reports include revenues, production data, employment figures, profiles of communities where resource extraction takes place, and a wealth of additional information about the extractives sector in the United States. Information about the US extractive sector can also be found through the interactive USEITI Data Portal.