Global Transparency Initiative Fails to Hold Exxon Accountable
PWYP-US will no longer engage with Initiative — Ongoing EITI process must ensure company compliance leading into October board meeting.
(Washington, DC) Today, the Board of the Extractive Industries Transparency Initiative (EITI) demonstrated a lack of commitment to holding its board members accountable by refusing to remove Exxon’s representative, Matthew Gobush, from the Board for failing to meet EITI board member conduct requirements. This follows a complaint lodged by Publish What You Pay-United States (PWYP-US) alleging that Gobush’s lobbying activities undermined the development of US Securities and Exchange Commission (SEC) disclosure regulations in line with the EITI Standard. Such lobbying violates expectations of EITI Board members, who are responsible for the EITI goal of making the EITI Standard “the internationally accepted standard for transparency in the oil, gas and mining sectors.”
As a result, PWYP-US expresses a Vote of No Confidence in the Board — the coalition will suspend its participation as a member in the EITI civil society constituency until the EITI commits to policies and procedures that hold supporting companies accountable. PWYP-US calls on others to follow suit.
Publish What You Pay-US Coalition Director Kathleen Brophy issued the following statement:
“PWYP-US can no longer spend time and resources on an initiative with leadership incapable of upholding its core values. The PWYP movement has dedicated the past two decades to codifying a strong global transparency standard, including tireless support for the EITI. Consequently, PWYP-US is suspending its engagement and encourages others to do the same.
The evidence couldn’t be more clear. In fact, we received no pushback on the facts of the matter at any point in this process. 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 – an outcome that makes clear that the EITI has no credible grievance process capable of addressing companies and their board members’ efforts to undermine the Initiative. It suggests that the EITI is now possibly captured by companies.
Over the years, we have seen countries suspended and expelled from the EITI for failing to meet expectations for their participation, but not companies. Until there is similar accountability for companies, the EITI cannot credibly fulfill its mandate as the global transparency standard for the oil, gas, and mining sectors.
Three years ago, when PWYP-US brought a similar complaint to the EITI, we saw no accountability beyond a statement. Since then, companies like Exxon have continued to ride roughshod over the basic principles of EITI, even working to weaken them through their lobbying work in the US, as we detail in our complaint.
While we expect to see a statement soon from the EITI Board Chair reprimanding this behavior, we have seen before that a statement is not sufficient to stop the continued behavior of some companies and their board representatives from undermining the Standard. There needs to be accountability for failing to fulfill Company Expectations and enervating the EITI.
We hope that the EITI Board and Chair Helen Clark will confirm a mechanism for Exxon’s compliance in advance of the October EITI Board Meeting.
According to publicly available meeting records, Gobush participated in lobbying meetings at the SEC with the American Petroleum Institute (API) and the US Chamber of Commerce (Chamber), two of the largest American oil lobby groups. These meetings focused on the SEC’s implementing rule for Dodd-Frank Section 1504, a transparency provision requiring mandatory payment disclosures from oil, gas, and mining companies.
The API and the Chamber have been long-time opponents of a strong implementing rule in alignment with the EITI Standard and reiterated their support of a weak rule while the SEC was revising the rule last year. PWYP-US raised concerns regarding Gobush’s attendance at these meetings – namely that Gobush, an EITI Board Member, attended lobby meetings with the two industry groups that have continuously fought to weaken extractive industry payment transparency regulations in the US for the past decade. PWYP-US demanded swift action, considering that this is the second civil society complaint to the EITI regarding Exxon’s non-compliance.
In a recent blog post, the EITI Secretariat pointed to its assessment of EITI companies’ performance against a set of EITI “Company Expectations.” Fully 30% failed to meet even basic-level disclosures of tax payments in non-EITI countries. This is an appalling and untenable performance, all the more so given it has taken three years for these expectations to be assessed, following their drafting as a response to the earlier 2018 complaint against Exxon and Chevron. This stands as an indictment of the collective performance of the companies’ constituency within the EITI — and it is high-time that companies that do not support the Standard are removed from the board.
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