Shareholders file new tax transparency proposals against Exxon, others

Mar 27, 2023 News

Kaieteur News – Oxfam America and co-filers have filed a series of new tax transparency proposals against American oil giants, ExxonMobil, Chevron, and ConocoPhillips.

Oxfam

Senior Legal and Shareholder Advocacy Advisor, Oxfam America, Diana Kearney and Legal Fellow, Oxfam America, Tim Hirschel-Burns, revealed the aforementioned in a Proxy Preview article. They stated that Oxfam and the co-filers are requesting that the companies disclose country-by-country financial information in line with Global Reporting Initiative (GRI) standards, the world’s most utilised corporate reporting framework. The reports would include country-by-country reporting of certain company financial information, including revenues, profits and losses, and tax payments within each jurisdiction – critical information to understanding risks of profit shifting and tax avoidance.

Kearney and Hirschel-Burns reported that the disclosure the shareholders are seeking would reveal key insights for investors seeking to evaluate a company’s risk profile, including information surrounding revenues, profits, losses and tax payments.  The dangers that tax secrecy pose to shareholders are beginning to emerge:  Scathing media critiques, expensive legal battles and a rapidly changing regulatory landscape render continued tax avoidance a serious risk for long-term investors.

As such, shareholders’ inability to assess the risks associated with tax dodging is growing into a particularly pernicious issue. It was noted that recent repercussions of the companies’ questionable tax dealings include that ExxonMobil was dubbed the “poster boy for tax dodging” after years of zero corporate tax paid to Australia; U.S. Court rejected Exxon’s attempts to claim a $1.3 billion tax refund related to its operations in Malaysia and Qatar and Public protests over Exxon’s paltry fiscal contribution to Papua New Guinea, led to a significantly higher government take of revenues from Exxon’s operations.

Last November, Oxfam had filed a shareholder’s resolution against ExxonMobil, Chevron, and ConocoPhillips calling them out on their alleged ‘secretive’ tax practices. Oxfam is a British-founded confederation of 21 independent charitable organisations focusing on the alleviation of global poverty. The resolution that they filed, is called a ‘shareholder resolution’ which is usually a 500 word request submitted to a company by a shareholder asking the company to address an issue of concern.

Kaieteur News had reported that in their shareholder’s resolution, Oxfam stated that oil majors’ lack of transparency creates a material risk for long-term investors who want to safeguard against risks of reputational damage. “Worse still, these secretive practices undermine the public’s interest in a fair tax system, especially in Global South countries with the greatest tax revenue needs” Oxfam said in a press release. Oxfam’s resolutions ask the companies to publish tax transparency reports in line with the tax standard of the GRI. Daniel Mulé Policy Lead on Extractive Industries and Tax at Oxfam America said, “Exxon, Chevron, and ConocoPhillips’s threadbare tax disclosures leave investors, watchdog groups, and the general public in the dark about the companies’ secretive tax practices.”

• American oil giants, and ConocoPhillips., Chevron, ExxonMobil, GRI, Tim Hirschel-Burns