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Exxon, Chevron, ConocoPhillips Pressured To Publish Tax Info

By Kevin Pinner · 2022-11-21 18:58:29 -0500 ·

Exxon Mobil, Chevron and ConocoPhillips each face proposals from Oxfam asking shareholders to vote on whether the companies must issue reports showing information on workers, payroll, revenue, profits and taxes in each country of operation, according to copies made public Monday.

Identical resolutions in proposals Oxfam filed separately at Exxon, Chevron and ConocoPhillips call for each company's management to issue reports to shareholders that include country-by-country tax information and outline strategy, governance and stakeholder engagement on tax issues, based on the Global Reporting Initiative's tax standard. The three oil and gas companies don't disclose revenue, tax payments or profits broken down by country, aside from for the U.S., Oxfam said in its supporting statements for each proposal.

Shares in each company were donated to the charity, headquartered in Nairobi, Kenya, to facilitate shareholder activism and were not purchased with money from public donations, according to the statement.

The lack of country-by-country reporting challenges investors' ability to understand whether their tax practices create value in the long run, the charity said.

"Exxon, Chevron and ConocoPhillips' threadbare tax disclosures leave investors, watchdog groups and the general public in the dark about the companies' secretive tax practices," said Daniel Mulé, policy lead on extractive industries and tax at Oxfam America.

Dennis Nuss, director of media relations at ConocoPhillips, confirmed the company had received Oxfam's proposal and said it is committed to following disclosure rules in countries where it operates.

"As with all shareholder proposals, we will review in accordance with our annual process for preparing proxy materials ahead of our 2023 annual meeting of stockholders," Nuss said Monday. ConocoPhillips' last proxy statement was issued in March for its annual general meeting in May. 

In 2020, ConocoPhillips settled a $179 million tax case with Vietnam, the statement said in March. In May, ConocoPhillips withdrew from the Extractive Industries Transparency Initiative, an international push to fight corruption in natural resources industries. Several months earlier, the EITI had strengthened expectations for companies, though ConocoPhillips denied that was linked to its decision to leave.

Casey Norton, corporate communications manager at Exxon, said the company is committed to complying with all legally required financial disclosures.

"​​While we appreciate the intent of the request here, it does not further the goal of allowing investors to evaluate our performance or long-term financial health," Norton said.

Exxon's last proxy statement was issued in April for its annual general meeting in May.

In August, the Fifth Circuit denied Exxona $1 billion refund of taxes on what the company claimed were sales in Qatar and Malaysia, finding that because the countries maintained economic interest in the operations, the transactions were better considered leases. In the same case, the court also found the company didn't owe a $200 million penalty imposed by the Internal Revenue Service.

Bill Turenne Jr., external affairs adviser at Chevron, said the company will make recommendations to shareholders on proposals in its 2023 proxy statement, which is expected to be released in early April.

"Our approach to tax matches our efforts globally to conduct our business legally, responsibly and with integrity," Turenne said.

In 2017, Chevron was ordered to pay $268 million by an Australian court that found the company had used offshore entities to underpay taxes, Oxfam's statement said.

Mulé said fossil fuel companies often claim they contribute to local economies in countries where they have production operations, especially poor countries, but it's impossible to verify such claims without country-by-country tax information.

"If oil and gas projects are alleviating poverty, why hide the numbers?" Mulé asked.

Oil and gas companies Shell, BP, TotalEnergies and Hess publish tax reports aligned with the GRI tax standard, along with mining company Newmont, according to Ian Gary, director of the Washington, D.C.-based Financial Accountability and Corporate Transparency Coalition.

"Exxon, Chevron and ConocoPhillips are seriously lagging behind their peers," Gary said in the statement.

In the past, companies have requested permission to disregard similar tax transparency proposals from the U.S. Securities and Exchange Commission on the grounds that they could disrupt ordinary business operations. In April, the SEC denied Amazon's attempt to block such a proposal, marking the first time a public country-by-country tax transparency proposal had made it to a vote among shareholders.

In September, the SEC's chairman said the agency was eyeing public country-by-country disclosure requirements. Several days later, Cisco became the first company confirmed not to have challenged a public country-by-country reporting proposal in proxy materials.

Since 2016, the IRS has required multinational corporations with consolidated annual group revenue above $850 million — which includes Exxon, Chevron and ConocoPhillips — to privately report country-by-country data. All Organization for Economic Cooperation and Development member countries have similar requirements.

In October, Australia's government debuted plans to become the first country with public country-by-country reporting requirements, which could have implications for companies headquartered around the globe with operations there.

"Corporations should respect shareholders and lead the way to let the sunlight in," Jason Ward, principal analyst at the Australia-based Centre for International Corporate Tax Accountability and Research, said in the statement.

--Additional reporting by Theresa Schliep. Editing by Neil Cohen.

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