Monday, May 17, 2010

Big oil ... publishing what they pay!

Dear Colleagues

Today Oxfam America sent me an email asking for my support ... as they do on a routine basis. On this occasion the subject was Chevron and their refusal to publish what they pay. This is an important subject ... but Oxfam America has it wrong!

The matter of bribery and corruption is an important part of why the Community Analytics (CA) initiative birthed. But this problem is not an easy one to handle, and, in my view, the Publish What You Pay (PWYP) initiative is not fully thought through. It is widely thought that bribery and corruption in the international energy industry and oilfield supplies is a standard modus operandi ... and while this may be true, the US based companies are not the only players in the sector.

This subject is hardball! I have done accountability work in many places and on three separate occasions I have been warned that if I did not "shut up" I would be going home in a box. I have survived ... but I knew others who did not. Oxfam America does not mention in their message that another oil company did publish what they paid, and promptly lost their rights to work in the country.

Certainly the goal of a corruption free global economy is good ... but the changes that are needed to get to this situation are very deep. In my view it can be done, but the PWYP approach is mis-guided, and is almost certainly counter-productive because it highlights the issue while doing nothing of substance to change the culture.

Of course, I argue that the Community Analytics (CA) initiative can be part of the solution in due course. As a practical matter oil companies are able to benefit from the bribery and corruption, and in turn rich big energy consuming country customers benefit from lower cost energy ... so there is little to leverage change. Indignation in one rich country is not enough ... there has to be global indignation, and people who are being abused by the present system have to be engaged. It will happen in due course ... and CA can help.

Eventually CA style socio-economic value chain analysis from communities in poor developing countries will show up the absolutely bizarre poverty associated with areas where there are some of the most valuable resources on the planet ... the economic facts just do not compute. But at the moment ... WHO CARES? ... there are no metrics that force these obscene facts into routine and public view. In due course this will change!

The following is is what Oxfam America circulated.

Dear Peter,

In 2008, Chevron paid more than $40 billion to the governments of countries around the world – most of it entirely in secret.

Chevron drills for oil in places where millions of families struggle on less than $1 a day. That $40 billion could have supported schools, health care and food programs – so where did it go?

Chevron knows exactly how much it paid to each country. But they won't say. And without any information on these secret payments, poor communities can't demand their fair share – to send their children to school, create jobs and escape poverty and hunger.

Tell Chevron to open the books on its secret payments so that the world can follow the money and help put it toward real development.

In less than a month, Chevron will hold its annual shareholder meeting. This is our moment to demand that Chevron finally come clean. Greater transparency and accountability will stabilize countries and help Chevron in the long run.

Chevron won't even provide a basic accounting of how much money goes to each country – so there's no transparency, no accountability, and no way for poor people to call for their fair share.

That means people whose lands are yielding up millions of dollars in oil revenues still face chronic hunger and poverty. It means some officials remain free to enrich themselves with no public oversight. This makes it hard for citizens and watchdog groups to follow the money and keep officials honest.

We've met with Chevron multiple times, but they keep refusing to disclose. So we've filed a shareholder proposal for Chevron's May 26th annual meeting, by which shareholders can exercise their rights and ask Chevron to open the books on its secret payments – and we're also making it easy for people like you to put direct pressure on Chevron.

Other oil and mining companies disclose this information, and Chevron should join them – especially since more transparency will actually help Chevron in the long run by stabilizing countries. If the company agrees to change its policies, it could be a watershed moment across the oil, gas, and mining industries.

Tell Chevron to stop the back-room deals that open the door to corruption and keep people in poverty.

Chevron advertises itself as a protector of the planet. So why isn't it agreeing to let the public see what it pays to foreign governments?

With your help, we can pressure Chevron to make a real change in its policies – and help millions of poor people in the process. Please share this alert with your friends and family.


Raymond C. Offenheiser
Oxfam America Advocacy Fund

P.S. While Chevron publicly says it's in favor of transparency, its policy is to reveal payment records only with official requests from foreign governments – the same governments who are accepting secret payments! Let Chevron know it's time they came clean.

Send a message to Chevron's management: It's time to come clean on your secret payments to foreign governments – so poor people can get the schools, health care and jobs they need.
As I read this I am reminded of the arguments made by US politicians as they debated the legalization of gambling in New Jersey and how the revenues from gambling would help fund education. It is amazing how many ways governments have to divert money later to more politically convenient activities. The problem of greed and political expediency is universal ... and the oil industry and the host governments are merely engaged in what they have always done! Worse ... the total absence of accountability it really obscene!

Peter Burgess

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