Statoil Withholds Support from Lawsuit against Transparency; Dutch Government Pledges Support for EU Transparency, Resisting Pressure from Shell

Country: Europe
Facebook logoTwitter logo

NEW YORK—Oil companies should demonstrate their commitment to transparency by following the lead of Norway’s state-owned oil company in distancing itself from a lawsuit against a landmark U.S. anti-corruption measure, Revenue Watch said today.

Statoil, the Norwegian oil exploration and production company, in a letter to Global Witness, confirmed it does not support a lawsuit brought by the American Petroleum Institute (API), the U.S. Chamber of Commerce and others against the U.S. Securities Exchange Commission (SEC). Their lawsuit seeks to overturn section 1504 of the Dodd-Frank Act, requiring U.S. public oil, gas and mining companies to disclose their payments to governments. Statoil is a member of API and listed on the New York Stock Exchange.

“Statoil’s decision to not support the lawsuit underscores that transparency reforms should not be viewed as a threat to companies,” said Daniel Kaufmann, Revenue Watch president. “We welcome Statoil’s stance, joining a number of prominent mining companies that support disclosure and repudiate corporate opacity.”

“The critical information U.S. law now requires will help combat corruption, benefitting investors and industry, as well as citizens in oil-producing countries,” Kaufmann said. “The integrity question is why some companies, like Shell, continue to vigorously challenge such an apolitical disclosure standard.”

Statoil, in its letter, noted that since 2007 it has disclosed all payments to foreign governments on a country-by-country basis. “We believe that such reporting is not an impediment for doing business,” said Baiba A. Rubesa, vice president for corporate social responsibility, “but has been a competitive advantage for Statoil.”

The European Parliament is scheduled to vote this spring on similar transparency legislation, which Royal Dutch Shell and other oil companies are lobbying to weaken. The Dutch cabinet today pledged to support a law that is consistent with the U.S. measure, which does not include exemptions for company disclosure. This development further isolates Shell in its opposition to U.S. and European transparency standards.

Shell’s lobbying for exemptions attracted strong criticism earlier this week from George Soros, founder of the Open Society Foundations, a major Revenue Watch funder; and Alan Detheridge, a former Shell executive and now a Board member of Revenue Watch.

“Regrettably, a number of oil companies including Royal Dutch Shell are putting pressure on European governments to weaken these rules,” Soros said, in an op-ed published in the Dutch newspaper Het Financieele Dagblad.  “Shell is also a member of a U.S. oil industry association, which is going to court to try to overturn U.S. legislation passed in 2010, and is therefore fighting these laws on both sides of the Atlantic.”

“If the number of countries with these progressive laws went from one to twenty-eight, a new global standard of transparency would be achieved,” Soros said. “If Europe fails to deliver this major advance soon, hard won progress to increase transparency in the oil, gas, and mining industries could be put at risk.”

Former Shell executive Detheridge, in an op-ed published online by The Guardian, urged the EU to oppose efforts by Shell and others to undermine the proposed disclosure law by seeking numerous exemptions from reporting.

“I hope that European governments will resist this pressure and stand up for transparency. The European rules should require reporting in all countries, and for every project, with no exemptions,” Detheridge said.

Statoil has chosen not to stand in the way of growing global demand for detailed, mandatory disclosure, and Shell and other oil companies should follow suit. What remains clear are the enormous benefits transparency can bring to investors and citizens around the world.

Robert Ruby, Head of Communications (New York)

More Information:

The Wrath of Math: Big Oil's Claims Against Transparency Don't Add Up

Transparency Supporters Counter Big Oil's Legal Challenge to SEC Rules

API Ignores Momentum Toward Transparency

Advancing Transparency, Battling Its Oil Industry Opponents

Oil Companies' Lawsuit Seeks to Undermine Global Transparency

EU Pushes for Transparency for Oil, Mining Payments