Statement on U.S. Government Withdrawal from EITI
Yesterday the Department of the Interior (DOI) of the United States communicated the country’s withdrawal from the Extractive Industries Transparency Initiative (EITI). U.S. withdrawal from EITI represents further backsliding by the U.S. government in its once-pioneering commitment to transparency and accountability in the extractive sector, both nationally and globally. It comes nine months after the U.S. Congress and president reversed the rule implementing section 1504 of the Dodd-Frank Act.
Despite nearly five years of commendable effort by many members of the U.S. EITI multi-stakeholder group (MSG), and the ongoing work of DOI staff to maintain a natural resources web portal, DOI sent a letter to the chair of the EITI international board yesterday stating that domestic implementation of EITI did not “fully account for the U.S. legal framework.”
In fact, no legal obstacle exists. Companies’ unwillingness to disclose taxes paid to the U.S. government (a cornerstone of EITI implementation) has been a major challenge in the U.S. since it became an EITI candidate country in 2014. The first U.S. EITI report published in 2015 exposed the lack of support from many companies—few of the 44 companies required by EITI to report taxes paid did so. The fact that some other companies, such as Kosmos Energy, voluntarily disclosed taxes as recently as last year clearly demonstrates that U.S. law does not prohibit companies making this information public.
Originally, American oil companies refused to report taxes through U.S. EITI on the premise that they would only do so when required by law; that law is Dodd-Frank Section 1504. The rule implementing 1504 required oil, gas and mining companies listed on U.S. stock exchanges to publicly disclose the payments (including taxes) that they make to governments around the world, including the U.S. government. However, at the same time, the American Petroleum Institute (API) lobbied heavily for the implementation of the rule to be reversed. Civil society organizations raised concerns, calling for the removal of the API representative from the MSG for this act of bad faith. The reversal came soon after the current presidential administration assumed office.
ExxonMobil and Chevron (members of the API) currently represent industry as members of the EITI International Board, which also includes representatives from governments and civil society. The U.S., the government of which has a seat on the EITI international board, will continue to be a “supporting country” of EITI, according to the letter.
For more information contact:
Lee Bailey
Communications Director
Natural Resource Governance Institute (London)
[email protected]
T +44 (0)20 7332 6114
M +44 (0)7823 442 954