The Extractive Industries Transparency Initiative (EITI) was founded on a clear principle: companies should report what they’ve paid to governments in exchange for oil, gas, and minerals, and countries should report how much money they’ve received. These disclosures help citizens hold their governments accountable for their use of natural resource revenues, so that the funds are used for their countries’ development rather than siphoned off to corruption or lost to poor governance.

In the 20 years since its founding, the organization’s multi-stakeholder Board–including equal representation from companies, country governments, and civil society–has increasingly required more expansive disclosures from its members. But despite being a founding member of EITI and sitting on its Board for years, ExxonMobil has yet to meet the most basic disclosure requirement–project-level payments to governments in all countries of operation.

Even worse, in 2021, Exxon got caught lobbying the US Securities and Exchange Commission (SEC) against a rule that would require project-level payments-to-governments disclosure in line with the EITI. As an EITI Board member, Exxon should have been promoting this rule, rather than lobbying to make sure the US has weaker transparency regulations. And, Exxon’s efforts have been successful: when the SEC finalized the rule–after more than a decade having passed since the US passed its landmark payments-to-governments transparency law (Dodd-Frank 1504)–it mirrored Exxon and its American Petroleum Institute allies’ proposal, gutting the EITI-aligned project-level disclosure requirement.

Upon discovering Exxon’s lobbying activity, Publish What You Pay-US (PWYP-US), a civil society organization, brought a complaint to the EITI, calling for Exxon to be removed from the Board. The EITI Board ultimately decided not to remove Exxon at that time, and the Board Chair instead tasked the Board with creating more rigorous expectations for EITI Supporting Companies and creating a mechanism to enforce them.

The EITI Secretariat–who is charged with advancing the day-to-day operations of the initiative–also carried out an initial assessment of companies’ compliance with the EITI’s Company Expectations. In what was surely a surprise to no one, the assessment revealed that Exxon was not meeting the Expectations, and particularly failed to meet the expectation requiring project-level payments-to-governments disclosures in each jurisdiction where it operates.

The Board answered the Chair’s call by clarifying and strengthening its Company Expectations, including adding new provisions. It also agreed to evaluate its member companies against these Expectations in advance of each members’ meeting (these typically take place every three years). While some progress was made towards creating accountability for companies that don’t meet Expectations, ultimately the enforcement mechanism is still too weak: the only real penalty companies face for being non-compliant with the EITI’s Company Expectations is that they shouldn’t be considered for the representation on the EITI Board.

And yet, despite still failing to meet this core requirement, ExxonMobil has once again been nominated for a leadership role on the EITI Board. No other company nominated to the Board fails to meet this requirement.

Voting will take place on Monday, June 12, in Dakar, Senegal

Exxon has been nominated by the company constituency, including its fellow current Board members: AngloAmerican, BHP Foundation, BP, Equinor, Kosmos Energy, Newmont Corporation, Rio Tinto, Shell, TotalEnergies, and Trafigura. It is unclear why these companies–which do comply with the EITI’s project-level payments-to-governments disclosure requirement–would nominate a representative that fails to meet this basic expectation.

Beginning Monday, the EITI will convene its Global Conference in Dakar, Senegal. At the Members’ Meeting on the first day–the first such meeting in four years–the EITI plans to confirm its new Board. According to EITI procedures, there is no option to vote down a single Board nominee–members must either accept or reject the entire Board slate, including all company, country, and civil society representatives.

If companies do not replace Exxon’s nomination with that of a compliant company, they may cause deadlock in approving a new Board.

EITI Secretariat Hides Important Data

When the EITI dismissed the complaint against Exxon, PWYP-US withdrew its membership in EITI, decrying the organization as being captured by the corporate members of its Board. Over the intervening year, Oxfam has observed closely, trying to push for accountability at the EITI, particularly around Company Expectations. In the lead up to the members' meeting in Dakar, we have been dismayed by the EITI Secretariat’s role in protecting companies from public scrutiny.

When offered an opportunity to comment on this blog, the Secretariat claimed that it “has followed the Board-agreed process, which all constituencies discussed and agreed.” However, Oxfam staff have attended the relevant meetings and are aware that the process proposed never came to the Board for decision, only for information, and was met with strong opposition by multiple Board members in multiple meetings.

According to the updated Company Expectations, the EITI Secretariat is expected to evaluate companies against the Company Expectations ahead of the Members’ Meeting, publishing results after company review. Less than one week before the meeting in Dakar, the Secretariat is yet to publicly disclose any results of this evaluation. The Secretariat says that the “the publication of results is driven by the tight timeline required to complete the assessment.” Yet the timeline was clear more than a year ago, in February 2022 when the Company Expectations were revised and the Board agreed to an assessment process that would inform Board nominations.

Civil society Board members are actively calling for the EITI Secretariat to share disaggregated results, rightfully explaining that it is impossible for members to vote on a Board when they cannot know whether or not companies are compliant with Expectations.

The Secretariat has said it will publish disaggregated results one week after the conference in Dakar–far past the point of usefulness for consideration in Board selection.

While we call on the EITI Secretariat to do its part in promoting transparency and release the disaggregated results without further delay, even without those results, a simple review of Exxon’s public disclosures shows that the facts remain the same: Exxon is still not disclosing its project-level payments-to-governments data. As such, the company should not be on the EITI Board.

Exxon’s Inclusion Undermines EITI’s Credibility

As the global standard for transparency and good governance in oil, gas, and mining, the EITI is in the unique position of setting best practices for the industry. When a company like Exxon, which is set on deterring global progress on transparency, manages to capture a Board seat, it holds back the entire organization. It makes it more difficult to revise the EITI Standard to include critical updates needed to inform a just energy transition and the global energy future, such as mandatory and comprehensive disclosures of greenhouse gas emissions, fossil fuel subsidies, or energy transition plans and forecasts.

Having a company on the Board that does not meet expectations–and indeed lobbies against the EITI–risks reducing the EITI to a corporate greenwashing exercise, a stamp of approval that companies can buy to make it appear as though they’re doing their part to promote good governance.

Having a company in a leadership role in the organization that doesn’t meet its basic requirements also makes the designation of “EITI-Supporting Company” essentially meaningless. Investors will not be able to look to a company’s engagement in EITI as a component of evaluating a company’s standing on environmental, social, and governance (ESG) standards.

Further, in not enforcing its expectations for Supporting Companies, the EITI faces a major credibility challenge with its Implementing Countries. Implementing countries face regular evaluations against the EITI Standard (called “validations”). When countries fail to meet Standard requirements, they are given directions for improvement, suspended, or–in severe enough cases–expelled from the organization. Countries have been pushing for similar accountability for companies, and Exxon’s brazen nomination may undermine the organization’s ability to continue holding countries accountable for meeting their own obligations.

As the world grapples with the climate crisis, transparency is more important than ever. The EITI can play a critical role, but not if it’s being led by those who seek to undermine its core mission.

We call upon other members of the EITI Association to join us Monday in opposing Exxon’s nomination to the Board.