Inflated Transparency Complaints of Oil and Gas Industry

Despite consumer complaints and the unfavorable perceptions of oil and gas companies, evidence suggests that major players in the industry ranked well compared to global counterparts in transparency. Both Statoil and ExxonMobil took two of the top five spots among Transparency Internationals listing of 105 of the worlds largest publicly listed multinational companies. The Transparency International (TI) ranking system is based on a scale of 0 to 10, with an index score of 10 being the most transparent and 0 being the least transparent. This scoring system, which is consistent regardless of the industry and regulatory regime under which the company operates, considers three factors. These factors include how openly a company reports its anti-corruption efforts, how clearly a company is structured and where it is located, and the level of transparency a company exhibits in making financial and non-financial contributions to the countries where they are located. Roughly 16 percent of the companies in TIs listing represent the oil and gas industry. Furthermore, 10 of the 17 oil and gas companies listed earned scores above 5, including U.S.-based ExxonMobil, Chevron and Occidental Petroleum. In addition, the average score for all 17 of the oil and gas companies listed is 5.2, putting the industry fourth place among the nine industries TI grouped into multinationals. Carl Dolan, senior policy officer with TIs European Liasion Office in Brussels, attributes the higher rankings of the companies making up the Oil and Gas category to their participation in the Extractive Industries Transparency Initiative (EITI) during the past decade. The EITI mission is promoting corporate transparency in countries rich in oil, gas and minerals. Under their global standard for natural resource revenues, companies disclose payment figures to governments, and governments disclose the receipt of such payments. A separate EITI report independently verifies and reconciles these tax and royalty payments.

Participation in the EITI has improved the reporting of financial contributions to countries, improving governance and accountability. Although there is still room for improvement in corporate reporting and other related transparency initiatives, oil and gas companies appear to be making excellent progress compared to other industries. TAP Management and other oil and gas producers are working to reduce complaints surrounding the industry that stem from misguided information.