Our approach

Shell’s position on the issue of payments to governments is that, wherever possible, such disclosures ought to be made in the interests of transparency and good governance.

In 2006, we paid governments over $17 billion in corporate taxes in 2006, and $1.6 billion in royalties. We collected $71 billion in excise duties and sales taxes on their behalf.

Supporting the Extractive Industries Transparency Initiative

We are a leading corporate supporter of the UK Government’s Extractive Industries Transparency Initiative (EITI) and in 2003, with the permission of the Nigerian government, became the first company to publish the royalties, taxes and other payments made to that government. See the Nigeria case study. Over the past year, Shell has extensively engaged in the EITI process, at the international level with participation at the Oslo Conference as well as the first two Board meetings in New York and Berlin as well as at the country level in Nigeria, Cameroon and elsewhere.

The EITI aims to increase the transparency of all oil and mineral revenue received by host governments, whether from payments made by private companies (e.g. signature bonuses, taxes and royalties, etc.) or profits from state-owned companies. We fully endorse this inclusive approach and believe that the drive to increase transparency needs to apply to all companies, regardless of whether they are private or state-owned.

In 2006, we stepped up our involvement in EITI, becoming a board member designate. And we continued our support to programmes in Azerbaijan, Cameroon, Gabon and Kazakhstan. We again reported payments to the Nigerian government.

Should only aggregated company payments be disclosed?

Some have argued that, in order to fulfil EITI’s mandate of increasing the transparency of oil and mineral revenues received by host governments, it is unnecessary to disclose annual payments made by individual companies.  Instead, these amounts could be aggregated by an independent aggregator – and the total amount published for comparison against government receipts. Supporters of this approach argue that, amongst other things, commercial confidentiality is thereby preserved.

Others point out that, while they respect the need to preserve legitimate commercial confidentiality, the publishing of only aggregated payments from companies falls short of the full and open disclosure they seek from the EITI initiative.

Our view is that it is for host governments to decide whether individual or aggregated company payments should be disclosed.

But, having said that, we start from the premise that individual company payments should be disclosed in each country that is implementing EITI – unless there are good and defensible reasons not to do so.

Related links

The Extractive Industries Transparency Initiative – EITI – opens in new window