The investor forum examining Chevron’s tax problems was held today at the United Nations’ Principles for Responsible Investment (UNPRI) office in London.
Richard Murphy a co-founder of the Tax Justice Network, and a key advisor to Labour leader Jeremy Corbyn, spoke at the forum on the changing environment for tax planning by multinationals.
Mr Murphy said, "It's very obvious that some investors are taking a great deal of interest in the tax risk inside the companies in which they invest and are demanding more information from them. Some companies are responding well, and even with enthusiasm, to these demands.”
“Companies like Chevron have not acknowledged the changing environment and continue to pursue aggressive tax minimisation at all costs. Chevron shareholders should be demanding enhanced disclosure and transparency on tax planning to ensure that risky tax strategies don’t undermine the long term value of their investment,” Mr Murphy said.
The briefing also heard from the International Transport Workers’ Federation (ITF) on the increasing costs Chevron are facing from adverse court decisions and tax office audits. Investors were given an overview of the landmark Federal Court judgement in Australia concerning a $2.5 billion loan. The case brought by the Australian Tax Office (ATO) left Chevron with an amended tax bill of nearly AUD$300 million and is expected to be a major test case of global thin capitalisation rules when Chevron’s appeal is heard.
The court judgment also has major implications for Chevron’s massive Gorgon Project and its $35 billion related party loan. The loan is currently under an ATO audit with the potential for it to cost Chevron several billion dollars in back taxes given the issues being examined are very similar.
Last week Chevron appeared before the Australian Senate Inquiry on Corporate Tax Avoidance where it was labelled as Australia’s largest tax dodger and received bipartisan condemnation.
Paddy Crumlin, president of the International Transport Workers’ Federation and vice-chair of the Committee for Workers’ Capital, opened the London investor forum. He stated that changing attitudes towards tax planning in corporate board rooms and governments have real implications for shareholders.
“We know that governments are now more closely scrutinising promises made, corporate structures and financing arrangements before granting project approvals on large resource projects.”
“Inaction on enhancing transparency on tax planning will put Chevron at a serious disadvantage in the global competition for exploration and production licences in new markets” Mr Crumlin said.
Ends
Media Contact: Shannon O’Keeffe +61 420 928 780: email: okeeffe_shannon@itf.org.uk
Post new comment