Shell’s tax transparency claims ring hollow

In a ‘methinks-she-doth-protest-too-much’ declaration of transparency love, Shell’s Finance Chief Simon Henry recently wrote an article in the Telegraph stating the oil major’s commitment to transparency, paying fair taxes and seeking better cooperation with tax authorities.

They justified their use of tax havens: “it’s for sovereign nations to determine their own tax rates in accordance with the revenues they want to generate. Businesses like Shell are perfectly entitled to operate in low-tax jurisdictions for legitimate business purposes”. Certainly, when it comes to low-tax jurisdictions, Shell knows what it is talking about. According to a mapping of the FTSE 100’s subsidiaries by Action Aid, over a third of Shell’s subsidiaries are in secrecy jurisdictions. What Shell fails to mention here is that aggressive tax planning or tax dodging can harm both developed and developing countries.

On transparency Shell wrote: “In 2010, Shell paid around $15bn (£9.7bn) in corporate taxes and collected more than $80bn in excise duties and sales taxes on behalf of governments – excluding the royalties, payroll, property and other taxes we pay…The scale of our contribution shows why we are happy to be transparent about the amount of tax we pay.”

What Mr Henry omits in his declared love of transparency is that his company has consistently sought to undermine key elements of US and proposed EU transparency laws for the extractive industries by seeking get out clauses, spreading spurious arguments and trying to propose a form of ‘transparency’ which is not fit for purpose and will help no-one.

Passing off a commitment to transparency by presenting a useless global aggregate tax charge won’t help in calculating whether – as Shell claims – the amount of tax it pays is fair. It belies the fact that they have never agreed to publicly disclose their taxes (or any other payments for that matter) on a country-by-country or project-by-project basis. Such information is essential for citizens to hold their governments accountable for the proceeds of natural resource wealth. When it comes to tax transparency, it’s time for Shell to put its money where its mouth is.