Extractive Industries Transparency Initiative

By Sam Laidlaw, Executive Vice President, Business Development
ChevronTexaco Corporation

Multistakeholder Conference

London, England

Transparency is one of the fundamental values which guide ChevronTexaco's business conduct throughout our worldwide operations. With this commitment and our belief in the importance of the multistakeholder approach that the Extractive Industries Transparency Initiative (EITI) process advocates, we are enthusiastic supporters of this important meeting.

We applaud those who have worked so hard to bring such a strong gathering of political, business and civic leaders here today. In particular, we would like to give recognition to Prime Minister Blair for his vision and commitment and to his staff at the Department for International Development for their even-handed and focused work. We also recognize the support of the U.S. government in this process.

This meeting is an important step forward in the pursuit of a goal on which we are all clearly aligned: the responsible accounting and management of the revenues generated by oil, gas and mining extraction.

Within ChevronTexaco, our people are guided by a clear value statement — something we refer to as The ChevronTexaco Way. It clearly states that we will adhere to the strictest ethical business dealings. Or put more succinctly: We will get the right results, the right way. There is no room for ambiguity, and all employees know the behaviors expected of them, and they in turn know what to expect of those who manage the company.

This brings me to the value we see in the type of principles under discussion in the EITI. These principles can bring all parties to a common understanding and agreement on the values to which we will all aspire.

There have been many transparency 'change initiatives' put forward over the past few years. A constant message from ChevronTexaco has been that, for any of these initiatives to be meaningful and achievable, they must meet several fundamental criteria. I think these merit brief mention, because they are as important in guiding us going forward as they were in getting us to this point today.

  • Any transparency process must honor the sanctity of contracts, because any actions or initiatives that would undercut this most fundamental building block of global commerce would fatally undermine economic growth, social development and prosperity.
  • The process needs to continue as an inclusive one, without a unilateral focus on companies. We have to acknowledge the fundamental issue is the need to balance both sides of the oil, gas and mining revenue ledger sheet — the payments by companies into the government treasuries, against an accounting of receipts of those funds by the various components of that government.
  • The process as we move forward must remain voluntary. This ensures a level playing field, since market-oriented mandatory "fixes" applied to public companies often won't affect many of the world's largest oil players. At the same time, we should be mindful of past lessons: Attempting to dictate to governments how to behave is often neither particularly productive nor reflective of unique cultural differences – we all need to remind ourselves that corruption was not invented in the developing world nor has it completely disappeared from the developed world.
  • And perhaps most important to an oil company like ChevronTexaco: Host government participation in the process is essential. We cannot – and we will not – act unilaterally without the full consent and participation of our partners in government.

I list these criteria to underscore the fact I believe the EITI has so far successfully adhered to them. In other words, we do consider this initiative meaningful and achievable.

We are proud to have actively participated in the constructive dialogue process that EITI launched, one that has carefully and transparently brought together governments, industry, international financial institutions (IFIs) and civil society to agree to address a difficult global development issue.

Finally, I would close with a reminder and a challenge, in case anyone is under the impression that all the hard work has been done. There is today, as there has always been, the need for realism to accept that a framework for transparency of payments and receipts of extractive industry funds will not, in and of themselves, lead to an end of corruption. Political will and the properly functioning tools of internal audit and public accountability are key. We should not lose sight that building the capacity to fight corruption is paramount.

And the challenges remain for each of us. The G8 governments now driving this initiative should be prepared to share leadership with host governments. The IFIs, especially the International Monetary Fund which we hope will play a leading role in this initiative, must be prepared to dedicate the resources and commit the necessary political will and persuasive powers to carry it forward. Civil society must organize and engage constructively, while continuing to monitor the process and remind its participants of the unique opportunity we all have to work together to affect real change.

And for our part, companies must continue to demonstrate their commitment to implement the agreed aims of the initiative. On behalf of ChevronTexaco, I promise that commitment.

Thank you.

Updated: June 2003