Tuesday, September 20, 2011

Piping Profits: Mapping the Extractive Industries corporations

Former Observer journalist Nick Mathiason has just written a major report with Publish What You Pay Norway, entitled Piping Profits with a descriptive subtitle that goes like this: Mapping the 6,038 subsidiaries owned by ten of the world’s most powerful Extractive Industry giants and the quest by Latin American journalists to find out more. Note that the subsidiaries contained here are the only ones deemed materially important: in all likelihood there are plenty more.

Most intriguing. Here are some key take-outs from the report:
  • Ten of the world’s most powerful Extractive Industry Giants with declared revenues of $1.8 trillion control 6,038 subsidiaries, with over a third (2,083) incorporated in Secrecy Jurisdictions.
  • The global Extractive Industry’s favourite place to incorporate by far is the US state of Delaware with 15.2% of all subsidiaries located there.
  • The second favourite Extractive Industry Company (EIC) Secrecy Jurisdiction is the Netherlands, where 358 subsidiaries belonging to EI giants are based [TJN: also note our earlier blogs on the Netherlands' NRC newspaper reporting, which identifies a lot of information about extractive industries companies].
  • Chevron is the most opaque EIC major in this study. 62 percent of its 77 subsidiaries are located in secrecy jurisdictions; ConocoPhillips is next, with 57 percent of its 536 subsidiaries incorporated in secrecy jurisdictions.
  • Over 56 percent of the 783 subsidiaries of three North American oil majors (Chevron, Conoco and Exxon) are incorporated in secrecy jurisdictions.
  • Glencore International AG is the most opaque mining company in the Piping Profits survey with 46% of its 46 subsidiaries incorporated in Secrecy Jurisdictions.
With lots more to note, such as a powerful Corporate Ownership organogram showing the pipe-like construction of Barrick Gold Corporation, the world’s biggest gold miner.

The project features Bolivian and Ecuadorian journalists and campaigners who set out to get key financial and operational question to test whether country-by-country reporting is needed.

The project creates a Web-based database which maps every subsidiary and its incorporation location owned by:
  • BP
  • Chevron
  • ConocoPhillips
  • ExxonMobil
  • Royal Dutch Shell
  • Anglo American
  • Barrick Gold Corp
  • BHP Billiton
  • Glencore and
  • Rio Tinto
This will be available soon to academics, campaigners, journalists and other interested parties.

The Guardian carries the story here, and notes that:
"The definition of a secrecy jurisdiction was based primarily on three sources: a list of offshore financial centres published by the International Monetary Fund; a list drawn up by the US tax collection body; and a secrecy index by the non-governmental organisation the Tax Justice Network."
Note also that our next Financial Secrecy Index will be coming out very soon.

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