- Date filed
- 8 October 2018
- Keywords
- Countries of harm
- Current status
-
No resolution
- Sector
- NCP
Allegations
On 8 October 2018, the FNV, ITF, PSI, and IndustriALL Global Union, supported by Friends of the Earth, filed a specific instance against Chevron Netherlands BV and 13 other affiliated entities, all based in the Netherlands, to NCP Netherlands. The complaint concerns alleged breaches of the Disclosure and Taxation chapters of the OECD Guidelines.
The complainants state that tax avoidance is a serious problem resulting in reduced state revenues, limiting the state’s ability to fund essential public services such as health care and education. The complainants allege that Chevron conceals tax-related information of its Dutch subsidiaries in tax avoidance schemes as well as the amount of tax revenue it avoids paying to governments around the world.
The complainants seek disclosure by Chevron, including increased transparency of financial transactions entered into by the company, and the ending of Chevron’s practices primarily designed for the facilitation of tax avoidance by Chevron.
Relevant OECD Guidelines
- Chapter III
- Chapter III Paragraph 1
- Chapter III Paragraph 2
- Chapter III Paragraph 3
- Chapter XI
- Chapter XI Paragraph 1
- Chapter XI Paragraph 2
Outcome
NCP Netherlands coordinated this complaint with NCP United States, which agreed to act in a supportive capacity with NCP Netherlands taking the lead.
On 22 June 2023, NCP Netherlands accepted the complaint for further consideration and offered its good offices to the parties concerned.
Chevron and its related entities subsequently refused the NCP’s good offices. Subsequently, the NCP conducted an independent further examination.
On 24 March 2022, the Dutch NCP published its final statement. In relation to Chevron’s disclosure practices, the NCP determined:
‘Considering the absence of information that on the basis of the Disclosure chapter and the commentary may be expected to be freely and publicly available, it is the NCP’s assessment that none of the 14 corporate entities of Chevron et al. seem to observe paragraphs 1-3 of the Disclosure chapter.’
In relation to Chevron’s tax practices, the NCP determined:
‘Given the (absence of) information available, the NCP is unable to confirm that Chevron et al. have any economic activities in the Netherlands. Instead, the NCP assumes that these 14 corporate entities are administered merely by trust companies and therefore their sole function is to operate as letterbox companies for the purpose of tax planning. It is the NCP’s assessment that Chevron et al. have failed to demonstrate, either through freely and publicly available information or by providing answers to the NCP’s questions, that the 14 corporate entities at stake comply with the spirit of the law.’
The Dutch NCP could not conclude based on the information available whether Chevron’s approach to tax complied with the Taxation Chapter. The NCP made a further determination, in view of Chevron’s withdrawal of participation in the NCP procedure:
‘… it is the NCP’s assessment that, regarding the issues raised under the Disclosure chapter, Chevron et al. have not acted as could have been expected from them under step six of the due diligence process, as elaborated in the OECD Due Diligence Guidance for Responsible Business Conduct, i.e. to “Provide for or cooperate in remediation when appropriate”, based on Chapter II General Policies, para A.10 of the Guidelines.’
The NCP also determined that Chevron and its affiliate company’s lack of responsiveness and genuine engagement in the NCP procedure meant that the companies had not acted as expected of them in terms of good faith behaviour involved in these procedures.
The NCP made several recommendations, including for Chevron to align its conduct with the Disclosure chapter and to adapt its tax policy in accordance with increasing worldwide consensus on responsible tax behaviour. The NCP also called for further guidance on the meaning and application of the Disclosure and Taxation chapters to better assist proper interpretation and implementation. The NCP also suggested the development of an OECD Tax Governance Code addressing the ethics of responsible tax behaviour by enterprises.
The NCP undertook to follow-up on its recommendations in one year.
On 18 December 2023, the Dutch NCP published its follow-up statement. The NCP observed that Chevron had not progressed in the implementation of its recommendations, including to increase its country-per-country tax transparency and to follow best practices in relation to the same, and to participate in legitimate remediation mechanisms (such as the NCP process at hand). The NCP concluded that Chevron “has not followed up on the recommendations.” It also expressed regret that Chevron had not cooperated in the follow-up procedure and that complainants remain without the prospect of a satisfactory resolution of its issues.
The NCP also referred to new expectations in the Disclosure and Taxation chapters of the 2023 version of the OECD Guidelines and recommended for Chevron to take steps to align its conduct with the updated text. Some of those expectations had clarified the 2011 text concerning public disclosure but, in the NCP’s opinion, “the expectations concerning public tax transparency still merits further addressing of and alignment with current developments and best practices. Therefore the NCP’s wish for further guidance on this particular matter remains relevant.”
More details
- Defendant
- Company in violation
- Complainants
- Affected people
- Other NCP's where the complaint was filed
- Date rejected / concluded
- 24 March 2022