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
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, NCP Netherlands 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.’
NCP Netherlands could not conclude based on the information available whether Chevron’s approach to tax complied with the Taxation Chapter.
NCP Netherlands 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.
NCP Netherlands 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 will follow-up on its recommendations in one year.
- Company in violation
- Affected people
- Other NCP's where the complaint was filed
- Date rejected / concluded
- 24 March 2022