Our industry makes a major contribution to government finances. In 2007, Shell collected over $79 billion in excise duties and sales taxes on their behalf. We also paid governments over $19 billion in corporate taxes and $1.8 billion in royalties.
In energy-producing countries, these royalties are often the main source of government revenue. Managed well, these funds can bring broad economic and social development. Managed poorly, the money can stimulate corruption, social inequality and conflict. While the responsibility for turning these funds into social benefits lies with host governments, we can help.
One way is by following our policy of zero tolerance of bribes and fraud (see Living by our principles). We recognise we have a responsibility to set a good example by not feeding a culture of local corruption when tendering work to local suppliers or competing for government contracts. Another way is to support governments’ efforts to tackle corruption in the public sector. We are strong supporters of the Extractive Industries Transparency Initiative (EITI), sitting on its board and supporting national programmes in Azerbaijan, Cameroon, Gabon, Kazakhstan and Nigeria. EITI requires mining and oil companies to publish their payments to host governments and encourages those governments to be open and accountable for how the funds are spent. In 2007, we again reported the payments we made to the Nigerian Government from Shell-run operations (see Nigeria). We see the need for the EITI only growing as new competitors pursue business in Africa and Asia.
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