PWYP Norway has analysed and documented Statoil's reporting according to the current country-by-country reporting amendment for the four financial years the company has reported on - 2014, 2015, 2016 and 2017.
PWYP Norway does not know of any other civil society organizations which have done similar analyses concerning which information is revealed, and evaluated the benefit of the information as measured against the purpose, but we are aware of the fact that analysts and investors have taken advantage of this information. It is, however, not possible to estimate the extent of the use of this information among analysts and investors, without conducting an investigation.
Analysis of the financial year 2014
In 2014 PWYP Norway showed, by using available data from Statoil's country-by-country (CBC) report, that Statoil mixed downstream numbers in a report for upstream numbers ("Downstream pollution of upstream numbers", 2014) that exposed both inaccurate reporting and inadequate reporting. The downstream numbers in Statoil's country-by-country reporting concerning upstream numbers resulted in a lack of transparency in the reporting. This provided a foundation for and led to media coverage and parliamentary debate.
The use of data and the attention which followed, caused Statoil to change their reporting the following financial year. Unfortunately for this reason 2014 is not a representative year for CBC reporting in Norway since the inaccurate reporting was never corrected.
Analysis of the financial year 2015
In our analysis of Statoil's CBC report in 2015 ("What Statoil reported and what Statoil should have reported", 2015), PWYP Norway demonstrated that Statoil easily could have reported within a meaningful transparency requirement called extended country-by-country reporting, on just one page.
Statoil reported «purchase of goods and services» instead of «expenses», but cannot alone be faulted for an inadequate report on expenses in this report since they were adhering to an inadequate amendment. Meanwhile the report clearly showed that even a large company like Statoil can report the requested principle information on just one page. This is one of the reasons why PWYP Norway believes that the principle information should be included in the notes to annual financial statement, and not only as an additional report. The link to the accounting information where these numbers are derived will then become much more clear, the information will be linked to the accounting numbers, and since the accounting numbers are already revised, no further revision is required.
Analysis of the financial year 2016
Our analysis of Statoil's CBC report for 2016 (”Hullene blir mindre” ("The holes are shrinking" in English), 2016), revealed that Statoil's country-by-country reporting is getting better and better. It is an improvement that the CBCR information is now reported along with the accounts, even though it is not part of the annual financial statement yet. Nevertheless this is still not the complete report with all the principal information in one place. A reader has to collect numbers from several places in order to see the full picture, and it is still not possible to reconcile paid taxes in the accounts with paid taxes per country.
The industry has argued that the accounts do not reveal taxes paid, but that is not the case. All taxes listed in the accounts are taxes paid (gone out of the account). It is only when compiling the annual financial statement that tax provisions are produced so that it becomes clear what is left of tax payments till next year. Before adding the tax provision, all tax information in the accounting is information about paid taxes. The industry and accountancy firms´ arguments to keep principle information outside the notes to the annual financial statement cannot be taken seriously. In addition to taxes paid in the accounts, one also finds the payments to authorities which are NOT part of the accounts, typically the authorities´ part of the production in Production Sharing Agreements (PSAs). However, these taxes can be reported outside of the note to the accounts, because these numbers do not exist in the financial statement. The note should only include taxes paid and fees in accounting, while other supplemental information would be reported in the CBC report.
Analysis of the financial year 2017
The weaknesses are clearly showing ...but the regulator is sleeping
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How have the analyses been used?
The first analysis in 2014 attracted the most attention and big media coverage, and a debate in Parliament. The public debate is, however, only one aspect of the CBCR reporting. More important is how the numbers are actually utilized, and here analysists and investors are the largest user groups.
Where PWYP Norway's own use is concerned, the first analysis has been published in Norwegian, English, and Spanish, the second analysis is published in Norwegian and English, while the third analysis is only published in Norwegian. The analyses are distributed in our international network and picked up by local news media such as in Angola. For example, Deutsche Welle published an interview with PWYP Norway about Statoil and Angola in connection with the case "Poderao as empresas petroliferas financiar a corrupcao em Angola?" (dw.com April 15. 2016).
PWYP Norway´s assessment is that it is an informed civil society that makes a democracy possible, and that a process of accountability in Angola necessarily will take time, since the dictator in Angola can maintain his power through funding with exactly those financial mechanisms that PWYP Norway is combatting. A prerequisite for building authoritarian regimes is precisely the possibility of enriching themselves at the cost of the community and to cover up any evidence of that.
PWYP Norway wishes to point out that a simple measure for transparency - within one sector - is by itself inadequate for "making authorities accountable". At the same time, we believe that transparency is in itself good for communities and allows citizens to have an informed debate, which is a prerequisite for a democracy.
Open societies have some qualities and common denominators that closed societies do not have. This can easily be retrieved in existing literature. Much can also be derived from Norwegian defense studies about how demanding it is to hold authorities accountable in «closed societies», for example Angola and Russia. That can also be challenging in "open societies". We saw that the already introduced transparency requirement which was supposed to keep authorities accountable was removed by the authorities themselves in the USA when Trump got in power.
Globalization of the CBCR principles in their correct context - and why they are so important - is in and of itself important in order to place the various actors in a position to keep authorities accountable.