Chief executive Don Voelte said Woodside would work with host governments to make public production volumes and taxes paid to host governments where local laws and contracts allowed it to do so.

The initiative was launched by United Kingdom Prime Minister, Tony Blair, at the World Summit on Sustainable Development in Johannesburg in 2002. It already has the support of several companies, including Shell, BP, ChevronTexaco and ExxonMobil.

Woodside sought a stronger presence in developing nations and it supported the push towards greater transparency, according to Voelte.

“Transparent reporting of revenues received from the oil industry facilitates analysis of the budetary process,” he told the Australian Petroleum Production & Exploration Association (APPEA) conference in Perth yesterday.

“This enables public oversight of government revenue management. Public reporting by host governments of the financial benefits generated by the oil industry, especially in developing nations, demonstrates a confidence in their own ability to manage revenues and a willingness to be held to account for their performance.

“This fosters an environment which is attractive to foreing direct investment and is a powerful justification in seeking support or aid from the international community.”

Transparency was good for companies as well as governments, Voelte said

“At Woodside, the past month has taught us how easily our reputation can be tarnished when the wrong inferences are drawn over even a modest payment, in this case a donation to a hospital in Iraq,” Voelte said.

West Australian senator Ross Lightfoot had claimed to have smuggled US$20,000 into Iraq to donate to a hospital in Halabja, in Iraq’s Kurdistan region on behalf of Woodside.

“The merits of this donation cannot be criticised,” Voelte said.

“The hospital at Halabja cares for the victims of the horrific 1988 gas attack inflicted by Saddam Hussein on the local Kurdish population. Many children in the town suffer from congenital deformities blamed on that 1988 attack.

“While the donation was entirely proper and justified, our delivery of it could have been better.

“If we had our time over again, we would have tried harder to find a way of paying the donation directly to the hospital rather than the administering local authority, the Kurdistan Regional Government.

“Getting money to post-war Iraq was no easy task, but maybe we could have found a more direct route.”

Voelte said that while the donation was made through the Kurdistan Regional Government, Woodside had no business dealings with this government. It had signed a memorandum of cooperation covering the Kurdistan region, but the agreement was signed with the Iraq Oil Ministry in Baghdad.

“While I am disappointed Woodside’s reputation may have being unfairly sullied, the episode served as in instructive lesson on how payments to governments can be easily misconstrued,” Voelte said.

“Corporations which operate in developing nations can easily be exposed to the risk that their corporate image may suffer from scuttlebutt and innuendo. This type of damage can be detrimental to the ability of the company to enter other frontier regions. To counter this, transparency in relation to the financial benefits generated by the oil industry helps to mitigate this risk if funds are misdirected or mismanaged.”

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