Global Policy Forum

By Terry Macalister and Michael White

BP, Britain's biggest company, is to scrap all political donations worldwide as criticism mounts about corporate influence on government policy, following the Enron collapse in the US and the "Garbagegate" row in Britain. The world's third-largest private sector oil group donated $840,000 (£600,000) in the US last year. Its close relations with the British government - with key executives moving between the two - have left it dubbed "Blair Petroleum", athough it has made no political donations in Britain for a decade.

Lord Browne, BP's chief executive, told a meeting of the Royal Institute of International Affairs at Chatham House in London that large multinationals must tread warily from now on. " "We must be particularly careful about the political process because the legitimacy of that process is crucial both for society and for us, a company working in that society. "That is why we've decided, as a global policy, that from now on we will make no political contributions from corporate funds anywhere in the world. We'll engage in the policy debate, stating our views and encouraging the development of ideas, but we won't fund any political activity or any political party."

Company officials denied the Enron affair had influenced its judgment and made clear it would not halt its lobbying of governments.

The move comes at a sensitive time for Downing Street. This month Tony Blair was accused of helping a party donor, Indian billionaire Lakshmi Mittal, with a Romanian steel deal - and yesterday the Guardian revealed that another business donor, Uri David, is under investigation for helping to launder money in Switzerland.

Last night the issue prompted a call for a "mature debate" on the problems of party finances from the leader of the Commons, Robin Cook, a long-time supporter of state funding for political parties. "We cannot simultaneously say the Labour party cannot be funded by trade unions, that no party should be funded by business and at the same time say "you're not going to get taxpayers' money". Political parties have to be funded by someone," Mr Cook told reporters at Westminster.

BP and rival Enron were regarded by some government ministers in the past as arms of the foreign office and close ties remain.

The prime minister's right-hand woman Anji Hunter recently moved over to become director of communications at BP. Company director David Simon - now Lord Simon of Highbury - moved the other way, becoming a minister for competitiveness in Europe.

Among other users of the revolving door between Whitehall and BP is Byron Groat, head of chemicals at BP, who has been helping the Department of Trade and Industry on competitiveness issues, while Bryan Sanderson, a former head of BP's chemicals division stepped down and became chairman of the government-backed Learning and Skills Council.

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.