Global Policy Forum

Oil Giants Get Slick with Bid for New Image

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Guardian
February 2, 2003

Oil is a dirty business. It always has been an unhealthy cocktail of coups, cartels and carbon dioxide.


Images of seagulls caked in crude on the northwestern coast of Spain, the unpleasant jockeying for position between Big Oil firms in Iraq and its overthrowers, or their hand in scuppering global environmental agreements, have dominated the headlines over the past few months.

So it came as a surprise when some of the world's biggest oil companies crept on to ethical business indices. And it was less of a surprise when some began to be thrown off last month.

For all the softly spoken expensive advertisements proclaiming Big Oil companies as respecting ancient maritime graveyards in the Philippines, in the case of Shell, or going beyond Petroleum for BP, campaigners say that not a great deal has changed. Big Oil may have started doling out jobs to some of its detractors, but the residue of campaigners have, if anything, intensified their battle, especially against US company Exxon, which is also the biggest.

It's partly a function of greater global sensitivity to the influence of Big Oil companies over politics. President Bush's campaign funding, his appointment of a string of former oil executives to powerful positions in Washington, Dick Cheney's Energy Review, the withdrawal from the Kyoto protocol and even the notion of renewed conflict in the Gulf are suggestive of a slick behind-the-scenes lobbying operation.

In the US, Exxon exerts the most influence. In Britain, BP's close links with the government have led to the nickname 'Blair Petroleum'. In keeping with that monicker, BP has developed a third way between gas-guzzling and crusading environmentalism. BP promises 'to be a force for progress as well as competitively successful'. It has cut its own carbon emissions well ahead of target, yet has not done enough to commercialise alternatives to fossil fuels.

It can adopt biodiversity action plans, yet promotes a £2.3 billion Caspian oil pipeline that threatens to wipe out Kurdish villages in Turkey and ruin a region of outstanding natural beauty in Georgia. It can adopt a policy of not giving political donations but lobbies the government to ensure a level playing field for oil companies in a regime-changed Iraq.

And Lord Browne of Madingley can safely suggest that he backs the Kyoto Protocol on climate change, yet also lobby for the opening up for oil exploration to the Arctic National Wildlife Refuge in Alaska. The gap between presentation and action is only as wide as it is among BP's customers. Generally, the public has been shown to be concerned about the environment, but not concerned enough to alter their personal fuel consumption habits.

'BP understands the paradoxes of today's world - that wants both mobility and a cleaner environment,' says a new BP branding campaign in the US. 'We can't do everything at once, but we can do something to address these concerns. We believe that we can show, year by year, that the products we supply contribute to a progressive improvement in air quality without denying people the freedom of mobility.'

The central theme of the campaign is that 'it's a start'. BP reassures its public that it is seriously pursuing sustainability around the world - within reason. Its decision to publish an annual social and environmental audit - this year's is currently being written - puts it near the top of the tree for best practice. BP found itself in the myriad ethical investment indexes. Indeed, its own £13bn pension fund employs a socially responsible investment company called Innovest. But the 2001 image makeover, which included the new flower logo, has also set higher hurdles for expectations of its corporate standards.

Back in Alaska a storm is brewing over BP's safety standards at its existing drilling sites. Last year, while on probation for illegal waste dumping, there were 130 recorded injuries, 70 vehicle incidents and the death of a contractor after the explosion of a well. Another fatal accident in November, on a Norwegian North Sea Oil platform, saw a severe reprimand. 'Many and collective violations' of health, environment and safety standards were reported by the Norwegian Petroleum Directorate.

Henderson's ethical investment arm dropped its 300,000 BP shares after months of talks over the safety record. One of BP's top 20 shareholders - Isis - demanded to know whether aggressive cost-cutting to restore its financial position had led to compromises on safety. The Universities Superannuation Scheme - a top 30 shareholder - asked why laudable corporate policy initiatives were not trickling down into 'action on the ground'. Other large shareholders, including the Methodist Church and the Environment Agency, are pondering a decision on BP shares.

BP could be forgiven for putting the whole 'beyond petroleum' strategy on a back burner. A volatile oil price and a plummeting share price are the short- term concerns of the company. But the dumping of its shares by ethical investment funds, though financially insignificant, is a slap in the face for its strategy of openness. The worry must be that adopting such high-minded principles merely shows up the moral principles that are inherent to the murky world of fossil fuels. The concerns over safety may ultimately shine a light on the Baku-Ceyhan pipeline.

BP is the dominant member of the 10-company consortium building the 1,087-mile pipeline, which will connect Azerbaijan's oil fields with ports on the Turkish coast. Work is due to start soon. BP inherited the project after its purchase of Amoco, and is seeking interest- free public backing from the World Bank and European Bank for Reconstruction and Development. Kurdish campaigners say that the pipeline will prevent the return of Kurds to villages abandoned after years of civil war. A decision from the World Bank, EBRD, and the Department of Trade and Industry is expected by the summer.

Either way, BP's much-heralded commitment to sustainability will be put to the test. As socially responsible investment teams emerge from their ghetto and start influencing more conventional investment decisions, worthy principles suddenly become a yardstick against which performance can be measured. So is it worth the candle?

In the US, Exxon does not really pretend. It makes the case for fossil fuels. It funds US citizens' groups that push the issue of fuel consumption as an inherent dimension of freedom.

There has been a huge growth in campaigning groups that arrange mass email protests at 'communist' newspaper articles supportive of environmental concerns. It funds scientists that doubt the validity of climate change. And it was instrumental in the Bush administration's abandonment of the Kyoto protocol and its new energy strategy. But uniquely, Exxon has also been singled out for special treatment by environmental campaigners. Stickers, petitions, leaflets, adverts and posters encourage the public to Stop Esso by boycotting it in a manner avoided by BP.

'We have the specific goal of stopping Exxon sabotaging Kyoto. It's the worst on all counts - but that doesn't make the other companies all right,' says Cindy Baxter of the Stop Esso campaign. So BP's efforts have come to some use so far. But 'it's a start' has only a limited shelf life.


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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.