Corporate Crimes

Supporting Repressive Regimes:
BP has interests in China: [134] Both its oil and chemicals divisions operate in the country [135]. The company is keen to capture a slice of the growing Chinese energy market so to this end it has invested $580 million in Petrochina, China’s largest oil company, a subsidiary of the state-owned China National Petroleum Corporation. When Petrochina held an initial public offering in the United States in 2000, BP bought about 20 percent of the $3.1 billion stocks offered [136] and BP has invested a further $2.5 billion in joint ventures with the Chinese National petroleum Corporation [137]. Petrochina is accused of profiting from human rights abuses in Tibet and Sudan and is responsible for the building of the controversial Sebei-Langhou gas pipeline through eastern Tibet which will allow China to appropriate Tibet’s mineral wealth by pumping natural gas from the Sebei gas fields in the Tsaidam basin in northern Tibet to Lanzhou in Northwest China. The estimated cost of the pipeline is $580 million [138]. BP’s investment in Petrochina will provide some of the much needed capital for this project which campaigners claim will be used to rape the resources of a region China is accused of oppressing over its demands for autonomy from Beijing.

Pro-Tibet lobbyists and groups who promote ethical investment filed a shareholders’ resolution at BP’s annual general meeting in April 2001, calling on the firm to dispense with its 2.2 percent stake in PetroChina [139].

“The directors of BP cannot pretend to be ignorant of the genocide . . . that their Chinese business partners and the Chinese government are engaged in both in Tibet and the Sudan”
Kevin Kearns, President of the United States Business and Industry Council [140].

In Sudan BP is accused of operating in areas where human rights groups have reported civilians being killed, bombed and ejected from their homes to permit oil production and the building of pipelines [141].

BP’s defence has been to state that it is not directly invested in the controversial projects [142] but BP and PetroChina signed a joint-venture deal in April 2001 to operate up to 500 petrol stations in the southern Chinese province of Guangdong, China’s largest oil consuming province [143].

BP also leads a joint-venture consortium that includes Japan’s Mitsubishi, Itochu, Nissho Iwai and Malaysia’s Petronas, which is bidding to work with Petrochina on building the 4,200km (2,610 mile) west-east natural gas pipeline from the northwestern region of Xinjiang (Turkestan) to the eastern city of Shanghai. Since 1997, more than 270 Uyghurs (The indigenous Turkestai people) have been sentenced to death and killed for political reasons. Construction of the pipeline is scheduled to start in October 2001 and start providing gas to Shanghai in the second half of 2003 [144].

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Devastating Indigenous Peoples and Wildlife Habitats
In The US, BP is set to be one of the first companies to drill in ANWR (the arctic national wildlife refuge) in Alaska. The ANWR is a pristine 7.5 million hectare area, sometimes called ‘America’s Serengeti’ because of its biodiversity. If and when the Bush administration gives the go-ahead, of course all of the oil majors will want a slice of the ANWR pie but BP has existing operations in Alaska in Prudhoe bay, only 130km west of the refuge [145] and John Brown, BP group chief executive has stated that while BP will not make a decision on whether it wishes to drill in the area prior to any US government announcement about licensing, BP would be in a good position to take advantage of any exploration licences in the area since it is experienced in working responsibly within the fragile artic environment [146]. The reality is a little more controversial: oil exploration has already turned 2,600 square km of fragile tundra at Prudhoe bay into a sprawling industrial zone [147] and BP alone was responsible for 104 oil spills in the region between January 1997 and March 1998. [148] The local Gwich’in indigenous people are outraged at any possible plans to drill within the ANWR. They fear that drilling operations will decimate the caribou heard (one of the world’s largest) and threaten their ancient culture. Other species in the area which are likely to be affected by drilling include grizzlies and polar bears, ringed seals, wolves, musk-ox and 135 species of migratory birds.

The oil lobby are pushing hard in Washington to overturn the existing 20 year moratorium on drilling in the area and with president George W. Bush himself a former oil man (Bush Exploration/Arbusto was sold to spectrum 7 and later acquired by Harken energy) and Alaska’s republican senator Frank Murkowski supporting any attempt to open the ANWR to exploration, it looks likely that BP will soon be drilling in the area, despite the fact that the US geological survey estimates that total reserves within ANWR are unlikely to exceed six months worth of oil for the US at current consumption rates [149].

At BP’s AGM (April 19 2001) more than 7% of BP shareholders supported a resolution filed by the US Public Interest Research Group and a coalition of 131 environmental groups, investors and religious organisations calling on BP to make the transition away from fossil fuels and criticising the company’s stated desire to drill in the Arctic National Wildlife Refuge. The resolution, which received support from an unprecedented thirteen percent of shareholders at last year’s meeting, was rejected by BP on technical grounds. BP contended that US owners of American Depository Shares do not have the same rights to file shareholder resolutions as investors with ordinary shares in the United Kingdom. Athan Manuel director of PIRG remained determined, however. “We are going to keep pushing BP to stay out of the Arctic and go solar, year after year” he said [150].

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Fuelling Unrest In Troubled Areas
BP is the dominant company drilling in the southern Caspian Sea and leads the Azerbaijan International Operating Company (AIOC) an international consortium of 11 oil companies who have yet to decide whether they will build the Baku-Ceyhan pipeline [151] which would be used to export Caspian Sea oil to Turkey and on to Europe and Israel. Shareholders could sanction construction work in the second half of 2002 and oil could come on line by the end of 2004.

The consortium hopes that the pipeline will be part funded by the European Bank of Reconstruction and Development, EBRD president Jean Lemierre said “Kazakhstan is a key country for the EBRD.” The EBRD has so far committed over 700 million Euros to 14 projects in Kazakhstan [152]. EBRD support is crucial since there have been persistent claims that the 2.7 billion dollar Baku-Ceyhan route would be unprofitable [153].

David Woodward, BP associate president in Azerbaijan, says the viability of the project has been strengthened by favourable agreements with Azerbaijan, Georgia and Turkey, through which the pipeline will pass. Turkey’s hardline resistance to an increase in tanker traffic through the environmentally sensitive Bosporus will have been another factor in BP’s support for the pipeline [154].

Nevertheless, Baku-Ceyhan route is not definite and other options exist for the export of Caspian oil to world markets: The Baku-Novorossiysk pipeline has been completed but is out of operation since it passes through troubled Chechnya [155] and there have been additional disputes over Russian customs tarifs [156]. The Baku-Supsa pipeline has been built and is operating at full capacity but as with the Russian route, oil tankers leaving Supsa need to pass through the Bosporous Straits at Istanbul to reach Europe. A 4th option exists via Iran, the American government has been staunchly opposed to dealing with Iran but the companies involved have been more open-minded. It has been speculated that BP is interested in the deal, and since its merger with Amoco, has been pushing for its acceptance in the US.

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Colluding In Human Rights Violations
BP has been accused in the European Parliament of colluding in gross human rights violations by the Colombian army and of wanton environmental destruction in pursuit of profits. Evidence for the accusations comes from a report ordered by Colombia’s President Samper and compiled by a commission including the President’s human rights adviser, Attorney-General and Ombudsman. The unpublished report, completed in July 1995 made specific allegations that BP passed photographs and videos of local protesters to the army, which human rights groups say led to killings, disappearances, torture and beatings [157].

Environmental activist Humberto Castan~eda was jailed after being wrongly identified as a guerilla leader by BP security officer Steve Devine and Colombian soldiers are also alleged to have broken strikes by BP employees [158].

The same government report accused BP of causing serious damage to a protected forest, polluting a river, and damaging bridges as well as the only road available for locals to take their products to market [159].

BP stated that it had no choice but to pay a compulsory ‘war tax’ for army protection to stop left-wing guerillas kidnapping senior staff and attacking oil installations. But BP also made additional voluntary contributions to Colombian military spending which it claimed were to provide soldiers with good food and accommodation [160].

Oil exploration has led to horrific human rights violations against the people of Southern Sudan who, during the civil war which has racked Sudan for the past 40 years have been victims, many claim, of genocide. The China National Petroleum Corporation (CNPC) with which BP works closely, has a 40 percent share in oil production in Southern Sudan and has invested approximately 15 billion US dollars in oil extraction in the country [161].

Since 1998 China has been the largest supplier of weapons to the Sudanese Regime in Khartoum. In August 1999, a pipeline was put into service that runs from the oil fields around Bentiu and Heglig to Port Sudan. The war against the local populations of Southern Sudan has been fought with the goal of depopulating the oil regions. Innumerable people have already been killed and tens of thousands have fled or are fleeing because of the ‘burnt-earth politics’ practiced by the government [162].
Corporate crimes are not confined to BP’s upstream operations In the United States BP work closely with McDonald’s, ever-present symbol of globalisation, and in Britain BP supply fuels to supermarket giants Safeway [163] who have built their superstores on Britain’s green space, encouraged traffic congestion through out-of-town shopping and depressed the prices paid to UK farmers. (see Corporate Watch’s flyer: ‘Supermarkets Destroying Small Farms’)

For a full list of the countries where BP operates see: www.bp.com/in_your_area/a-z_directory.asp

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References
[134] www.bp.com/in_your_area/a-z_directory.asp
[135] BP Financial and operating information, 4th quarter and full year 2000

[136] Reuters

[137] www.tibet.com/NewsRoom/bp-protest-1.htm
[138] New Internationalist, June 2001, p23

[139] www.tibet.com/NewsRoom/bp-protest-1.htm
[140] www.tibet.com/NewsRoom/bp-protest-1.htm
[141] www.tibet.com/NewsRoom/bp-protest-1.htm
[142] Reuters: www.forbes.com/newswire/2001/05/11/rtr259540.html
[143] Reuters-Singapore, Friday, May 11, 2001: www.forbes.com/newswire/2001/06/14/rtr281696.html
[144] www.forbes.com/newswire/2001/06/14/rtr281696.html
[145] New Internationalist June 2001 p22

[146] John Browne, Oxford University Linacre Lectures 2001.

[147] New Internationalist June 2001 p22

[148] US Public Interest Research Group; New Internationalist June 2001 p22

[149] New Internationalist June 2001

[150] www.savethearctic.com/caribou/media/release4_19_01.html
[151] www.neiu.edu/~bjshaman/377/caspian.htm
[152] www.kazakhembus.com/061401.html
[153] www.kazakhembus.com/061401.html
[154] www.bpamoco.org.uk/world/01-05-18ft.htm
[155] www.neiu.edu/~bjshaman/377/caspian.htm
[156] Middle East Wire, Monday, June 4, 2001: www.middleeastwire.com/world/stories/20010604_15_meno.shtml
[157] Article by David Harrison and Melissa Jones in The Observer newspaper, UK, Sunday 20 October 1996.

[158] http://csf.colorado.edu/mail/elan/96/oct96/0059.html
[159] Article by David Harrison and Melissa Jones in The Observer newspaper, UK, Sunday 20 October 1996.

[160] http://csf.colorado.edu/mail/elan/96/oct96/0059.html
[161] www.gfbv.de/gfbv_e/help/sudoil.htm
[162] www.gfbv.de/gfbv_e/help/sudoil.htm
[163] www.bp.com/about_bp/profile/serv_cust.asp

Influence / Lobbying

Like most of its fellow oil companies and a number of industry associations, BP was formerly a member of the Global Climate Coalition (GCC): The coalition has heavily lobbied governments and has mounted persuasive advertising campaigns in the US to turn public opinion against concrete action on greenhouse gas emissions. The so called ‘carbon club’ lead the way in undermining public support for action to curb climate change.

BP, attempting to brand itself as progressive was one of the first to withdraw from GCC. John Browne, Chairman of BP, announced in a speech at Stanford University on May 19, 1997, that:

“The time to consider the policy dimensions of climate change is not when the link between greenhouse gases and climate change is conclusively proven, but when the possibility cannot be discounted and is taken seriously by the society of which we are part. We in BP have reached that point.” [112]

In 1998 Shell followed BP and left the coalition and by early 2000 Texaco and others were joining the movement away from the GCC. While the GCC was an overt lobby against action on climate change, since it was sidelined other lobby groups have come to the fore which are more subtle in their tactics.

BP takes a high profile position within the World Business Council for Sustainable Development (WBCSD) [113]. Speeches by John Browne can be found on the WBCSD website [114]. Members of BP wear their WBCSD hat, for example at the UN’s COP climate summits.

For details of WBCSD’s position on climate change: (www.wbcsd.org/projects/pr_climenergy.htm)

BP also belongs to the US Council for International Business (USCIB) [115] The USCIB to which BP America and over 300 other corporations belong is involved in lobbying the US government. The council was founded in 1945 “to promote an open system of world trade, investment and finance” [116]. Other prominent members of the council include: the American Petroleum Institute, Coca-Cola, Chevron (oil Co.), Dupont (see profile), General Electric, General Motors, Ford, McDonalds, Mobil, Monsanto, Nestle USA, Philip Morris (tobacco), Shell (oil), Texaco (oil) and Unilever. The USCIB is the US affiliate of the International Chamber of Commerce (ICC) and the International Organization of Employers (IOE). Most significantly USCIB chairs the expert-group of the Organisation for Economic Cooperation and Development (OECD)[117].

BP also holds positions within the Centre for European Policy Studies [118] (CEPS) [www.ceps.be] Charles Nicholson, Group Senior Adviser of BP, chaired a special meeting on climate change, hosted by CEPS, on the eve of COP6 bis: the resumed international negotiations on the future of the Kyoto Protocol (Bonn, July 16-27, 2000). The meeting launched a new CEPS working party on “Emissions trading and the new EU climate-change policy” which will be chaired by Charles Nicholson [119].

BP’s chief executive officer (CEO) is entitled to sit at the Business Roundtable [120], an association who examine public issues that affect the economy [121]. The association, which represents over 200 companies, ran a series of newspaper advertisements timed to precede an address by President Clinton to its annual meeting in June 1997. The adverts called for a climate policy “balanced” between economy and environment [122]. The roundtable’s position is explained in Rush to Judgment: A Primer on Global Climate Change, available on the group’s website. [ www.globalchange.org/gccd/gcc-digest/1997/d97sep17.htm]

Global Compact – www.unglobalcompact.org A member of the BP board was among the senior officers of 50 major companies present at the formal launch of the UN Global Compact on July 26, 2000. The compact was first mooted by UN Secretary-General Kofi Annan in a speech to the Davos World Economic Forum in January 1999. The compact between the UN and business aims to uphold values in human rights, labour standards and environmental practice. The Compact is open for adherence by any company, large or small, no formalities are involved but companies are asked to demonstrate their adherence by taking corporate action to support the values of the Compact [123].

The European Roundtable of Industrialists (ERT), which includes BP is a club of 48 captains of industry drawn from the largest European multinationals. With privileged access to EU and national decision-makers the roundtable has been at the forefront in promoting industry self-regulation over government-enforceable mechanisms. ERT Environment Working Group released a report on climate change in mid-October, prior to COP6 in the Hague: Climate Change: How Government and Industry can Work Together [124].

BP also belongs to the International Chamber of Commerce (ICC) [125]: “The only representative body that speaks with authority on behalf of enterprises from all sectors in every part of the world.” [126] [www.iccwbo.org]

ICC promotes free trade and the market economy with the conviction that “trade is a powerful force for peace and prosperity” [127]. ICC aims to be a forum where business can agree voluntary rules to govern world trade in the hope that this image of responsible industry self-regulation will persuade governments not to interfere. It proved so successful in this that within a year of the creation of the United Nations, ICC was granted consultative status at the UN [128].

The Corporate Council on Africa (CCA) to which BP belongs [129] was established in 1992 for governments and business, to strengthen commercial relationships between the US and the African continent. CCA members believe that Africa’s future success depends upon the ability of its entrepreneurs and business people to create and retain wealth through private enterprise [130].

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Influencing research and education

BP has a working relationship with the following universities. These are key institutions, providing graduates to the oil industry, many courses, particularly in the field of geology receive funding from one or more oil companies: Imperial College, Aberdeen University, Cambridge University, Heriot-Watt University, Oxford University, Warwick University, Kingston University, Lincolnshire and Humberside University. BP recruits heavily from these universities. For more details of the oil industries involvement in higher education see Corporate Watch’s briefing ‘Degrees of Capture’ or contact People & Planet about their ‘Slick Protest’ campaign [www.peopleandplanet.org/climatechange]

Links with government

The strength of BP’s links to Britain’s New-Labour government became apparent within weeks of their election in 1997 when they appointed former chair of BP David Simon (Lord Simon of Highbury) to a position in the Department of Trade and Industry (DTI) as Minister for Competitiveness in Europe.

BP is represented on a number of government QUANGOs: the Learning & Skills Council, Competition Commission, DTI Advisory Panel on Photovoltaics, Council for Science & Technology, Commonwealth Development Corporation, Scottish Environment Protection Agency, Advice Committee on Business and Environment, Industrial Development Advice Board, Public Services Productivity Committee, Scottish National Heritage, UK Round Table on Sustainable Development, SW Essex Business & Education Partnership, and the Oil and Pipelines Agency.

PR Companies

BP’s advertising agency is Ogilvy & Mather and their PR consultants Ogilvy PR. In the past BP has also used other companies and a number of the trade associations to which it belongs as environmental or community relations consultants.

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Greenwash

A key plank of BP’s marketing strategy has been to portray itself as a green company. BP has promoted new ‘cleaner’ fuels and publicised its targets for reducing CO2 emissions from its own operations (eg. by reducing gas flaring), not mentioning its ambitious targets for increased production of fossil fuels. In his introduction to BP’s annual report 2000 John Browne prescribes that for the immediate future hydrocarbons will continue to meet the majority of our energy needs.

BP has further greened its image by being seen to talk with Oxfam and Friends of the Earth, and BP also sponsors cultural institutions including parts of the British Museum, Tate Gallery, Edinburgh Festival Fringe, Museum of Mankind and the National Portrait Gallery.

Perhaps ironically considering BP’s role in climate change, BP employees were involved in raising money for the Mozambique flood appeal [131].

The marketing spin pushed by BP Solar is that “BP Solar is a recognized leader in protecting the environment and believes solar power is a key element to reduce the threat of global climate change and improve air quality.” [132] No mention of BP group’s core business here. In the UK, BP has used TV commercials about rural solar-electrification in the developing world. BP Solar has won multi-million dollar contracts for rural electrification in Indonesia and the Philippines and supplied photovoltaics to the ‘green games’ in Sydney, Australia [133].

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References
[112] www.worldwatch.org/chairman/issue/000725.html
[113] www.wbcsd.org/aboutus/members.htm
[114] www.wbcsd.org/newscenter/library.htm
[115] www.transnationale.org/anglais/fiches/109.htm
[116] www.imex.com/uscib/
[117] www.xs4all.nl/~ceo/mai/uscib.html
[118] www.transnationale.org/anglais/fiches/109.htm
[119] www.ceps.be/Pubs/News/
[120] www.transnationale.org/anglais/fiches/109.htm
[121] www.brtable.org/
[122] www.globalchange.org/gccd/gcc-digest/1997/d97sep17.htm
[123] www.iccwbo.org/home/menu_global_compact.asp
[124] www.xs4all.nl/~ceo/greenhouse/european.html
[125] www.iccwbo.org/home/intro_icc/links_to_member_companies.asp
[126] www.iccwbo.org
[127] www.iccwbo.org
[128] www.iccwbo.org/home/intro_icc/introducing_icc.asp
[129] www.transnationale.org/anglais/fiches/109.htm
[130] www.africacncl.org/about/index.htm
[131] BP annual report 2000, p6

[132] www.bpsolar.com
[133] www.bpsolar.com