Kyoto resolve leaves US a leper
By PAUL BROWN
LONDON
Sunday 1 July 2001
The complete isolation of the United States on the issue of climate change moved a step closer on Friday when Europe, Japan and Russia ended a meeting in The Hague saying they wanted to complete the deal to cut greenhouse-gas emissions.
Talks on the Kyoto Protocol are due to resume in Bonn on July 16, with some difficult details still to be hammered out. The purpose of the private Hague meeting was to test whether the rest of the developed world was prepared to go it alone with action on climate change, effectively making the Bush administration an environmental leper.
The only doubt remains Japan, partly because Japan's Prime Minister, Junichiro Koizumi, was meeting George Bush on his first visit to Washington yesterday with the avowed intent of trying to persuade him to come back into the fold. Since the President has repeatedly stated that the US has ditched the Kyoto Protocol with its demand for a 7 per cent reduction in US greenhouse-gas emissions, a change of heart seems unlikely.
Assuming that Mr Koizumi fails, then Japan is likely to honor its promise to ratify because it was negotiated in Kyoto and because of an investment in new technologies to which the protocol will give a boost.
So having established that there is sufficient political will to go ahead without Mr Bush, the tricky issues of detail that caused the original collapse of the talks in The Hague last November still have to be worked out. Japan wants to be able to claim credit against its 6 per cent target of greenhouse-gas emissions for planting trees and helping the developing world to industrialise with clean technologies. It was the US insistence on huge credits for planting trees that scuppered the talks. Such is the anxiety to save Kyoto and alarm at the alternative, no international progress for years on tackling climate change, that optimists believe a deal can be done.
The original Kyoto agreement was to cut the developed world's emissions by 5.5 per cent by 2010 from a 1990 baseline. This is more difficult than it sounds because emissions have risen dramatically since 1990, particularly in the US.
The Prime Minister, Mr John Howard is on the record as saying that there was no point ratifying the Kyoto Protocol without the US.
- GUARDIAN
Why they think they're God at global HQ
By JULIE LEWIS
WASHINGTON
Sunday 1 July 2001
To describe the culture at Exxon Mobil, American activist Peter Altman can think of no better example than the God Box.
That's the name he says the company gives to the room in its global headquarters in Dallas, Texas, where oil men cast their eyes over banks of screens lining the walls beaming in pictures from Exxon Mobil sites around the world. The name says it all, Mr Altman believes. "In their view they are God and they are playing God as they move energy resources around the world."
The mighty US behemoth, parent company of Australia's disgraced Esso, has powerful reasons for feeling omnipotent. The product of the 1999 merger between Exxon and Mobil, it is the reunification of two companies broken apart when trust-busting President Theodore Roosevelt outlawed John D. Rockefeller's oil monopoly in 1911.
Its lobbyists can expect to be greeted warmly in Washington DC, where it spent $US1.3 million ($A2.5 million) in campaign contributions last year, 90 per cent of that on Republicans.
It is the largest publicly listed company in the world, its reach extends to more than 100 countries, and its business in oil, gas, chemicals, coal and plastics earnt it $US17.7 billion last year.
It has also earnt fierce enemies among environmentalists on its home turf, and turned many in the communities that surround its US plants against it.
Juanita Stewart is firmly in the second group. Nothing can convince her that the three Exxon Mobil plants that encircle her neighborhood near Baton Rouge, in Louisiana, are safe. "We had an explosion the day before Thanksgiving last year," she recalls. "They say it wasn't an explosion, it was an air emission." She laughs. "We've got a crack in the ceiling, we've got cracked foundations, a cracked driveway. You mean to tell me that wasn't an explosion?"
In 1989, six employees were injured and two were killed when a vapor cloud ignited and exploded at the Exxon refinery near her home. In 1993 three employees burnt to death in a hydrocarbon fire in the same plant. Earlier this year, a plume of inky black smoke drifted out from another. She is still not sure what that was from, but just thanked the Lord that this time it did not drift over her impoverished, solidly African-American community where too many children suffer from asthma, headaches and ear aches.
Ms Stewart has a rare inflammatory disease that affected her brain as well as other parts of her body when she first came down with it a decade ago, although she cannot prove any link to the chemical and oil facilities nearby. "I lost my memory. I lost my hair. I couldn't talk. I was like a child," she says.
In Texas, where the company has refineries and chemical plants, there are complaints and suspicions as well. A former worker, who refused to be named for fear of retribution, says children in his area are regularly put into hospital with breathing problems.
He is highly critical of health and safety in the plants, alleging the company frequently delays repairs. "They don't want to take the time to shut these units down and make proper repairs because to shut a unit down you're talking about weeks to months. That's money gone, so what they do is they run and run and run and run."
That is a charge that John Miles from the Texas office of the Occupational Safety and Health Administration rejects. "They've been a pretty safe company," he says of Exxon Mobil. "Actually the petrochemical industry in the US is much better in the last few years than they used to be."
A number of explosions in the late 1980s prompted Congress to beef up safety standards in 1991, according to Mr Miles. It required companies to analyse their safety practices more thoroughly. "I think that has helped and they have reduced the number of accidents considerably," he said.
Exxon Mobil had also participated in a voluntary program to lift its safety record 50 per cent above the industry average, and was well above that level, Mr Miles said.
Company spokesman Tom Cirigliano backed up Mr Miles with a slew of statistics on reduced emission levels and safety awards won by the company in the United States, Australia and elsewhere. Safety was the number one priority of the company, he said, although "accidents, unfortunately, in this very dangerous business, are going to happen occasionally".
"That doesn't mean we accept that. Our goal is to reduce it to zero," Mr Cirigliano said."
Still, the company responsible for the Exxon Valdez shipping disaster off the coast of Alaska has an uphill battle convincing the US public of its bona fides. In 1999, a study found it had one of the worst reputations in corporate America, ranking it along with Philip Morris. And for environmental activists such as Mr Altman, that reputation is well deserved. Mr Altman, who works for Campaign Exxon Mobil, and his colleagues at other environment groups accuse the company of using its money and political influence to scuttle the Kyoto treaty and to promote opposition to action on global warming.
President George W. Bush formed a warm relationship with the company while he was governor in Texas, Mr Altman says, pointing to evidence that Exxon Mobil was the architect of Mr Bush's inadequate legislation on ageing refineries in the state. Mr Altman sees the oil giant's hand in the President's determination to open the Arctic Wildlife Sanctuary to exploration and to backpedal on global warming.
On July 11, green groups will hold the Exxon Mobil international day of action, holding 100 protests worldwide to draw attention to the company's policies. Says Ms Stewart: "To me, Exxon don't care about nothing but making money."
Exxon a 'profit-driven' tiger
By ROGER FRANKLIN
Sunday 1 July 2001
When Business Week devoted a recent cover story to Exxon Mobil, Esso's United States parent, it wasn't the staggering size of the world's largest energy outfit that inspired the greatest awe.
True, a $US17.7 billion ($A34.7 billion) profit last year was pretty darn impressive. But, what really captured the magazine's imagination were the same things that have inspired juries to sock the oil company with some of the largest fines ever imposed in the United States: Exxon's immense power and its arrogant willingness to abuse it.
It is an attitude that begins at the top, in the office of chairman Lee Raymond, whose desk is watched over by a wall-sized oil painting of an attacking tiger, the company's snarling symbol. "If he gives his word, which he is reluctant to do, he will keep it," an executive who has negotiated with Mr Raymond told Business Week. "But he is very difficult to deal with."
How difficult?
The lawyers in the Alabama Attorney-General's department found out several years ago, when they informed Exxon that it owed the state $US88 million in unpaid royalties on oil and gas extracted from beneath the Gulf of Mexico.
A pittance in comparison with the oil giant's cash flow, the company nevertheless decided to contest the demand in court. That turned out to be a bad move because the lawyers for the state gained access to mountains of confidential - and embarrassing - corporate documents.
What they found - in the words of Southern Methodist University Business School's John Slocum, who recently compiled a detailed study of Exxon's corporate culture - was a management philosophy that respects nothing but the bottom line.
"It is the ultimate cold, calculating, analytical and bureaucratic organisation," Professor Slocum told The Sunday Age last week.
"In Alabama, they did what they always do: conducted a cost-benefit analysis of what it would cost to honor the contract ... Obviously, ignoring it made greater financial sense at the time, so it appears they decided to withhold payments."
As documents submitted during the trial made clear, Exxon did indeed weigh right and wrong - and concluded that breaking the law was more profitable.
Even its chief in-house lawyer recommended withholding the royalties because, "our exposure is 12 per cent interest on underpayments. Plus the cost of litigation". In other words, the money to be made by breaking its word outweighed the potential fines.
What Exxon did not figure on was the sense of outrage that inflamed 12 Alabama jurors, who decided that such a flagrant disdain for honesty deserved special punishment.
In January, the panel brought down a $US3.5 billion judgment against the company, with jury foreman Shae Fillingim later explaining that Exxon needed to be taught that the law applied to everyone, not just to the "little people".
A similar case unfolded last year in Miami, where a group of service station owners sued Exxon for price gouging. Once again, at least according to lawyer Eugene Stearns, who won a $US1 billion judgment in the case, the company chose to do wrong in pursuit of profit.
They "don't have much respect for the civil justice system. They fight over everything. They don't concede the obvious," said Stearns.
If that observation chills Melbourne lawyers preparing to sue Esso for the financial losses that followed the Longford explosion, the legal aftermath of the infamous Exxon Valdez oil spill in Alaska may well give them even more reason to expect a drawn-out legal battle.
Let this excerpt from an August, 1998, editorial in the Anchorage Daily News explain what happened in the wake of a 1994 jury decision that hit Exxon with $US5 billion in punitive damages:
"Apparently delay pays," the paper wrote. "Exxon is earning $US90,000 an hour, about $US2 million a day ... As it stands now, if the appeal lingers a couple more years, Exxon will have earned enough interest alone to pay the $US5 billion, plus the accrued interest."