world-petroleum.org

UNEP presentation - report

Oilpatch gets warning

Industry leader refuses to apologize

Geoffrey Scotton, Calgary Herald and Bob Weber, Canadian Press

Mikael Kjellstrom, Calgary Herald

A senior United Nations environmental official called on the world's energy industry Wednesday to accelerate and broaden efforts to deal with environmental and social problems or it will face increasing unrest. While corporate heads express noble sentiments at conferences, their companies often work behind the scenes for opposite ends, said Jacqueline Aloisi de Larderel, head of the United Nations Environment Program. "Very often, I hear CEOs saying something, and I am seeing lobbying in those meetings that is not consistent with the CEOs' language." De Larderel said the oil industry must learn to listen to people, such as those who have been protesting outside the congress this week. "The demonstrations in Seattle are clear warnings," de Larderel said.

Her remarks were in stark contrast to fellow panelist Dick Cheney, former secretary of defence under U.S. president George Bush and now CEO of Houston-based oil services company Haliburton Co. Cheney acknowledged the importance of the so-called "triple bottom line" of profitability and environmental and social sustainability. But he said the industry has come a long way in answering those concerns. "I'm not here to apologize for the industry or make excuses for it," he said. The industry's challenge is to educate the public and media on steps it is already taking, he said. Cheney said oil and natural gas companies, such as his oilfield services firm, have been spending billions of dollars to improve their environmental performance, often without fair recognition. "Our industry is saddled with an image problem, as a polluting smokestack industry," said Cheney. "People need to realize that the energy industry often represents the largest foreign investment in many parts of the world and we are having a positive impact in many developing countries," said Cheney. "In terms of community service commitments and building social infrastructure, how many other industries have done as much as the oil industry in developing countries?" "How many investment banks do you know that have built schools in developing countries where they've made millions of dollars in fees from privatizations. How many airlines have built housing? How many manufacturers have built hospitals? The oil industry is unlike any other in this regard." Cheney said trade itself is an important means of improving the lives of people in developing nations. "Trade and the exchange of ideas are important ways of opening up these societies," he said.

But de Larderel -- while acknowledging some companies and executives have shown leadership, and noting her very presence at the WPC is a sign that environmental and social concerns are garnering attention and action -- said much more must be done. "It's time to accelerate action and time for all petroleum companies to be involved. We have heard a number of enlightened leaders, but I know not everyone is on the same wavelength," said de Larderel, who also argued there are sometimes differences between what corporate leaders say and how their firms perform. Olav Fjell, the president and chief executive of Norway's state oil company, Statoil, opened the WPC session Wednesday. He argued that ethical conduct in the area of environmental and social performance is increasingly becoming a prerequisite for successful corporate operations. "Companies act responsibly in large measure because they can do well by doing good," said Fjell. "From this perspective corporate social responsibility also become a strategy for gaining competitive advantage. "Companies that act in accordance with principles of good corporate citizen ship may reap a reputational dividend," Fjell added.

He also argued the era of firms being able to present an environmentally and socially responsible image without actual substance is over. "Talk is no longer cheap. Words have consequences. Corporations must walk the talk, otherwise they will have to pay." Global media will ensure that companies are held to account, he said. "The time when it was possible to say something and do different are gone," he said. "When it comes to the hard questions of whether to spend more money, I think it's very important to have a press that follows very, very closely what we are doing." Depending on media and public opinion may not be enough, said de Larderel. She said more companies should participate in a UN report that tracks corporate performance on dozens of social and environmental issues. "Then it becomes a question not of 'trust us,' but 'track us.' " Outside the conference, protester Tooker Gomberg of the End of Oil Action Committee scoffed at the notion of any triple bottom line for the oil industry. "These are the largest corporations on earth and they're clearly causing extraordinary ecological damage and human rights abuses." Nor did he feel as if congress delegates had made much attempt to listen to what the protesters had to say. "Ideally, in a democracy there is plenty of room for protest and debate. That certainly was not the case here."