BP
BP p.l.c., is a global oil, gas and chemicals company headquartered in Britain. In 2003 the company had revenues of $233 billion, with oil and gas exploration projects in 26 countries, production plants in 23 countries and owns 27,800 petrol stations. The company also owns 23 refineries and 32 chemical manufacturing plants around the world. [1]
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History
BP is, according to Hoovers business information, "the world's third largest integrated oil concern, behind Exxon Mobil and Royal Dutch Shell. The company, which was formed in 1998 from the merger of British Petroleum and Amoco, grew by buying Atlantic Richfield Company. ... BP is the largest oil and gas producer in the US ... "[2]
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BP and the apartheid regime
See BP and the apartheid regime case study.
BP has also been criticised over the last eight years for its role in Colombia and its funding and close working relationship with the military. [3] [4]
Writing in PR Watch, British journalist Andy Rowell reported that in 1998, Oxfam held an Interagency "Seminar on Corporate Campaigning" to evaluate its ongoing dialogue with BP/Amoco (as it was then known). "Eighteen months after beginning the dialogue, Oxfam leaders realized that they really did not know what they were doing and wondered if they were being taken for a ride by the oil company. The Oxfam Seminar was held to see if a consensus existed between NGOs as to whether they should sit down and dialogue with corporations," he wrote. [5]
Rowell recounted that after he described 'dialogue' as the new tactic coroporations were using to counter activist groups. It was an argument, he wrote, that was challenged by Sir Geoffrey Chandler, an ex-senior Shell executive and then head of the Amnesty Business Unit. In response Rowell asked for a show of hands of those in the audience who had heard of Burson-Marsteller. "Fewer than half the hands went up. Most of the people in the room, which included more than 100 of the UK's leading environmental, development and human rights activists, had never heard of BP/Amoco's PR firm, and of course they had no idea what it was up to," he wrote.
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BP's rebranding as "green"
BP ad in Home Powermagazine, Issue 103, Oct - Nov 2004
Browne, who had managed the company's Alaska division for many years, became group chief executive in 1995. The following year, to the surprise of many environmentalists and oil industry analysts, BP resigned from the Global Climate Coalition, which ridiculed the science pointing to human induced climate change and sought to undermine the Kyoto treaty negotiations.
"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," Browne said. Subsequently the company moved to adopt internal greenhouse gas emission reduction targets.
In late July 2000 BP launched a massive $200 million public relations and advertising campaign, introducing the company with a new slogan - 'Beyond Petroleum' - and a green and yellow sun as its logo. The campaign was handled by Ogilvy & Mather Worldwide, one of the major advertising companies that also owns a slew of PR companies. [6] Around the world the company took out full-page colour advertisements in major magazines.
Ogilvy and British Petroleum later won the PRWeek 2001 "Campaign of the Year" award in the 'product brand development'. [7]
One of the advertisements run in the International Herald Tribune in November 2000 stated "Beyond... - means being a global leader in producing the cleanest burning fossil fuel. Natural Gas; means being the first company to introduce cleaner burning fuels to many of the world's most polluted cities; means being the largest producer of solar energy in the world; means starting a journey that will take a world's expectations of energy beyond what anyone can see today." [8]
In a column for CorpWatch, researcher Kenny Bruno dissected the advertisement. "BP's re-branding as the "Beyond Petroleum" company is perhaps the ultimate co-optation of environmentalists' language and message. Even apart from the twisting of language, BP's suggestion that producing more natural gas is somehow akin to global leadership is preposterous. Make that Beyond Preposterous," he wrote.
While noting that BP was indeed the largest producer of solar energy, Bruno pointed out that was achieved by spending $45 million in 1999 to buy Solarex which was dwarfed by the $26.5 billion it spent to buy ARCO to expand its oil portfolio. As for the claim that BP was starting a journey that would reshape public energy expectations, Bruno was scathing: "Pretentious stuff for a company serving mainly oil and gas, with just a sliver of solar on the side. Make that Beyond Pretentious." [9]
The re-branding - undertaken in the wake of major controversies in Europe over Shell's role in Nigeria and its ill-fated attempt to dump the disused Brent Spar oil platform in the ocean - was aimed at differentiating BP from its rivals. Associate creative director with Ogilvy on the campaign, Michael Kaye, told the New York Times the campaign was aiming to communicate "BP can be a friend -- listening to consumers, speaking in a human voice." [10]
One of BP's PR advisers was Peter Sandman. [11] While its is unknown whether he specifically advised BP on their rebranding project, non-the-less described it at an Australian mining industry conference as an example of a company adopting the persona of being a "reformed sinner".
Sandman told his audience that this "works quite well if you can sell it. . . . 'Reformed sinner,' by the way, is what John Brown of BP has successfully done for his organization. It is arguably what Shell has done with respect to Brent Spar. Those are two huge oil companies that have done a very good job of saying to themselves, 'Everyone thinks we are bad guys. . . . We can't just start out announcing we are good guys, so what we have to announce is we have finally realised we were bad guys and we are going to be better.' . . . It makes it much easier for critics and the public to buy into the image of the industry as good guys after you have spent awhile in purgatory." [12]
With raised expectations about corporate behaviour - and especially oil companies - BP's move not only sought to distance itself from its more notorious European counterparts but the brasher American oil companies - such as Exxon - which was fiercely opposing moves to curb greenhouse gas emissions. Group vice president for marketing for BP, Anna Catalano, told the New York Times that BP is "the company that goes beyond what you expect from an oil company -- frank, open, honest and unapologetic."
BP also sought to cultivate 'moderate' environmental groups in a series of 'partnerships' with groups like the National Wildlife Federation. [13] (See the BP and the National Wildlife Federation case study).
However, the trap for companies such as BP is that big-spending promotional campaigns often raise expectations that the organisation is incapable of meeting. Where corporate PR is often adept at explaining away infringements or accidents to human error or failed equipment, considered corporate policy which is at odds with public expectations is harder to explain away.
BP's corporate re-branding was subject to sceptical review amongst activists and some maintream media. In Fortune magazine, Cait Murphy, cuttingly wrote of BP's billboards touting its involvement in renewable energy "here's a novel advertising strategy--pitch your least important product and ignore your most important one ... If the world's second-largest oil company is beyond petroleum, Fortune is beyond words," she wrote. [14]
BP's regional president, Bob Malone, told Murphy "the oil business has a negative reputation ... We are trying to say that there are different kinds of oil companies."
"As for being 'beyond petroleum'... Malone concedes that BP is decades away. Somehow that didn't make the billboard," she wrote.
Pressure groups accuse BP of splashing out more on advertising its environmental friendliness than on environmental actions. [15]
BP launches new greenwashing initiative (see The Times, 24 December, 2004), while simultaneously calling for a big increase in CO2 levels (500ppm-550ppm):
- "Based on current scientific opinion, we believe that it’s realistic to promote actions designed to stabilize carbon dioxide concentrations at around 500-550 ppm..." BP Online
In March 2007, the Australian reported that "Internal documents have revealed that BP successfully lobbied against tighter environmental controls by regulators in Texas, saving $US150 million in monitoring and equipment upgrades before the 2005 fatal refinery explosion." [16]
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The green gloss fades
While BP's rebranding program may have reassured some of its critics, others remained unpersuaded. At its annual general meeting in April 2001, BP was challenged about its interests in projects spanning from Tibet, the Sudan and the Arctic National Wildlife Refuge.
A resolution urging BP to disinvest from its shareholding in Beijing-controlled PetroChina - which plans an oil pipeline through Tibet - was opposed by the company, gaining support from only 5% of shares voted at the meeting. Speaking in support of the resolution, Stephen Kretzmann, from the International Campaign for Tibet, suggested that BP's slogan "Beyond Petroleum" should be changed to "Beijing's Partners" or "Backing Persecution". According to a report in The Guardian, he accused BP of "utilising every arcane and legalistic tool to stifle debate on the matter". BP's chairman, Peter Sutherland, dismissed the concerns. "Disinvesting from PetroChina means, in reality, departing from China, which would be a mistake, and would be wrong," he told shareholders. [17]
Another resolution proposing that the company do more about climate change was also opposed by the board and defeated, gaining support from 7.5% of proxy voters. Sutherland told the meeting "there have been calls for BP to phase out the sale of fossil fuels. We cannot accept this, and there's no point pretending we can."
While as part of its rebranding program the company has touted its 'ethics' policies, one shareholder activist attending the meeting challenged the directors to nominate a country which the company had decided to avoid because of human rights abuses. "After a long pause its chief executive, Sir John Browne, said it would be 'uncivil and inappropriate' to mention any no-go nations," The Guardian reported.
BP's business ethics were also challenged when in June 2001 the London newspaper, The Sunday Times, revealed that both BP and Shell acknowledged that they hired a private intelligence company with close ties to the British spy agency, MI6, to collect information on campaigns by Greenpeace and the Body Shop.
The newspaper revealed that German-born Manfred Schlickenrieder was hired by Hakluyt, a private intelligence agency, to report on Greenpeace campaigns against oil developments in the north Atlantic. Schlickenrieder posed as a film maker working on films sympathetic to activist groups.
According to The Sunday Times, the former deputy chairman of BP, Sir Peter Cazalet, helped to establish Hakluyt and former chairman of Shell, Sir Peter Holmes, is president of its foundation. In May 1997 the head of Hakluyt, Mike Reynolds, asked Schlickenrieder whether Greenpeace was planning to shield its financial assets from court orders in the event of it being sued by an oil company. Two months later, Greenpeace occupied the BP oil rig, the Stena Dee, in the Atlantic. BP sued Greenpeace for £1.4 million in damages and succeeded in gaining an injunction freezing the group's bank accounts while the occupation lasted. After police evicted Greenpeace campaigners from the rig BP dropped its legal action and the freeze on the bank accounts was lifted. [18]
"BP countered the campaign in an unusually fast and smart way," Greenpeace Germany spokesperson Stefan Krug told the German daily Die Tageszeitung. As Eveline Lubbers noted in PR Watch, "since BP knew what was coming in advance, it was never taken by surprise." [19]
In other areas though, BP has made some concessions to public pressure. In early 2002 the company Chairman, Lord Browne, announced that it will no longer make donations to political parties anywhere in the world. In a speech to the Royal Institute of International Affairs, Browne, said "we have to remember that however large our turnover might be, we still have no democratic legitimacy anywhere in the world … We've decided, as a global policy, that from now on we will make no political contributions from corporate funds anywhere in the world". [20]
However, BP will continue to participate in industry lobbying campaigns and the funding of think-tanks. "We will 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," he said. In response to a question, Browne said that over the long term donations to political parties were not effective.
While BP had staked out a public position of being a supporter of the Kyoto protocol to control greenhouse gas emissions - unlike the major American oil companies - Greenpeace New Zealand discovered in May 2002 that it continued to participate in a New Zealand coalition lobbying the government not to ratify the convention.
Greenpeace wrote to both BP and its counterpart Shell - which had also stated it supported Kyoto - demanding it withdraw from the New Zealand Climate Change Pan Industry Group (CCPIG). "BP and Shell's hypocrisy is difficult to understand. Both these companies need to set the record straight in New Zealand. They need to withdraw from the Pan Industry Group and clearly state their positions on climate change," wrote Greenpeace campaigner, Robbie Kelman.
The following day BP claimed that they had not participated in the coalition. It was a claim Greenpeace rejected pointing to a February 2002 report produced on behalf of the Climate Change Pan Industry Group (CCPIG) which listed as one of its members the Greenhouse Policy Coalition (GPC) of which BP is a member. The Chair of the GPC itself had also written an opinion column for a New Zealand newspaper titled 'Nothing to gain from Kyoto Protocol"
"BP cannot remain silent any longer. The company must make a clear public statement on its stance on climate change, renounce the anti- Kyoto CCPIG and guarantee the Greenhouse Policy Coalition (GPC) is not associated with the CCPIG, or it should remove itself from the GPC," Kelman said.
BP is also a member of trade associations that have been pressing to weaken corporate governance standards. In 2002, the Organisation for International Investment (OFFI) - of which BP is a member - mounted a lobbying campaign to gain exemptions from US corporate law reforms initiated after the Enron and WorldCom collapses. In a letter to the US Securities and Exchange Commission, OFFI complained that the Sarbanes-Oxley Act reforms represented "an unfair, unnecessary and highly intrusive interference with the home country standards applicable to foreign private issuers".[21].
The letter from the OFFI objected to the provisions banning companies making personal loans to executives and requiring executives to repay profits if the accounts were incorrect.
By 2003, BP's ever-expanding list of environmental and occupational health and safety problems had depleted what credibility it had gained with advertising glitz. One of the largest ethical investment funds, Henderson Global Investors, announced it was bailing out of holding shares in the company. "We have been talking to BP about this for seven or eight months but we have come to the conclusion that we are unable to invest in the company for these ethical funds," Rob Lake, head of corporate governance told The Independent.[22]
The disparity between the companies reassuring rhetoric and reality has come to light elsewhere too. In March 2003, a Californian air quality regulatory agency sued BP for $319 million over what it alleged were thousands of violations of emissions standards at its Carson oil refinery in the port of Los Angeles. [23]
The alleged violations came to light when the South Coast Air Quality Management District became suspicious after Atlantic Richfield (ARCO) - which became a BP subsidiary in 2000 - did not report any violations and, according to a Reuters report, "virtually no repairs to the tanks between 1999 and 2002". (Under a self-regulatory system ARCO was requiring to inspect its own operations and report any violations to the regulatory authorities).
According to the lawsuit, attempts by public officials to investigate the Carson plant were blocked by ARCO until a judge ordered the company give them immediate access to the tanks. The company claimed that the inspectors were barred because they were not trained to use the breathing equipment required by the company's safety protocols and they were unwilling to undergo the four-hour training course.
At the 2003 annual general meeting, BP faced criticism over the role in Iraq. While the "Carnival Against Oil Wars" protested against the war in Iraq outside the meeting, Sutherland was inside seeking to reassure shareholders. "The oil industry has considerable expertise, which we expect to take part in the rebuilding of Iraq," Sutherland said. According to Reuters he also stressed that BP would only get involved in Iraq if there was a legitimate government chosen by the Iraqi people. [24]
In June 2005, The Independent reported that BP "has been privately lobbying in Washington to block legislation to introduce a mandatory curb on greenhouse gases in the U.S." BP had come out in opposition to two separate proposals to include mandatory emissions cuts in the national energy bill - one by Senator Jeff Bingaman on carbon dioxide limits and one by Senators John McCain and Joe Lieberman on greenhouse gas cuts. "Instead, BP said it supported a third alternative from Chuck Hagel, a Nebraska Republican, which requires companies only to try to cut emissions with the promise of tax breaks." [25]
In response, Environmental Defense's Peter Goldmark said BP's lobbying "is completely at odds with its record and its public statements." Clean Air Watch called BP guilty of "greenwashing on epic proportions." [26]
In August 2007, Advertising Age reported that BP had received "a permit from the state of Indiana to dump more toxic discharges from its Whiting, Ind., refinery into Lake Michigan." The permit, "which allows BP to dump 54% more ammonia and 35% more suspended solids" in the Great Lake, has "enraged" Chicago officials and "raised the specter of consumer boycotts." Chicago's chief environmental officer remarked, "We'd like to have [BP] live up to their advertising." [27]
AdAge called BP's move "the cardinal sin of touting an environmentally conscious image in marketing -- the central focus of BP's advertising for the past several years -- and failing to live up to the message." A company spokesman said BP had "started advertising in regional newspapers ... to clear up misconceptions about the issue." [28]
BP later pledged it wouldn't increase its dumping into Lake Michigan. The pressure on the company was such that "Bob Malone, chairman of BP America, flew to Chicago to deliver the news personally to Mayor Richard Daley, one of several politicians who said the company's initial plans were unacceptable to the public," reported the Chicago Tribune. [29]
In late 2007, BP decided "to invest in the world's dirtiest oil production in Canada's tar sands," reported The Guardian. BP's investment in "the Alberta tar sands, which are said to be five times more energy-intensive to extract compared to traditional oil," prompted Greenpeace Canada to accuse the company of "the biggest environmental crime in history." [1]
BP's former chief executive, John Browne "had said BP would not follow Shell into tar sands as he established an alternative energy division and pledged to take the group 'beyond petroleum.' The new boss, Tony Hayward, has pointed the corporate supertanker in a new direction although his public relations minders insist BP remains committed to exploring the potential of renewables," concluded The Guardian. [1]
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BP's campaign to exploit protected areas
While BP was been spending big on its "Beyond Petroleum" advertising campaign to position itself as an environmentally responsible company, it also publicly backed moves by the Bush government to open up the Arctic National Wildlife Refuge in Alaska to oil drilling. BP, also continues to explore for oil in environmentally sensitive areas such as the Atlantic Frontier, the foothills of the Andes and Alaska. [30]
It has also been attempting to woo environmental groups and the International Union for the Conservation of Nature into relaxing guidelines for the World's protected areas and World Heritage Area that sattes that mining and oil developments are incompatible in four of the five classes of protected areas. See BP's campaign to exploit protected areas case study.
In 1996 BP was accused of human rights violations in Colombia. Its Casanare oil field has oil reserves valued at approximately $US 40 billion. The Colombian government has a poor human rights record, and both the police and army are held responsible for serious abuses of human rights including extrajudicial killings, forced disappearances, torture and beatings. [31]
In January 2003, U.S. law courts ordered BP to allow federal inspectors unrestricted access to its Alaskan operations to verify compliance with environmental, health and safety laws. This was a modification of a five-year probation imposed on BP in 2000 after the company admitted it had illegally dumped hazardous waste from the Endicott Island oil field between 1993 and 1995. [32]
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BP and West Papua
In recent years BP has been developing its massive Tangguh gas project at Bintuni Bay in West Papua. BP has been at pains to proclaim its intentions to avoid the mistakes of other major resource projects in West Papua - most notably the Freeport mine - by developing community support for the project.
While spending money on community development projects and extensive consultation programmes is nothing new, BP's most notable difference is its stated intention of keeping the notorious Indonesian military at arms length rather than on the payroll, as occurs at Freeport.
