Oil and globalisation

Down to Earth No. 48 February 2001

Today's world is governed by large transnational companies, which have entered into all areas of production and which all depend on fossil fuels, says Oilwatch, the international NGO network on oil.

In a statement prepared for a 'Social Summit' in Porto Alegre, Brazil, the group describes globalisation as "a failed project, sustained by the extraction of fossil fuels, which threatens the life and future of the planet." Oil, controlled by the transnationals, is used for transportation, industry and mechanised agriculture - thus underpinning a pattern of globalisation which favours the northern industrialised countries over the Third World. Oil is also massively subsidised, because the ecological and social costs of its extraction are not included in the price. This means that it is impossible for other sources of clean, decentralised and low impact energy to compete.

Current strategies among the oil and gas transnationals include merging into mega-companies (eg Exxon/Mobil, BP/Amoco/Arco and Chevron/Texaco), increasing extraction and consumption of fossil fuels in the southern hemisphere, accessing new areas, including deep waters (see Unocal's Makassar Straits development), and constructing transnational gas pipelines (see the recently opened Natuna-Singapore pipeline, and plans for more). Civil society seeking alternatives to continued corporate globalisation, needs to find ways to cut off the energy that sustains it, says Oilwatch. A moratorium on oil exploration, boycotting companies and civil disobedience are some of the tools suggested. Civil society can also work towards building societies not based on oil and support the resistance processes of "Oil Free Societies" - many of them indigenous peoples - which exist in all parts of the world.

Oilwatch proposes that civil society resists the strategies of co-option that transnationals use to gain more control over lives and natural resources and points out the dangers of companies' community relations programmes: "Participation, for example, replaces opposition; consultation on projects becomes a form of endorsement; dialogue becomes agreement." Finally, Oilwatch proposes that civil society works to highlight the 'ecological debt' - the damage caused from exploration to consumption - which is generated by the oil and gas industries.

The Social Summit in Brazil, coincided with January's World Economic Forum in Davos, Switzerland, which was attended by oil and other transnational company representatives.

Oilwatch's "Position Paper on globalisation, transnational corporations and oil, is available from oilwatch@uio.satnet.net 
Oilwatch's website is at www.oilwatch.org.ec


Corporate human rights move

Adopting positions on 'corporate responsibility' has become an important tool for transnationals to repair the damage done to their reputations when the ecological and social impacts of their activities are exposed. In December, seven major US and UK companies announced their support for a government-led initiative aimed at curbing human rights abuses at facilities in developing countries. The seven include three US oil companies (all active in controversial projects in Indonesia): Chevron, Texaco and Conoco, as well as BP Amoco and Shell of the UK, and mining groups Rio Tinto and Freeport MacMoran. Not included in the list were Exxon/Mobil (see operations in Aceh) and Premier Oil, active in Indonesia and Burma. Freeport's involvement in Indonesian military abuses at its West Papua mine (also owned by Rio Tinto) has long been protested by local communities and NGOs. Rio Tinto's history of human rights abuses at its Kelian gold mine in East Kalimantan were exposed in an Australian newspaper last year (see DTE 47). As long as bitter disputes with these companies continue, it will be hard to convince affected communities that corporate commitments on curbing abuses are genuine.

(Source: Financial Times 21/Dec/00, Petromindo 29/Jan/00)