The Multinational Monitor

MAY 1989 - VOLUME 10 - NUMBER 5

T H E   F R O N T

Making Exxon Pay

Six environmental and consumer groups have launched a boycott to force Exxon, the country's largest energy company, to take responsibility for the accident which dumped 11 million gallons of oil into Prince William Sound. To date, 10,000 Exxon credit card holders have already returned their cards to Exxon, indicating widespread support for the boycott.

According to leaders of the boycott, Exxon prepared for this eventuality only by protecting its own assets, not by implementing preventative measures to protect the Alaskan people and their environment from the oil and consumers throughout the country from the financial costs of the spill. Environmentalists who work in Alaska claim that Exxon has used its substantial political and financial clout to lobby against the environmental protection legislation that might have prevented the disaster. Exxon has also strongly supported tax laws which will allow it to deduct the costs of the cleanup.

The boycotters hope that by shunning Exxon and all products, consumers can make Exxon assume full responsibility for the spill and its aftermath. The groups have formulated five demands which Exxon must meet before they will rescind the boycott. Exxon must:

  • roll back the recent gasoline price hikes.
  • pay for all cleanup costs and damages.
  • establish a $1 billion annual Environmental Trust Fund to promote the preservation of endangered areas in Alaska.
  • pay for safe oil tankers and oil-spill contingency programs.
  • conduct no drilling in the Arctic National Wildlife Refuge.
With the gasoline price hikes and tax deductions, Exxon could even profit from the spill. According to consumer advocate Ralph Nader, "The company's expenses for the spill are either insurable or tax-deductible and its gasoline price increases more than make up for its net oil spill expenses this year."

Exxon denies that it will make money off of the disaster. But it clearly plans to take full advantage of the tax credit loophole, passing the cost of the cleanup on to U.S. taxpayers and consumers. "If it gets to the consumer, that's just where it gets," said Don Cornett, the Alaska coordinator for the Exxon Corporation.

Though the company apologized and promised to pay for the cost of the cleanup, Exxon denied responsibility for the destruction that the oil has caused. An official company statement blames the accident on the captain's failure to follow Exxon's rules and regulations and blames the delays in the cleanup on regulatory red tape. "Accidents can happen to anyone," reads the statement. But the boycott organizers think otherwise.

"It's time [that Exxon] be held accountable to a higher standard of corporate behavior," said Edwin S. Rothschild of Citizen Action. Other critics also think that Exxon must do more. Even Coast Guard Commandant Paul Yost has said that Exxon's cleanup plans are "very thin" and lack "backup or substantiation." Congressional representatives backing an oil spill tax bill in the House of Representatives point out that the ineffective plan should be no surprise because Exxon can write off the cleanup, legal, public relations and restitution expenses, whether the oil is actually cleaned up or not. "Since those tax deductions don't have anything to do with actually completing the oil spill cleanup, it's no wonder Exxon has spent so much money to accomplish so little," write the cosponsors of the bill. Part of Exxon's "cleanup costs" has been aimed more at cleaning up their image than at restoring Alaska to an environmentally sound state. The oil company launched a public relations media campaign, purchasing a series of full-page advertisements in major newspapers.

Nader says that the boycott could substantially reduce Exxon's profits. Exxon made more than $5 billion in profits last year, so the loss of even a small percentage of its business amounts to a large sum of money. Exxon products and subsidiaries include several Regal convenience/gas stations in the San Francisco area, Wickland Oil Co., Vapofilm polyethylene film, Aquaglide lubricant, Uniflo motor oil, Flit insecticides, Pate gas and oil, Permaguard antifreeze, Alert gas, Oilex motor oil, Enco petroleum products, Imperial gas, Perbunan rubber and Varsol solvent.

Exxon is using advertisements in major newspapers to try to convince consumers that a boycott will hurt independent service station operators and not the energy company itself. But Rothschild believes that Exxon is not really concerned about the dealers, and that Exxon's efforts indicate that the boycott is working, Exxon gasoline sales are falling and the dealers are complaining to the company. If Exxon was really concerned about the dealers, he says, "it could easily take steps to protect them." Stuart Stringer, who manages an Exxon station in Woodbridge, Va. agrees: "I feel like Exxon could swallow a little bit of the profit on gas to help us out," he told USA Today. Swallowing profits is not, however, a part of Exxon's Alaskan strategy.

Labor Wins

It's not often that worker rights intrude on international commerce despite a number of laws intended to ensure that countries seeking export markets maintain at least minimal standards of respect for labor. In a rare victory, the U.S. Trade Representative (USTR) recently denied exporters from the Central African Republic duty-free entry of goods under the U.S. General System of Preferences (GSP) because of the government's failure to meet international labor standards. USTR Carla Hills announced the suspension at the end of April, making the Central African Republic (C.A.R.) the first African country to lose GSP benefits because of labor rights violations. It joins four other developing countries--Chile, Paraguay, Rumania and Nicaragua-- which have been denied the trade benefits offered under GSP. Liberia was placed under review for a year, following complaints about worker rights there. C.A.R. exports to the United States eligible for duty-free entry totalled about $72,000 last year. The economic counsellor at the C.A.R. embassy in Washington, said "We have not been officially notified," and therefore would not comment on the USTR's decision.

Although the C.A.R. has never been noted for worker protection or respect, it is not likely that the USTR would have acted without sustained pressure from the U.S. American Federation of Labor-Congress of Industrial Organizations (AFL-CIO). The USTR warned the country in 1987 that it was in danger of losing its trade benefits because of a petition filed by the AFL-CIO in June of that year. The main charges from the U.S. Iabor organization concerned the C.A.R.'s denial of the freedom of association and of the right to strike and bargain collectively, and charges that the government "makes no effort to enforce its legal prohibition on the employment of children under the age of 14." The AFL-CIO also cited charges brought before the International Labor Organization regarding the imposition of compulsory labor for political prisoners.

Since the dissolution of the Union Generale des Travailleurs du Centrafrique (UGTC), "no legitimate trade union movement has existed in the C.A.R.," according to the USTR brief. The remaining trade union organization, the Confederation Nationale des Travailleurs du Centrafrique (CNTC), was "more accommodating to government pressure" than the UGTC, the AFL complained. In addition, the AFL-CIO claimed that "Management pays off labor inspectors to ignore flagrant violations of labor laws."

A spokesperson for the AFL-CIO, Caroline Lauer, said that the C.A.R. is one of many African nations in violation of GSP laws on worker rights. But it takes a lot of work and time to convince the USTR to act according to the law, she explained.

- Samantha Sparks

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