Corporate Profile

BP: A Legacy of Aparthied, Pollution and Exploitation

SYMBOLIZING THE INCREASING INTEGRATION of the world economy, the first piece of the empire assembled by the U.S. oil baron John D. Rockefeller is now owned by a British company. But changing national ownership has not affected the social orientation of the former Standard Oil of Ohio (Sohio), now owned by the oil giant British Petroleum (BP). BP has remained true to Rockefeller's ruthless legacy, placing its pursuit of profits above any human or environmental concerns.

Sohio, however, is just one important part of a massive multinational corporation whose early growth was closely tied to British imperialistic expansion. BP benefited enormously from Britain's control of Iran's (then Persia's) oil supply in the beginning of the twentieth century. Through its exploitation of Iranian resources, the company eventually developed into a powerful presence among the Seven Sisters oil companies. Today, BP is the largest company in the United Kingdom, the second-largest in Europe and the third- largest oil company in the world. BP's London division is a $59 billion entity. Internationally, BP has sought and gained a reputation as an aggressive force in 70 countries, spending $20 billion in the 1980s to swallow its competitor in the North Sea, Britoil, along with Sohio in the United States.

In recent years BP has intensified its oil exploration efforts in various parts of the world while actively buying and transfering assets. In 1989, the company sold its coal mining and minerals operations in Australia, Europe, the United States and South Africa to Rio Tinto Zinc as part of its strategy to concentrate on oil, gas and chemicals.

Oil exploration and production account for 20 percent of BP's revenues. BP's primary exploration projects are in Alaska and the North Sea, with an increasing focus beginning in the late 1980s on China, Russia, Vietnam and West Africa. In 1991 the company produced more than 400 million barrels of crude oil, condensate and natural gas liquids and had proven reserves of 4.6 billion barrels of oil and 11 trillion cubic feet of natural gas.

 BP is a major producer of chemicals, which account for 8 percent of its total revenues. The company's products include petrochemicals and polymers, especially ethylene and derivatives, used in packaging, housewares, construction materials and cables; acetyls, used in paints, textiles, solvents and drugs; nitriles, used in synthetic rubber and plastic; and specialty products for aerospace, automotive, electronics and plastics industries. Another 8 percent of revenues come from production of Purina brand animal feed for the livestock industry, including products for fish farming and poultry breeding.

 Refining and marketing account for 64 percent of BP's revenues. BP operates five refineries in the United States, five in Europe, two in Australia and one in Singapore which altogether processed a total of 1.8 million barrels of crude oil per day during 1991. The company co-runs an additional refinery with Royal Dutch Shell in South Africa. BP sells refined oil products throughout the world, mostly through its 7,400 U.S. and 7,700 European service stations.

BP's oil refining, trading and marketing in South and East Asia extend from South Korea to Indonesia, with operations based in Singapore and Kuala Lumpur, Malaysia. BP has a one-third stake in the Singapore Refining Company and in a refinery at Pasir Panjang in Singapore. In September 1990, BP began operating Papua New Guinea's first commercial hydrocarbons project. The company also has a stake in the Chevron-operated Kubutu oil exploration project in Papua New Guinea which the oil companies expect will produce 100,000 barrels of oil a day and environmentalists fear will bring catastrophe to the previously pristine Kubutu Lake ecosystem [See Assault on Papua New Guinea," Multinational Monitor, June 1992 ].

Fueling apartheid

 BP prides itself on knowing no boundaries in its transnational ventures and it vehemently defends its extensive operations in apartheid South Africa. The international anti-apartheid movement regards the company as a long-standing enemy. BP sells oil and gasoline to the South African military and co-operates Durban's South African Petroleum Refineries, the largest refinery in the country.

BP is one of the last three multinational oil companies which continue to refine crude oil in South Africa despite an international oil embargo. The company also violated the United Nations oil embargo against colonial Rhodesia (now Zimbabwe), supplying the then white-minority-led government with oil smuggled through South Africa and Mozambique until the country gained independence in 1980.

 In 1979, BP's Nigerian holdings were nationalized in response to allegations that the company was violating Nigerian sanctions and using its operations there to supply oil to South Africa. BP's Nigerian project, a joint venture with the Norwegian government- owned Statoil, resumed its operations in 1991.

 BP's South African subsidiaries include: BP Southern Africa Ltd., which markets petroleum products; Adibis Ltd., which markets chemical additives; and South African Lubricants Manufacturing Co., a lubricants blending operation, which is another joint venture with Royal Dutch Shell. In 1990, BP had 3,187 employes, $342 million in assets, 864 retail outlets and 125 depots and distribution points in South Africa.

In 1990, BP's U.S. division, BP America, cut its funding of the Cleveland National Association for the Advancement of Colored People Freedom Fund dinner, an annual event, when company officials learned that the theme for the fundraiser was South Africa, and that Randall Robinson, executive director of the Washington, D.C.-based, pro- disinvestment lobbying group TransAfrica, would be the keynote speaker.

 According to TransAfrica Deputy Director Anne Griffin, "The BP/Shell operations in South Africa are an international model in the anti-apartheid movement of what should not be allowed to happen. Until apartheid is completely and overwhelmingly dismantled," she says, the organization remains opposed to foreign companies doing business in South Africa and will continue to sponsor its boycott of BP products begun in January 1986.

 BP justifies its presence in South Africa by stating its position that "more investment means more employment" and therefore "more income and more housing and more education" in South Africa. Cleveland TransAfrica representative Grace Waite Jones charges, "The company says it is giving employment opportunities to Black South Africans. But the opportunities provided its workforce are negligible when compared to BP's negative impact: the stalling of democracy in South Africa. Without crude oil, the South African government would stop working. So BP is keeping the apartheid government alive."

 In 1986, BP Southern Africa began funding an integrated housing development in Cape Town, which it says will contribute to the elimination of segregation in housing. "We believe we can do more good by our presence in South Africa than we can by pulling out," says Thomas Koch, manager of public relations at BP America. Jones argues, "A couple of nice houses paid for by BP do not make up for apartheid segregation. Any charity the company performs in South Africa is akin to putting a tiny bandaid on an open wound."

BP's America

 Much of BP's international clout comes from its growing success in the United States, where in recent years the company has become a major competitor with U.S.- based oil companies. BP America currently accounts for about 40 percent of the parent company's global assets.

BP America has undergone a number of mergers and realignments in the past 20 years. The company's original North American division, BP Oil Corporation, was headquartered in New York. On January 1, 1970, BP Oil merged with Sohio. BP and Sohio agreed that BP's 25 percent interest in the Ohio company would be increased to 53 percent when the companies' Alaska production reached 600,000 barrels a day, which occurred in January 1979. In March 1987, BP bought the rest of Sohio and is now the largest crude oil producer, one of the largest refiners and the seventh-largest retail gasoline marketer in the United States.

Since June 1987, British Petroleum has owned 100 percent of BP America, which is headquartered in Cleveland, Ohio. The company touts itself as a positive force for urban renewal in Cleveland, employing 4,000 people and making financial contributions to the local United Way chapter and other non-profit organizations. Jones, however, who held monthly demonstrations at the BP headquarters between 1989 and 1991 in coalition with anti-apartheid, environmental and anti-Gulf War activists, claims that the company's commitment to the city is hollow.

 "The bottom line is always the profit margin," she says, citing the approximately 800 lay-offs BP announced this year at its 45-story headquarters and research laboratories in Cleveland. "This fall BP also cut short its contributions to the Cleveland Free Clinic and a college scholarship program for local public high school students. The company cries poverty due to the recession, but it is cutting back on public works while it continues to make big profits at the gas stations," Jones contends.

Drilling Alaska

BP America was one of the first companies to exploit crude oil in the Prudhoe Bay area of Alaska. As majority owner of the Alaska pipeline, BP has resisted government regulation of oil activities in the state and sought permission to extend exploration to the Arctic National Wildlife Refuge (ANWR), threatening the existence of 180,000 Porcupine caribou that calve on the Alaska North Slope where BP plans to locate its oil and gas production. Porcupine caribou are a vital source of food for the Gwich'in people who live on both sides of the Alaska-Canada border. BP's plans to drill in the ANWR indicate the company's particularly callous willingness to sacrifice the environmentally sensitive area and its people in exchange for regional oil yields which are predicted to last only 6 months. The Gwich'in of Arctic Village and the Venetie, Chalkytsik, Fort Yukon, Old Crow, Fort McPherson, Arctic Red River, Aklavik and other traditional communities in northeast Alaska and northwest Canada have organized in an effort to keep oil companies out of ANWR.

Roger Harrera, executive consultant for BP's Alaskan operations, BP Exploration Inc., has described the objections to ANWR drilling as an "emotional and aesthetic plea for untouched and untamed natural areas to satisfy the yearnings of mankind for the beauty and wilderness of nature," referring to the controversy as merely "an issue of local fauna." During the Persian Gulf War, BP began pushing its agenda in Alaska as a solution to U.S. dependence on imported oil.

BP Exploration lobbied to pass a bill proposed by Senator Bennett Johnston, D- Louisiana, aimed at reducing U.S. dependence on imported oil that would allow oil and gas development in the refuge. Although the bill was withdrawn in November 1991, environmental and indigenous rights groups in the area believe that it could be resurrected following the 1992 presidential election. For the time being, BP has dropped its Arctic Refuge campaign, but Cynthia Monroe, project coordinator for the Gwich'in Steering Committee in Anchorage, says that "once the next president is elected, industrial forces will gear up again to drill in the refuge. BP and the other oil companies will push very hard to force a pro-drilling bill through Congress."

"BP suceeds as a corporation," says Monroe. "It makes profits for its executives and shareholders. Where it fails is as an energy company, which should develop sustainable and safe energy. That is what BP is not interested in doing." Local criticism of BP's activities in the region stem from previous environmental disasters: In January 1987, 966,000 gallons of BP oil leaked from a leased tanker into the Gulf of Alaska. In October of the same year, the same ship spilled 630,000 gallons of BP oil in the North Pacific. In 1990, the state of Alaska sued BP and other owners of the Alaska pipeline for not responding promptly and adequately to contain and remove spilled oil from the Exxon Valdez.

Leading in contamination

 In August 1991, based on its analysis of Environmental Protection Agency (EPA) toxic release inventory data for 1990 (the most recent available), the Washington, D.C.- based public interest group Citizen Action named BP among the top 10 polluters in the United States. BP America's two plants in Lima, Ohio were "far and away the biggest polluters in Ohio" according to a report released by the Ohio Public Interest Campaign in November 1988. The Lima chemical plant and adjacent refinery produced 68 million pounds of toxic pollution in 1987, including 8.2 million pounds released into the air, 58.2 million pounds injected underground, 380,000 pounds dumped into the Ottawa River and one million pounds disposed of on the land. The same two BP America plants also lead Ohio in chemical accidents, having spilled or accidentally released more than 300,000 gallons and 33 million pounds of pollutants into the water, groundwater and air between 1978 and 1988, according to the Ohio EPA.

 Ed Hopkins, director of Citizen Action's toxic action project, says that many of the chemicals released by BP America in Lima are potent carcinogens, including benzene, chromium and acrylonitrile. Others can cause genetic damage, fetal damage or birth defects at unsafe levels of exposure; these include formaldehyde, ethylbenzene, methyl ethyl ketone (MEK) and carbon tetrachloride. Lima residents are afflicted with abnormally high death rates for cancers of the lung, rectum and cervix and for emphysema, chronic bronchitis and bronchial asthma, according to Ohio Department of Health studies. Residents of the south side of Lima, near the BP plants, suffer from chronic nosebleeds and watering eyes.

In 1989, Lima area residents formed a community organization, Allen County Citizens for the Environment (ACCE), a BP watchdog organization to pressure the state to monitor the health risks posed by the company to the 1,000 employees at the Lima refinery and chemical plant and to local residents. "BP has treated us as a PR problem instead of taking our concerns seriously," says ACCE member and former president Norine Warnock. "The company is not used to having citizens ask questions. BP says enough has been done because the county commissioner completed an air monitoring study. Well, the study looked at car exhaust. It did not mention acrylonitrile or ammonium, which is a serious lung irritant."

 In 1991, ACCE brought a lawsuit against BP, claiming that the amount of pollutants discharged from the Lima refinery into the Ottawa River exceeds the company's National Pollutant Discharge Elimination permit. A U.S. district court ruled, however, that there was "insufficient evidence" of the charges. BP responds to accusations of environmental negligence by pointing to the recent replacement of a 35-year old nitric acid plant in Lima with a new $17 million facility, which the company says will reduce acid-rain producing nitrogen oxide emissions by 95 percent. Dave Little, spokesperson for ACCE, says that "the primary problem is that the company is trying to get away with the absolute minimum," describing BP's attitude towards environmental and citizens concerns as "hostile."

"Allen County is an economically depressed area," says Little. "For about two years now the company has been using the line that anything done for the environment will cost jobs. Well, what is really hurting the economy here is Lima's reputation. Outside of this town, people know that Allen County ranks number one in Ohio for pollution and that BP's Lima plants rank number one in the state for emissions. People won't move here. Businesses won't move here."

"I have health problems," says Warnock, "and my four-year-old daughter has serious respiratory problems. Maybe those problems are not connected to BP but maybe they are. Who is going to tell us? I've spent thousands of dollars on hospitals and medication for my little girl. That money doesn't help the economy in Lima; it only helps the hospital. The guy across the street has cancer. The woman down the street has brain cancer. The woman around the corner has brain cancer. The woman who lives next door to my child's friend has cancer. The woman on the next block has breast cancer. The guy next door to her has cancer. And so does the woman next door to him. Those are just the houses I can see when I am looking out my own front door."

 The situation in Lima presents a worst case scenario which is not anomalous to BP's record of environmental accidents and violations:

BP's Koch points out, however, that the company and its partners in the Wytch Farm oilfield development in southern England have been recognized by The Royal Society of Arts for integrating the development into "a scenic area of high amenity value."

Disgraceful labor record

BP has demonstrated no more respect for its workers than it has for the environment, and has racked up a miserable labor record.

Citizens fight back

 BP's oil and chemical empire continues to grow, garnering profits at the expense of human rights, environmental health and safety. In a public relations brochure appropriately titled "The World of BP," British Petroleum maintains that its belief in responsibility to the public has resulted in "a proud history and a strong foundation for all our tomorrows." Yet the company's actual record creates an entirely different picture -- of an arrogant multinational presence surrounded by victimized communities.

Fortunately, citizens' organizations will continue in their efforts to hold the company accountable for its actions. "Even after five years of dealing with BP, I would like to think that it could start running a much cleaner operation," says ACCE's Warnock. "I would like to think that its management could start taking us seriously. I don't think BP is anywhere near that point. But we will keep trying. We are tenacious." Grace Jones agrees. "British Petroleum's record stands, in South Africa and here in Ohio. And people are beginning to take notice."