Private Empire: ExxonMobil and American Power (29 page)

If a survey reported progress in ExxonMobil’s reputation in comparison to, say, Chevron, Raymond would comment, “Just remember: Chevron is having the same meeting today and their guys are saying exactly the opposite of what you just said.”

The more he learned about the details of public opinion surveying—how, for example, survey questions had to be asked exactly in the same form for the results to be truly comparable—the more Raymond doubted its validity as science. He did not want to ignore it entirely, and he budgeted for continual opinion surveys, but he declared that it would not drive his decision making. “If you start to play to that kind of thing, where does that end?” All oil companies saw their reputations rise and fall mainly as a function of whether retail gasoline prices were high or low, Raymond believed; the rest was just noise.
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Cohen accepted that the public’s sense of being vulnerable to volatile gasoline prices and, more generally, to the political power of big oil corporations, was nearly universal. The implication, he concluded, was that ExxonMobil should seek to be credible rather than popular. The corporation’s communications should be clear, consistent, and fact based. ExxonMobil’s leaders and employees should accept that there would be many people who did not like what they had to say about public issues, but some of the company’s skeptics might nonetheless be persuaded to accept that the corporation’s positions were the product of empirical analysis. Global oil production was indispensable to the American economy—in that respect it was very different from, say, the manufacture of addictive tobacco products or the promotion of a particular image of a youthful lifestyle through the sale of soft drinks. The resurrection of ExxonMobil’s reputation could not be regarded as a marketing goal, equivalent to the establishment of a new soft drink brand, Cohen told his colleagues; it should be seen as an outcome of consistent, credible communication, in the face of predictable and persistent public skepticism.
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D
uring the Aceh crisis, Robert Haines, the manager of international government relations who worked for Cohen out of the Washington office, held regular off-the-record meetings with representatives of Human Rights Watch to hear the organization’s concerns and to try to persuade its investigators that ExxonMobil was doing everything it could to control the abuses of the Indonesian military. Haines used the sessions to present ExxonMobil’s brief about the conflict: The corporation was a guest in the country; its security arrangements were a requirement of its contract; ExxonMobil exercised no control over the T.N.I.; and the corporation did not condone human rights violations. Yet Cohen and Lee Raymond had still not signed the Voluntary Principles on Security and Human Rights developed in 2000 by the Clinton administration and the Blair government in Great Britain. They may have wondered whether the Bush administration would abandon the initiative, but as it turned out, Bush developed a strong interest in human rights issues, and in 2002, his administration formally embraced the Voluntary Principles as official policy. Around that time, Ken Cohen decided that he should revisit ExxonMobil’s own decision about the Voluntary Principles and begin to think more deeply about how the corporation could improve its credibility on human rights questions.

On one of his regular trips to Washington, Cohen invited Mike Jendrzejczyk, the director of Asia advocacy at Human Rights Watch, and his colleague Arvind Ganesan to dinner at the Four Seasons hotel in Georgetown. Ganesan was a lawyer; Jendrzejczyk, as one of his colleagues put it, had “the charm of a con man, the energy of a five-year-old, and the persistence of a used-car salesman.” That was not exactly the personality profile cultivated by ExxonMobil in its lifelong employees, but Cohen had learned to accept human rights and environmental activists as he found them. The violence in Aceh was continuing. Cohen refused to discuss the specifics of ExxonMobil’s natural gas operations there; the lawsuit filed on behalf of some of the province’s torture victims was now pending in federal court, and Ganesan and other activists had learned that if they raised Aceh specifically in private meetings with Exxon officials, they received silence and a “meeting over” look. On global human rights more generally, however, Cohen saw the Four Seasons dinner as an opportunity to open a dialogue. His message was, as Ganesan recalled it, “We’re doing a great job, but we think we need to be more engaged.”
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Cohen invited Ganesan to speak at an off-site retreat for about seventy-five rising ExxonMobil managers. The executives were senior enough to have earned an internal designation as “gold-” or “platinum-” level leaders; their reward was a multiday public relations boot camp at a corporate retreat center in Norwalk, Connecticut. Other corporations retreated to semitropical golf resorts; at ExxonMobil, there was Norwalk. Ganesan traveled there on October 27, 2002. He had attended corporate retreats before, but the ExxonMobil event struck him as “one of the strangest” in his experience. He felt that he was in a classified facility. He was not allowed to enter the meeting room until his speaking time arrived and he was ushered out immediately afterward; the atmosphere seemed “clinical.” Later, he was told that he had been invited not only so that the managers could hear his views about oil corporations and human rights, but also so that he could provide a kind of live exercise in how to deal with a social activist.
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Ganesan reviewed for the assembled managers the history of Human Rights Watch. He described why he and other activists believed that oil production hurt poor countries more than it helped them: “Energy wealth does not necessarily lead to better standards of living, increased democratic participation in government, or a better climate for human rights. Instead, economic, social, and political conditions may stagnate or even deteriorate.” He described the appalling human rights records of the governments that were major oil and gas producers, starting with Saudi Arabia, a business partner of ExxonMobil’s in the refinery and chemical industries. The Saudi monarchy, Ganesan pointed out, “executes prisoners, engages in torture, curtails due process rights, and uses barbaric forms of punishment such as amputations and beheadings.” Nor was its record unique. Seven members of O.P.E.C.—Algeria, Iran, Iraq, Kuwait, Libya, Qatar, and the U.A.E.—were “undemocratic with poor human rights records and limited economic diversification.” Three others—Indonesia, Nigeria, and Venezuela—were “nominally democratic but plagued with widespread corruption and poor human rights records.” New oil exporters such as Angola, Azerbaijan, and Kazakhstan were becoming “models of corruption, mismanagement, and human rights violations.” ExxonMobil operated in many of these countries and collaborated with the governments Ganesan found so wanting. He then turned to the reputation of ExxonMobil itself. He had decided not to spare the managers’ feelings.

“I have interacted with ExxonMobil for at least the last five years, and found them to be hostile and unproductive prior to this current effort,” he said. “ExxonMobil seemed like an arrogant, opaque company that was hostile to social responsibility and preferred to go its own way.” He continued: “This is not just my perception of the company, but shared by every NGO and many others. Several company representatives have come to me over the years and have justified their companies’ actions or inactions by saying, ‘At least we’re not ExxonMobil.’”

He did finish on a note of aspiration. There was “another widespread perception” of ExxonMobil, namely, that “once it decides to do something” it will “do it better than anyone else in its industry.” If the corporation would seek to improve its human rights record in a serious way, its leadership in the international oil and gas industry “could have very beneficial effects.” ExxonMobil should expect, however, “a considerable amount of skepticism” if it tried to change its ways.
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Ken Cohen did not invite Ganesan back to his retreats. But he did not give up on his outreach campaign to Human Rights Watch. ExxonMobil formally signed up to the Voluntary Principles and gradually began to implement them.

Cohen also turned to Bennett Freeman, the former deputy assistant secretary of state for democracy, human rights, and labor who had helped conceive the Voluntary Principles before returning to a corporate consultancy practice. Freeman, too, attended Cohen’s off-sites at Norwalk. He respected Cohen’s professionalism. He regarded himself as a constructive critic of ExxonMobil, but also a sophisticated thinker about corporate responsibility who was not innately hostile to multinationals. When he appeared at Norwalk conferences or at private “opinion leader dialogues” with ExxonMobil executives elsewhere, Freeman usually broke the ice by remarking that the corporation’s human rights performance reminded him of what a critic once said about the music of Richard Wagner: “It’s not quite as bad as it sounds.”
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O
ver the years, Lee Raymond had told colleagues that he considered Royal Dutch Shell to be Exxon’s most formidable competitor. Royal Dutch had weaknesses, in Raymond’s estimation: a mind-boggling system of split Anglo-Dutch governance, a retirement age of sixty years that created disruptive turnover in corporate leadership, and a thick bureaucracy. Yet Royal Dutch maintained a greater focus on operations and project discipline than many other oil companies, Raymond told his colleagues. Exxon partnered in oil and gas operations with Royal Dutch more than any other company.

In comparison, Raymond and other ExxonMobil executives did not hide their disdain for BP. Increasingly there was a competitive edge to the rivalry. After the dust settled on the Big Oil merger scramble of the late 1990s, ExxonMobil and BP emerged as the nearest equals in size and global ambition, together at the head of the global rankings for shareholder-owned oil corporations. Raymond had admired one of BP’s previous chief executives, David Simon, but he told colleagues that in general, he found the corporation to be bureaucratic, undisciplined, and unreliable.

Raymond was also no Anglophile. ExxonMobil’s operations in Britain had frustrated him. The corporation ran refineries and retail gas stations in the United Kingdom under the Esso brand. In the O.I.M.S. era these divisions had not measured up very well. Raymond traveled to London and complained to his British subordinates: “You guys are really great in poetry. But getting up every morning at 6:30 a.m. and saying, ‘Okay, we are going to have the morning meeting—what’s going on in the refineries?’—that’s just not in your skill set.” He extrapolated the flaws he perceived at Esso to explain the enduring worldwide management weaknesses he saw at BP.

BP began to annoy Exxon in the environmental lobbying arena, too. By the end of the 1990s, more of British Petroleum’s assets were located in the United States than anywhere else; American public policy was critical to the company. John Browne, however, did not think about industry issues as Lee Raymond did. To ExxonMobil’s executives, he seemed to be more of a financial engineer than an operations man. Browne was also in tune with the transatlantic center-left politics of the late 1990s. He enjoyed a strong relationship with the newly elected British prime minister, Tony Blair. He had easy access to Bill Clinton’s White House; he was exactly the sort of big business leader Clinton-era Democratic politicians often seemed to value—a thoughtful globalist willing to endorse the principles, at least, of the mainstream environmental, human rights, and public health movements. Browne spoke early about the importance of global warming. He rebranded his company as the letters BP and eliminated all abbreviated and other reference to British Petroleum. He approved the marketing slogan “Beyond Petroleum.” The corporation’s marketing team chose a green-and-yellow logo that looked like the sun, as if BP were moving decisively out of the oil and gas business and into solar power. An ExxonMobil executive at the corporation’s British affiliate took a photograph of a BP retail gas station with a windmill on top and sent it to Lee Raymond with a note: “This is our competitor.”

“Oh,” Raymond said, dismissively. This is just a public relations strategy, he said. There is no substance to it; don’t overreact.
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BP did invest in some solar manufacturing in India, China, Australia, and the United States, where its plant was located in Frederick, Maryland, a convenient drive from Washington, D.C., and thus an optimum site for tours by members of Congress or their staffs who might be interested in alternative energy. Yet the scale of BP’s solar investments was minuscule in comparison with its oil and gas operations. The investments were understood within the corporation, according to one former senior executive, as justifiable not so much on business as on marketing grounds—BP Solar returned more to BP in favorable reputation than comparable sums spent on conventional corporate image advertising ever could.
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“The oil industry is already detested by people who think we’re indifferent to the environment,” Browne explained. “We must persuade our ultimate customers that this isn’t true.” Smog and other pollution from oil-derived fuels meant that customers “can see it and they can feel it and they can smell it. And they look at oil companies and say, ‘You brought us this.’ And we don’t want to be in that position.”
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Ken Cohen occasionally seethed in private conversation about BP’s image makeover. First, he pointed out, BP remained fundamentally an oil and gas company—one of the largest in the world. Of course it was “in that position”; how could it pretend otherwise? By 2002, Cohen had also assembled an issue-by-issue chart showing that on public policy controversies from climate change to human rights, the recommendations of BP and ExxonMobil were little different. Yet the public’s impression was that the two companies had diametrically opposed approaches to climate change and corporate responsibility. As a recently minted public affairs strategist, Cohen could appreciate, in professional terms, Lord Browne’s achievements. He knew, too, that BP had the advantages that ExxonMobil lacked—it was not burdened by the high negative ratings caused by the
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spill and therefore had much greater scope to reinvent itself in the public mind. BP executives and public affairs strategists looked on ExxonMobil the way many of its competitors did: as self-isolating, stubborn, inscrutable, and behind the corporate times. ExxonMobil executives rationalized their poor reputation, when compared with some of their industry peers, by assuring themselves that they conducted business ethically and operated safely and with financial discipline. They even took pride in their self-image as a corporation that did not try to pretend to be something it was not. Yet Cohen recognized that BP had accomplished something improbable—the cost-effective greening of an oil company. When he was in a more generous mood, he told his colleagues, “Hats off to them.”
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