by Steve Coll
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.”7
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.8
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.9
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.”10
Over 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 a
nd 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.11
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.12
“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.”13 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 Valdez 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.”14
The decisions Browne took at BP were not merely cosmetic. In 2002, the corporation announced that it would no longer fund “any political activity or any political party,” a form of neutrality that ExxonMobil could not claim. Browne eventually extended BP’s corporate benefits to the gay and lesbian partners of its employees; Lee Raymond declined to do so. On climate, however, BP dodged and wove during the first Bush term. “The science of global warming is unproven,” Browne said in 2001, a formulation not much different from Lee Raymond’s. “I question whether it will ever be proven. But there is a risk there,” Browne said. This risk was enough to “begin to take steps to begin to make a difference.” Still, the danger was not large enough to justify the costs and the global bargain contemplated by the Kyoto Protocol: The treaty was a “bridge too far,” Browne said. Only very gradually would BP shift toward acceptance of the cap-and-trade system, a regulated, government-imposed marketplace that emerged in Europe to control carbon dioxide emissions and help governments there attempt to keep their commitments under Kyoto. He searched for “the right level of transparency or openness in order to build rather than to undermine trust in a world of suspicious media and single issue N.G.O.s.”15
There were some public policy matters where not even the most creative corporate policies or public relations campaigns could make much difference, however. The invasion of oil-laden Iraq was one.
Eleven
“The Haifa Pipeline”
On February 11, 2003, Douglas Feith, the Bush administration’s under secretary of defense for policy, appeared before the Senate Foreign Relations Committee, where he argued that the Iraq War, if it arrived, would not be a war for oil. “All of Iraq’s oil belongs to all the people of Iraq,” Feith said. The Bush administration had “not yet decided on the organizational mechanisms” through which the Iraqi oil industry might be restructured after the overthrow of Saddam Hussein, but he felt that he should “address head-on the accusation that, in this confrontation with the Iraqi regime, the Administration’s motive is to steal or control Iraq’s oil.” That charge was commonly made, but it was “false and malign.”
By the time of his Senate testimony, Feith had already become a punching bag for opponents of the Bush administration and its foreign policies. He was a tall, extroverted man with a mop of graying hair and round wire-rimmed glasses. His articulate self-confidence was of the type associated with student council vice presidents, and it grated on some people similarly; General Tommy Franks, then in command of all U.S. military forces in the Middle East, told colleagues at the time that he considered Feith “the fucking stupidest guy on the face of the Earth.” (Franks’s Pentagon colleagues debated his own acumen.) A lawyer in private practice before joining the Pentagon at the request of Secretary of Defense Donald Rumsfeld, Feith proved willing, at the least, to argue like a litigator about the rationales for a U.S. invasion of Iraq.
He told the senators that the United States had no historical record of stealing other countries’ resources through war. “We did not pillage Germany or Japan; on the contrary, we helped rebuild them after World War II,” he said. After Desert Storm, the U.S.-led campaign to liberate Kuwait from Iraq, which prevailed in 1991, “we did not use our military power to take or establish control over the oil resource of Iraq or any other country in the Gulf region.”
The idea that the Bush administration would take on the human and financial costs of overthrowing Saddam Hussein’s regime in Iraq for the sake of grabbing that country’s oil did not make logical sense, Feith continued. “If our motive were cold cash, we would instead downplay the Iraqi regime’s weapons of mass destruction and pander to Saddam in hopes of winning contracts for U.S. companies,” he said. “The major costs of any confrontation with the Iraqi regime would of course be the human ones. But the financial costs would not be small, either. This confrontation is not, and cannot possibly be, a moneymaker for the United States. Only someone ignorant of the easy-to-ascertain realities could think that the United States could profit from such a war, even if we were willing to steal Iraq’s oil, which we emphatically are not going to do.”1
In the weeks to come, Bush administration cabinet officers and independent analysts would endorse Feith’s position that the war had, as Defense Secretary Donald Rumsfeld put it, “literally nothing” to do with oil. The administration published its war aims; these made no mention of energy or economic issues. The invasion’s stated goals were to eliminate Iraq’s weapons of mass destruction, end the threat Saddam posed to neighboring governments, stop his regime’s internal tyranny, cut off his links to terrorism, maintain Iraq’s territorial integrity, liberate Iraq’s people, and create a democracy. It was true that Saddam’s capacity to threaten the world was in part a result of the cash he received from oil sales; in that limited but important sense, the administration’s war aims could be said to be
about oil. It could also be argued that the United States would not have incurred all the risks and costs of invading Iraq if the country did not have large oil reserves and therefore an innately important place in the global economy and regional power balances. But that was different from arguing that the United States intended to launch a war for the purpose of acquiring Iraq’s reserves.2
What would it mean, in any event, for the United States to “steal” Iraq’s oil? The question itself illuminated America’s dysfunctional search for a national understanding of “energy security.” The United States formally owned oil only to operate government vehicles and aircraft, and to fill a 700-million-barrel strategic petroleum reserve. The government amply met these needs by purchasing oil on the open market. The American economy required about 12 million barrels of imported oil every day in 2003, but these supplies were purchased from private and government-owned oil producers around the world; invading Iraq wouldn’t change that market much, except perhaps unfavorably, from an American perspective, by raising prices through the disruptions caused by war. It was possible to imagine that President Bush might wage war as a conscious or unconscious proxy for the interests of American-headquartered oil companies, notwithstanding the fact that most of these companies were global in scale, employed more foreigners than Americans, and paid more taxes to overseas governments than to the United States Treasury. Yet even if the Bush administration were thoroughly infused by such corporate-inspired perfidy, invading Iraq did not seem like an especially cost-effective way to help ExxonMobil, Chevron, or Conoco expand their booked oil reserves. In an essay published on the Iraq War’s eve, the oil analyst Daniel Yergin argued that even a “liberated” Iraq might be reluctant to allow much direct participation in its oil sector by American firms, because of the prevalence of resource nationalism among Arab populations. He cited the example of Kuwait: “After the 1991 Gulf War, a liberated and grateful Kuwait announced that it would open its oil industry to foreign investment in order to boost production. Eleven years later, that still hasn’t happened, owing to nationalistic opposition.”3
