A coalition of organisations spanning the political spectrum announced Thursday that they were pressuring British Petroleum (BP) Amoco to sell its state in China’s state energy company, over human rights and environmental concerns.
At a press conference here in Washington, DC, Tibetan rights groups, labour unions, an investment firm, environmentalists, and a conservative business council said they were distressed by PetroChina Co. Ltd.’s corporate governance, environmental record, and oil and gas exploitation on the Tibetan plateau.
“BP’s investment puts at risk not just their image but their corporate strategy,” said Simon Billenness, senior analyst with Trillium Asset Management, a “socially responsible” investment firm based in Boston.
BP Amoco is the largest foreign investor in PetroChina Co. Ltd. with 2.2 percent of its shares. Stockholders of BP, including Trillium Asset Management and the AFL-CIO, the largest federation of labour unions in the United States, are supporting a resolution, which if passed would require BP to divest its 578 million dollars’ worth of PetroChina holdings.
Last year the same coalition rallied investors against PetroChina’s initial public offering (IPO) of its stocks last year. Underwriters for the PetroChina IPO last year initially expected it to raise as much as 10 billion dollars. But, pressure groups claimed victory when only three billion dollars was raised.
Coalition members said they were not anti-China or against investment in China.
“We are not opposed to all corporate investment in China,” said Bhuchung Tsering, director of the International Campaign for Tibet. ”But Tibetans are gravely concerned that oil and gas exploitation on the Tibetan plateau will only serve to consolidate the Chinese control and occupation of Tibet.”
Tibet supporters are especially concerned about the impact of a natural gas pipeline project that stretches 1,000 miles from the gas fields of the northern Tibetan plateau to cities in China. Almost completed, the Sebei- Lanzhou pipeline is estimated to cost between 300 and 530 million dollars.
The exiled Tibetan government residing in India, says the development will serve to bolster China’s practice of moving Chinese settlers into Tibet to strengthen its grip on the territory.
A statement by Kalon T.C. Tethong, minister of the Department of Information and International Relations for Tibet, circulated at the press conference here, called for the BP’s divestment of PetroChina “as a way of ensuring that the destruction of the Tibetan environment and the disenfranchisement of the Tibetan people do not proceed with Western support”.
Kevin Kearns, president of the US Business and Industry Council, a nationalist industry lobbying group, also called for divestment from PetroChina.
“Profits earned at the expense of the human suffering of the people of Tibet …. are blood money,” he said.
When asked by IPS if his organisation was against any investment in China he said the council was not anti-China but against “certain forms of behaviour and policies undertaken by the Chinese government”.
In December, more than 50 organisations from 16 countries urged BP to either use its influence to halt the pipeline project or divest itself of PetroChina stock.
BP Amoco has argued that its two percent stake in PetroChina did not allow it to control or direct the company. It also said that BP Amoco is not involved in the pipeline project in Tibet.
In a letter to Tibetan groups last month, Chris Gibson-Smith, executive vice president of policies and technology for BP Amoco said that the company has “been working to ensure that PetroChina is fully aware of the concerns expressed by (the coalition)”.
But Steve Kretzmann, a consultant for the International Campaign for Tibet, said that without influence, BP should not be involved in PetroChina.
“BP’s admission that they have no influence over PetroChina management should serve as a wake-up call to BP shareholders – it’s time to get out of PetroChina,” said Kretzmann.
At the press conference, Michelle Chan-Fishel, co-ordinator of the green investment programme at Friends of the Earth – US, said PetroChina has a poor track record on environmental protection and has not set aside adequate funds for environmental compliance, management and technologies.
Official Chinese reports estimate that China has had 53 oil spills of 50 or more tons of oil in the last 26 years, she said. China is just beginning to develop emergency response plans for large oil spills.
Over the last decade, the Chinese government, the operator of PetroChina, has been under intense criticism from environmental and human rights groups for its construction of the Three Gorges dam on the Yangtze river. If completed, the dam would force more than one million people to relocate, inundate agricultural land and archaeological sites.
Shareholders of BP Amoco, said Chan-Fishel, should divest from PetroChina because the Chinese company has not adequately disclosed information about the estimated Initial Public Offering proceeds it intends to use toward capital expenditures, such as environmental capital improvements.
“Without adequate disclosure, shareholders are left in the dark about how much of the proceeds will actually be devoted to fulfilling the company’s promises of better environmental management,” she said.
BP Amoco shareholders will vote on the divestment resolution in April at the company’s annual meeting. Similar resolutions concerning the environment and human rights have gotten more votes than anticipated.
Last year, 13 percent of stockholders voted in favour of requiring the company to not drill for oil or gas in a protected arctic wildlife refuge. Normally, approval for this type of resolution is in the single digits.