Corporate 'sin-washing' and the London Olympics

Dave Zirin's article on corporate 'sin washing' at the London Olympics exposes the corporate criminality of the major corporate sponsors of the Olympics including Dow Chemicals, BP, McDonald's,  and Coca Cola.

Global corporations like Dow Chemical, Adidas, and McDonald's are paying upwards of $100 million USD to sponsor the 2012 London games and associate themselves with the Olympic brand -- but with their brands already well-established, what do corporations get in exchange for these expensive sponsorship deals?

According to Dave Zirin, sportswriter and columnist for The Nation, the payoff comes through "corporate sin-washing."

"More than any other enterprise, if a company associates themselves with an Olympics, it really creates a positive feeling in the mind of the consumer," he says.

But, "if you look at the main sponsors that the International Olympic Committee has brought on board, you see companies like Dow Chemicals, British Petroleum, McDonald's, Adidas." 

These companies, Zirin tells the Center for Media and Democracy, are some of "the worst corporate criminals" most in the need of an Olympic absolution.

Zirin uses the example of Australian Aboriginal boxer Daniel Hooper to highlight the hypocrisy of the London organizers stance on corporate sponsorship

Zirin's favorite example of odd, corporate-friendly Olympic rules involves Australian boxer Daniel Hooper, who wore a T-shirt with an Australian Aboriginal flag in a recent boxing match to showcase his Aboriginal roots. Hooper could face disciplinary action for making a "political statement" by wearing the shirt, which contains a flag not recognized by the International Olympic Committee (IOC). The flag is, however, recognized by the Australian government as an official flag of Australia.

"What's particularly perverse about this is that if Damien Hooper had chosen a shirt that said 'I love British Petroleum' or 'Dow Chemicals is A-OK with me', he would have been allowed to compete." Zirin observes "it's amazing to me that wearing a shirt that says 'Dow Chemicals' is not seen as a political statement, while wearing a recognized flag of your own country is a political statement, because the IOC chooses not to recognize that flag."

 Phil England makes similar points in this piece in Ceasfire where he highlights that the Olympics organisers breached their own guidelines on ethical contracting and ignored concerns and complaints from civil society groups about the corporate sponsors.

The apparent unwillingness to apply any of the Olympics’ supposed ethical principles to the selection of corporate sponsors, brushing aside numerous civil society complaints and campaigns, is certainly one thing that the games can claim to be consistent about.

Why is the London Olympic organising committee (LOCOG) breaching its own Sustainable Sourcing Code? and the International Olympic Committee (IOC) breaching its own Code of Ethics? The former promises to “place a high priority on environmental, social and ethical issues when procuring products and services for the games”, while the latter states that the support of sponsors “must be in a form consistent with the rules of sport and the principles defined in the Olympic Charter” which defines Olympism as “seeking to create a way of life based on the joy of effort, the educational value of good example, social responsibility and respect for universal fundamental ethical principles”.



These are serious questions for the respective committees as well as for the Commission for a Sustainable London 2012 (CSL) and its standards and ethics expert David Jackman. Because, as with other forms of cultural sponsorship, these company donations aren’t magnanimous acts of philanthropy, but calculated acts of public relations. At their recent AGM, the BP board outlined how they had made a business case internally for their sponsorship of the Olympics, the costed returns for which included building and protecting their brand. Inside the industry this is understood as maintaining the “social license to operate”.

In a very real sense then, the Olympics are colluding in the public relations campaigns of corporations who are engaged in large-scale environmental and human rights abuses, many of which are the subject of legal actions. The IOC and LOCOG are therefore complicit in normalising and cleansing the image of some of our most heinous corporate criminals and CSL is failing to properly address this.

Nuclear safety sacrificied for corporate profits

Rosa Moussaoui writes in Truth Out that the crises unfolding in Japan's nuclear reactors demonstrates the destructive power of corporate capitalism and the neoliberal logic. 

Moussaoui argues that nuclear security is far too important to be left in the hands of private corporations. She is right.

Since 2003, the big Japanese private group aimed at "reduction of costs of maintenance" in order to render profits "secure".

Profit at Any Price. This could be the motto of Tokyo Electric Power (Tepco), the multinational that exploits the nuclear power plants at Fukushima. The largest producer of electricity in the world illustrates the excesses of an industrial sector in which neo-liberalism has unfurled to the last extremities of its destructive logic.

Poof. At the beginning of 2010, Tepco announced net earnings of 157.7 billion yen (1.19 billion euros) for the period from April to December 2009, as compared with a loss of 137.7 billion yen (1.04 billion euros) a year earlier. Miraculous recovery, for a multinational company whose annual turnover decreased, at the same time, by 14%. In order to restore profits, the officers of the company affirm, Tepco had to restrict its "current expenses", which dropped by 22%. Officially, this was due to a drop in the price of petroleum needed for the functioning of its thermal power plants. The explanation is a bit thin, for an industrial outfit that insisted, in a financial document in August 2003, on the necessity of "a rationalization of the totality of operations, including a reduction of the costs of maintenance" in order to render its profits "secure".

Has performance of maintenance, and thus the security of equipment, become a variable for adjustment? Tepco has not hesitated to do this in the past. Between September 2002 and April 2003, the multinational was constrained to shut down its 17 nuclear reactors. This was a consequence of revelations concerning the falsifications of some thirty inspection reports on three nuclear power plants in the group. It involved, among other aspects, the electro-nuclear giant’s act of disguising three incidents that had occurred in the nuclear facilities in Fukushima and Kashiwazaki-Kariwa.

This scandal implicating Tepco is not an isolated one. In March 2007, to cite but one example, the company Hokoriku Electric Power admitted having knowingly hidden a nuclear incident that occurred at the plant in Shikamachi eight years earlier, the 18 June 1999.

But who cares about security, when the race for profits takes command? With 28 million clients in Tokyo and in the region, Tepco announced triumphantly last 30 July that it wished to multiply by 5 its projections of profit for 2010-2011. Between April and December 2010, the multinational banked a net profit of 139.8 billion yen (1.27 billion euros). Surfing on the green wave, the group, already in the lead with its parks of wind turbines, planned to invest heavily in renewable energies. Ever so ready to threaten whole countries, the stock and bond rating company Standard and Poors granted Tepco an AA- on its long term debt, which is its fourth highest rating.

At the Heart of the Catastrophe, Tepco Remained Obsessed by Financial Considerations

Even at the heart of the current catastrophe in Fukushima, TEPCO remained obsessed by financial considerations. "It seems the the company waited until the last possible moment to drown the heart of the reactor by pumping sea water. In fact, if you drown the heart of the reactor, it becomes no longer usable," observes the Energy branch of the CGT [1]. Clearly, public ownership is not an all-risk insurance policy in these matters. But to what horrifying excesses can we be lead by the shameful acts of profit-taking. In 2005, in his essay From Tchernobyl to Tchernobyls [2], the winner of the Nobel Prize for Physics, Georges Charpak put us on our guard: "The problem of security in the nuclear power plants is too crucial to be left only in the hands of financiers, those champions of stock market optimization". Cruelly premonitory.

Corporate crime and no punshment

Great piece by Russell Mokhiber comparing the case of Leandro Andrades, a man imprisoned for life for stealing five videotapes worth $150, with the the failure of the US authorities to pursue criminal charges against any of the corporate executives responsible for two of the biggest crimes in US history- the BP oil spill in the Gulf of Mexico and the financial meltdown of 2008-2009.

Two recent reports of inquiry into the Gulf Oil Spill and the 2008-2009 Financial crises failed to make any mention about corporate crime or criminal liability, despite finding massive systemic breaches of the law.

As Mohkiber writes:

"We live in a country with two systems of justice. One for the Leandro Andrades of this world and one for the Wall St Banks and their executives and the oil companies and their executives.... We have two systems of justice. One for the corporate class.. and one for the rest of us"

The forgotten history of WA's sacrifice zones

The story of the Esperance lead pollution scandal has been consigned to the "dustbin" of Western Australian history. Hopefully, new research by the Conservation Council of WA might focus attention on the contamination of the town by a mining company and its state government partners.

Over 2 years (2005- 2007) Magellan Metals and the Esperance Port Authority allowed lethal lead dust to escape from storage facilities and contaminate the town of Esperance and surrounds. Over 9500 birds died of lead poisoning and hundreds of children suffered lead poisoning from elevated lead levels.

A Western Australian Parliamentary Inquiry found that the Esperance Port Authority and Magellan Metals (and 2 other government agencies) were guilty of "critical failings" in their handling of toxic material in allowing lead carbonate particles to escape during Port operation.

The Inquiry concluded that the deaths of 9500 native birds in December 2006 and March 2007 resulted from lead poisoning from Magellan Metals lead carbonate concentrate which had been handled by the Esperance Port Authority from April 2005 until March 2007. A quarter of the children under 5 years of age who were tested showed a blood lead level over 5 µg/dL. The Committee concluded that the exposure of the Esperance community to lead was a result of:

• the ongoing transport to, and inloading practices at, the Esperance Port which occurred almost every second day over some 23 months;
• the escape of lead dust during the usual out loading practices at the Esperance Port, which occurred on 22 occasions; and
• a number of key dust incidents occurring during ship-loading of the Magellan lead concentrate at the Esperance Port, which released significant lead pollution into the environment, and in the absence of any containment or clean up, caused on-going exposures to lead.”

The Report found that the Esperance community had been let down by the actions of the Esperance Port Authority, Magellan Metals and the WA Department of Environment (DEC).

The Esperance Port Authority was fined over half a million dollars after admitting responsibility for the lead poisoning. Magellan Metals escaped without any serious penalty after agreeing to a $9 million settlement to clean up the town. As part of the agreement the State Government agreed not to pursue any criminal or legal charges against the company.

The scandal is back in the news this week as a result of resarch by the Conservation Council of WA. The Council reports that even though the lead pollution problem scandal was supposedly fixed, local research shows that local insect eating birds have lead levels in their feathers about 8 times background lead levels. The birds are at threshold level for lead pollution in birds.

These levels raise serious questions about the effectiveness of the cleanup. A State Government report released earlier this year claimed that three years after the crises the poisonous lead dust still present in the town  remained a major threat to bird life and animal life but presented no "serious threat to human health"  

But why should we believe a report commissioned by a State Government agency that has utterly failed in its job to regulate mining companies and their Government partners and has failed time and time again protect the community. During the Esperance crises, Government agencies, including the Health Department, continually downplayed the seriousness of the problem and denied any serious risk to human health.

Like many other places in WA, Esperance is what US author Steve Lerner calls a "Sacrifice Zone"- communities forced to live with the harmful social and environmental impacts of poorly regulated mining and industrial activity. 

Martin Bruckner's remarkable book Under Corporate Skies tells the shocking story of another Western Australian "Sacrifice Zone"- this time the struggle between the community of Wagerup and the multinational mining corporation Alcoa and its ally over three decades- the WA Government. Brueckner tells a story also consigned to the dustbin of Western Australian history. His book describes the the same pattern of denial, protection of mining and industrial interests, collusion by State Government agencies and  dismissal and trivialization of community concerns that has been evident in the Esperance scandal.

These "sacrifice zones" exist all over WA, in towns and communities where mining and industrial activity are dominant.  These are places and people sacrificed on the alter of corporate profit and economic growth. 

The harms caused by poorly regulated mining and industrial activity- ill health and death, scarred land, polluted, air and water, despoiled environment and human landscape and a fraying social fabric- are trivialized, and denied, and if proven, they are simply dismissed as a cost of economic prosperity or considered not serious enough to warrant attention

The most important West Australian book published in 2010

The book Under Corporate Skies, A struggle between people, place and profits by Martin Brueckner and Dyann Ross is the story of a West Australian community torn apart and people's lives destroyed by the power of a multinational mining company protected and supported by the WA government. 

 In WA we are used to State Governments actively protecting and promoting the interests of large mining and resource companies, but the story of Alcoa, the small southwest town of Yarloop and the WA Government is deeply troubling. In this review to be published in Online Opinion Professor Gavin Mooney concludes that this important book shines the light on the shocking state of democracy in WA. 

A community versus a corporation … while government looks on

Gavin Mooney, Co-convenor WA Social Justice Network, Honorary Professor University of Sydney

‘It seems that whatever Alcoa says the government has to do, they’re too scared to disobey…. I think Alcoa’s got all the control. They tell the government what to do.’  Yarloop resident.

The above is a quote from this book* which tells the David and Goliath story of the struggle between the small West Australian community of Yarloop and the multinational corporation, Alcoa World Alumina, which has a refinery at Wagerup, just next to Yarloop to the south of Perth. The win by David in the original version is pretty much story book stuff. In this real world version from Brueckner and Ross, David has lost out big time. And the original story is nowhere as poisoned as this one – with poison occurring at two levels – as perceived by residents through the pollution in the air at Yarloop and through the bastardry of government (and other institutions such as local universities).

Brueckner and Ross tell the story of this ‘struggle between people, place and profits’ in a remarkably dispassionate way. But it is all the more savage in its telling as a result of that.

The authors take us through the problems faced by the local community as a result of the pollution – air, noise and visual – from its corporate neighbour. They tell how so many local residents have had their lives destroyed and not just their health as a result of both the presence and the behaviour of Alcoa. Perhaps inevitably, given how these things work, the local neighbour when it comes to decision making was not truly local at all as the real power in Alcoa is in a far off board room in the US. It seems that at least some of the local Alcoa management were human in responding to the problems being created for the local community. But they had little power to act.

Thus the authors argue (p 245): ‘As a US-based multinational corporation with executive managers able to influence decisions of governments across borders, Alcoa exercised placeless power while at the same time maintaining a ‘powerful place’ at Wagerup by occupying the territory and pursuing its commercial interests.

One aspect of all of this that comes over strongly is that there is a degree of cleverness, one might say deviousness, with corporates that can be quite breath taking. In this case Alcoa set up voluntarily a ‘Land Management Plan’ which created a buffer zone around Wagerup which involved some financial compensation/relocation for residents in that zone. Sounds good. But it did not include all Yarloop residents and split the town in terms not only of compensation but also emotionally. Deliberate on the part of Alcoa? Who knows but it certainly resulted in weakening the community position vis-a-vis Alcoa.  Then because Alcoa did this voluntarily ‘the government refrained from being involved when residents fell foul of the voluntary relocation as proposed by Alcoa’ (p173). Deliberate on the part of Alcoa? Welcomed by the government? Who knows but it certainly resulted in weakening the community vis-a-vis not just Alcoa but also the government.

Scary stuff and heartbreaking to read about the desperate and despairing fight of the Yarloop residents. 

The book exposes a number of intriguing issues. Just a couple. The question of what constitutes scientific evidence (especially in epidemiology) and how and by whom that is interpreted is discussed and science and epidemiology do not emerge well.

How corporations can act to protect themselves and infiltrate social institutions is fascinating and worrying as again the book exposes. The authors write of how (p227) Alcoa ‘secured a Professorial  Chair and gave its name to a new research centre  - Alcoa’s Centre for Strong Communities (sic - or sick?) - at Curtin University of Technology’ in Perth.  When the authors questioned the company about this initiative they were told ‘there was to be no relationship (with Yarloop) as the new Centre was not going to be addressing the specifics of the Wagerup issue.’

This particular point is close to my heart. I was a member of staff at Curtin at that time and was invited on to local radio to talk about the fact that this ‘Centre for strong communities’ was being funded by Alcoa who were at the same time perceived by the Yarloop community as weakening them! On the afternoon of the interview I was summonsed by a senior manager at the university and had my fingers rapped for daring to speak out as I had in the media.

The influence of the corporations on government and other of our key institutions like our universities needs to be exposed again and again and again. This book does an excellent if frightening job of doing that.

So where does this leave us? There is a risk in the wake of the “success” of the mining corporations in destroying the tax on super profits that we grow to accept that this sort of behaviour by corporations is all fine and that business interests and the national interests as implied at the weekend by Michael Chaney are often synonymous.

Acceptance of that places our democracy at risk.

We need the Brueckners and the Rosses of this country to tell this sort of story and we must be glad that they do. But telling the story aint enough. We must read their story! Please do that. Their tale is horrendous so be sure to have a stiff drink before you start – especially if, as I do, you live in WA. 

 

*Under Corporate Skies, A struggle between people, place and profits. Martin Brueckner and Dyann Ross.  Fremantle:  Fremantle Press, 2010 $26.95. 316pp.

Corporations that kill people: the sourge of asbestos

Perth, the city where I live is the asbestos cancer capital of the world, with the highest known incidence of asbestos related disease in the world.

The events that caused this situation constitute perhaps the greatest industrial and corporate crime in Australian history.

Asbestos is a deadly substance, a carcinogen that has taken millions of lives world wide, leading to it being banned or restricted in 52 countries. Global estimates are that between 5-10 million people may die as the result of exposure to asbestos and asbestos related products.

Despite the millions who have died and will die in the future as a result of exposure to asbestos, the asbestos industry continues to grow around the world. When it comes to asbestos, corporate power and industry greed for huge profits are insatiable.

Here in Western Australia, the human cost of exposure to asbestos is a legacy of the Wittenoom asbestos mine where asbestos was mined from the 1940's to the late 1960's, and the presence of many industries that processed, manufactured and used asbestos, for example in construction.

Groups such as the Perth based Asbestos Disease Society of Australia have been tireless in the pursuit of justice for the people affected by asbestos.

Perth based writer Miriam Miller's book Shattered Lives: The Human Face of the Asbestos Tragedy is a searing expose of the human consequences of the reckless and callous disregard shown by many corporations in WA, including CSR and James Hardie, and the industries that prospered on the use of asbestos, all of whom placed profit and greed ahead of human wellbeing.

Miriam Miller's fine book continues the tradition of Ben Hill's Blue Murder, his 1989 book on the history of the Wittenoom mine and of the men and women who worked in the mine or lived in the town, and Matt Peacock's Killer Company, a shocking expose of the evils perpetrated by James Hardie, the building products company that spent years covering up the dangers of its asbestos products.

A new report Dangers in the Dust: Inside the Global Asbestos Trade has found that asbestos industry lobby groups have spent some $100 million since the 1980's to preserve and grow the asbestos market in developing nations. They have been hugely successful. In India the asbestos market grows 25% each year, the result of a powerful, New Delhi-based trade group that spends millions on pro-asbestos ads, lobbying, and counteracting critical science on the mineral. China is now the largest exporter of asbestos in the world where demand for the substance is booming.

In countries like Russia and Brazil where asbestos is mined, powerful connections between the asbestos industry, corporations and sovereign governments exercise control over asbstos mining.

Western governments, such as Canada, continue to fund and support the mining and export of asbestos to Mexico, China and India. The Canadian Government is a staunch defender, supporter and funder of the asbestos industry (The Canadian Resources Minister is a former President of the Canadian Asbestos Chamber of Commerce).

Victims of the Bhopal Disaster still seeking justice

In the early hours of December 3, 1984, around 40 metric tonnes of toxic methyl isocyanate (MIC) gas leaked into the atmosphere from the Union Carbide chemical plant in the central Indian city of Bhopal and was carried by the wind to the surrounding slums.

25,000 people died in the immediate aftermath and the years that followed, and another 500,000 suffered serious consequences. The Bhopal disaster was the world's most deadly industrial disaster and the worst example of "corporate killing" in history. The website of the International Campaign for Justice in Bhopal is an excellent source of information.

Union Carbide, a US company, was responsible for the Bhopal disaster. Union Carbide now longer exists, the company being taken over by Dow Chemicals, another US company, in 2001.

The letter below was sent to the US President by over 100 Indian victims of the Bhopal disaster.

Mr Barack Obama
President
United States of America

Dear Mr President Obama,

With a great deal of interest, we have been following your tough stand against British Petroleum for the oil spill in the Gulf Of Mexico, particularly your demand to know whose 'ass needs to be kicked'. We think your demand for corporate accountability for causing huge environmental damages is worthy of emulation by other governments around the World.

May we draw your attention to a bigger disaster that took place in the city of Bhopal in India in December 1984 that has officially killed over 15,000 people (about 25,000 people unofficially) and seriously injured nearly half a million people by now. This disaster was caused by another mega corporate entity called Union Carbide, headquartered in the United States of America, unlike BP whose parent company resides in Great Britain.

Through 'friendly' interventions of the Reagan administration that ruled the US in 1984, not only was Warren Anderson, the CEO of Union Carbide sent back from India even though he was arrested and cases were registered against him and the Union Carbide, but similar overtures resulted in all criminal cases against Union Carbide to be dropped in a shameful out-of-court settlement for a paltry US$470m. Twenty six years later, the local court in Bhopal, fettered by these collusive legal manipulations could at best convict six Indian officials of the Union Carbide India Limited for two years of jail, for which all the accused were given instant bail. The parent company based in the US, against whom charges exist in Indian Courts, is unanswerable. So no one pays for the death of over 15,000 people! Another major US corporate, Dow Chemicals, that bought Union Carbide in 2001, refuses to accept its liability for cleaning up the toxic wastes at the closed factory, that is still harming citizens of Bhopal, mainly from water that is contaminated with leached poisons stored in the abandoned factory; or liability for just compensation to the victims.

We are of course more than aware that the Indian Government and the Indian subsidiary of Union Carbide (UCIL) are as complicit in this disaster as the US government, the parent company Union Carbide Corporation and Dow Chemicals. For twenty six years the stricken but surviving gas victims of Bhopal have waged a sustained battle with the Indian establishment – governments at the center and in the state of Madhya Pradesh, scientific, medical and industrial monitoring institutions - in courts and streets, and will continue to do so. But the subtle pressure of the US administration, contested alien tort laws of the US and the discriminatory legal functioning of the US system that puts a higher cost to a US life than that of in Bhopal has made it necessary for the victims to fight on both fronts - the US and the Indian administrations, corporations and judicial systems - for over a quarter of century now.

It is well documented that the UCC is a guilty party since it deliberately exported a defective plant whose safety systems were grossly lacking compared to the parent plant at Danbury, West Virginia. The UCC also hid facts about the toxicity of methyl-isocyanate, while it was aware about its deadly effects. The guilt about these criminal acts requires the US judicial system to act; just as the inability of the Indian inspectors to check these shortcomings requires the Indian judicial systems to book the culprits.

Is it too much to expect that you use the same yardsticks of accountability you are using for BP for the terrible oil spill in the Gulf of Mexico, for corporations based in the country you rule? Whose 'ass' should the citizens of Bhopal kick if governments selectively shield their corporations and officials from legal accountability? How would you react, for example, if because of the pressure of the British media that is asking Prime Minister Cameron to ‘stand up’ to you, Mr. Cameron made a 'friendly overture' to you to back off from 'kicking anyone's ass', meaning British Petroleum's? If you wouldn't back off, then consistent with your stand, the citizens of Bhopal and the whole World demand from you that:

1. You signal/order that judicial processes be allowed, both in the US and India, to take their course in fixing responsibility of corporations and individuals of the US, responsible for the Bhopal carnage; dismantling the manipulative obstacles put up in these intervening years. This is crucial to restore the subverted system of justice.

2. You set processes in motion that make Dow Chemicals own up their responsibility for liabilities, that includes cleaning up the toxic mess that resides in the closed factory they now own. Any assurances to the contrary that they might have received from some Indian Ministers acting individually are laughably irrelevant and illegal.

3. You work with the same sense of collaboration with the Indian government on this issue to provide justice and proper compensation to Bhopal victims, that you proclaim you have achieved with the Indian government on the issue of 'global terrorism'.

Just as the US administration has demanded from the BP that it set up an escrow fund of US$10b for compensation pending legal settlements arising out of the oil spill, we demand from you to ask the erstwhile UC, Dow chemicals and the judicial system of US to reverse the out-of-court Bhopal settlement, and deposit amounts commensurate with the deaths of over 15,000 persons and half a million injuries in Bhopal, and process the extradition of guilty people immediately.

In anticipation of a prompt response and decisive action,

Will any corporation be held to account for the Montara explosion?

It is looking even more doubtful that any corporation will be held to account for the West Atlas/Montara explosion and oil leak, and subsequent ecological, economic and environmental damage, despite it being the largest oil explosion, blowout and leak in Australian history.

And the Federal Government continues to approve drilling operations, despite the lessons of the Montara catastrophe.

The Report of the Montara Inquiry into the explosion and 75 day long leak from the West Atlas/Montara oil spill in the Timor Sea (off the Western Australian coast) has been handed to the Federal Government. However, Martin Ferguson the responsible Minister is refusing to release the Report, citing legal reasons.

The Greens have called for the public release of the Report. In light of the eerie similarities (I have written about these before here) between the Montara explosion and the explosion and catastrophe on BP's Deepwater Horizon rig in the Gulf Coast, there is growing international interest in the Montara Report. Halliburton, the company responsible for cementing on the Montara well was also responsible for cementing on the Deepwater Horizon rig. It appears that cementing operations were a factor in both the Montara and Gulf explosions and blow out.

Public release of the Montara Report is essential, not only to ensure West Australians know what happened and to identify who was responsible, but also to ensure that such catastrophes never occur again. The regulatory, safety, engineering and management lessons of the Montara explosion will be important in shaping government and industry responses in Australia, and the USA, particularly the Inquiry into the Deepwater Horizon Gulf of Mexico catastrophe.

Based on press coverage, it appears likely that the Montara Report will find :

• there were serious breakdowns in regulation, safety and management
• the blow out was to be the result of a long chain of poor decision making, inaction and miscalculations and corporate greed
• The well operator failed to follow its own safety procedures
  
• The immediate trigger for the explosion is likely to be failure of vital pressure containment caps used to plug the well and problems with cementing
• The well was not capped properly, causing it to burst.
  
• a single National Regulator for offshore drilling is needed (although the Federal Minister has in the past opposed this) is needed.

One of the forgotten issues is the adverse social and environmental impacts of the blow out and spill in Indonesian and Timor Leste maritime waters. The governments of Indonesia and Timor Leste are now seeking compensation for the adverse impacts from the Australian government and PTTEP, the Thai owner of the Montara rig.

Criminalise corporations not civil society

'Limited liability is at the heart of this rise of corporate power: it constitutes a blanket exemption of a special interest group from accountability for the actions of their companies"

Blankenburg and Plesch

One consequence of the corporate structure and form is the ability to escape and hide liability and responsibility. The tenets of "limited liability" and "corporate person hood" allow corporations to avoid criminal responsibility. This protection is not available to individuals or civil society groups. Governments and authorities rarely use the full power of existing law against corporations.

It is telling to compare the way the US Government uses the full force of the law against civil society groups and whistle-blowers who try to hold it and corporations to account, with its complete inaction against recidivist corporate criminals such as BP who in their reckless disregard are responsible for the deaths of workers and the destruction of ecosystems, environments, livelihoods, and industries in the Gulf of Mexico.

The US government has arrested and imprisoned, without trial, a whistle blower who leaked to WikiLeaks a video showing US forces murdering 100 people, mainly children, in Garani Afghanistan. The video, which showed a US army helicopter gunning down civilians, was released by WikiLeaks early this year and caused outrage around the world. The soldier who is alleged to have released the video has been arrested and detained in an US army prison in Kuwait. The Australian founder of WikiLeaks has been forced to leave the US and go into hiding in response to a "manhunt" by the US government keen to arrest and prosecute him.

WikiLeaks collects and publishes evidence of human rights abuse and illegality by governments and corporations.

But when it comes to recidivist corporate criminals such as BP, Massey Energy or Goldman Sachs there is tough talk about criminal charges but little action. There is no serious attempt by governments to hold corporations, corporate executives, and shareholders personally and criminally responsible for the company's crimes. Laws are rarely used or enforced against corporations and the responsible individuals. And if charges are laid they are usually against low level functionaries and, as in the case of the corporate killings by Union Carbide in Bhopal, it takes 25 years before anyone is legally held to account.

A case study of how corporate power works in the USA

On April 5 2010 the worst mining disaster in the USA in 40 years occurred at Massey Energy's Upper Branch coal mine in West Virginia. Twenty nine (29) miners were killed. The company responsible, Massey Energy, had a long history of safety and environmental violations. Its CEO and Chairman Don Blankenship has continually used his financial and political power to prevent scrutiny of the company and reject attempts to improve safety.

On the day before the explosion the company had received 2 citations for safety violations. In the month before the explosion it had been cited 57 times for safety violations.

Massey Energy is the 6th largest coal corporation in the USA and exercises immense political, financial, and legal power.

Russel Mokhiber runs Corporate Crime Reporter a US based website and newsletter that highlights corporate crime and corruption. It is a fantastic resource. The piece below appears on the website, along with other pieces on the explosion and the company responsible.

The piece is an example of how corporate power works.

Coal Intimidation

by Russell Mokhiber

Let's say you live in West Virginia.

And you want the local prosecutor to bring a criminal charge against Massey Energy.

And the responsible Massey executives.

For manslaughter.

For the deaths of the 29 coal miners who were killed on April 5.

At the Upper Big Branch Mine.

In Raleigh County.

So you put up a web site -- prosecutemassey.org.

And you urge people to sign a petition to the prosecuting attorney in Raleigh County -- Kristen Keller -- urging her to bring a prosecution.

And in the first week, almost 2,000 people sign the petition.

And let's say you design a billboard that reads -

29 Coal Miners Dead.

Prosecute Massey for Manslaughter.

And you purchase three billboard spots in the eastern part of the state.

Far from coal country.

Four hours away from where the miners died.

And put up the billboards.

And people see the billboards driving by.

When they get home, they go to the web site.

And they sign the petition.

And donate money to buy more billboard space.

And then you call billboard companies in coal country.

And you call up the biggest billboard company in the state and the country for that matter.

Lamar Advertising Company.

And you say -- hey, I want to pay to put up a billboard.

Sure, the billboard man says -- what does the billboard say?

Well, we'll send you the design.

And you send the design.

To Bruce Morrison of Lamar.

Bruce says he'll check with his general manager.

He writes back and says -- okay, we'll do it.

But you can't use the word "manslaughter" because no charge of manslaughter has been brought yet.

But Bruce, the point of the campaign is to persuade the prosecutor to bring a manslaughter charge against the company and responsible executives.

Before the statute of limitations runs -- April 5, 2011.

But Lamars say no.

We then turn to Kanawha Valley Advertising -- the second biggest billboard company in the state.

I speak with the head sales guy -- Frank Young.

Up front, I ask Frank -- do you have Massey as a customer?

Yes, Young says, but I'll ask the owner -- Wade Leslie -- anyway to see what he says.

Days go by.

No answer.

Finally, we get a letter faxed to us.

From Wade Leslie.

It's dated May 10, 2010.

Leslie doesn't say -- what are you nuts?

Massey is one of our clients.

I'm not going to do this.

No, Leslie says it's about the miners and their families.

Leslie says that "our primary focus at the present time is to assist our communities in the healing process and pray for the families affected by this terrible tragedy."

So, we wait a couple of weeks and e-mail Frank Young back and ask -- let us know when we can start to talk about justice for those responsible and bringing a criminal prosecution.

The statute of limitations is April 5, 2011.

No answer yet from Frank Young.

Finally, we approach Friendly Outdoor Advertising.

Friendly is a small company that has a number of billboards in Raleigh County -- some near the Massey mine where the 29 coal miners died.

We talk with Mike Rincic, the general manager for Friendly.

At first, Rincic says -- yes, we'll do it.

He says -- they've done controversial billboard ads before -- including for "adult entertainment" businesses -- like Lion's Den and Southern X Posure -- a topless bar.

"Some of the advertisers -- like Wendy's -- don't want to be on the same board as an adult entertainment store. And I can understand that for the kids' sake."

"And in today's world, there's a lot of women in charge of marketing -- and they consider this exploitation of women," Rincic says.

But we take the heat, he says.

And so, this Massey billboard shouldn't be a problem.

We talk price.

And we talk location.

I'll e-mail to you the locations, Rincic says.

No e-mail arrives.

Then Rincic calls the next day.

He's changed his mind.

But Friendly turns out to be a touch more honest than Lamar or Kanawha Valley.

"We worried about the possibility of vandalism -- they could hurt our property or tear your sign down," Rincic said.

"Plus, a lot of the people who have advertising with us are affiliated with the mining industry. It's probably not a wise business decision."

Do you have Massey as a client?

"No, but I'm sure that people we deal with sell supplies to Massey. Car dealerships sell to Massey employees. We just don't feel like it's a good move for us."

"And we're struggling -- we need the business."

"We never said no, until we asked around," Rincic said.

"I'm up here in Logan," Rincic said. "And yesterday, I'm talking to a machine shop guy. He probably services the coal mine industry. And I tell him about your billboard. And this guy says to me -- you want to get yourself killed, don't you?"

"Yesterday I was going to send you four locations that would have been possible. Vandalism is a possibility. And they could just tear your sign down. And there's a big possibility some of our customers just might not renew with us. They might say -- what did you do that for? Risk wise, if you were in my position, you would probably do the same thing."

"I was trying to be fair. But I just couldn't do it."

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. He is also founder of singlepayeraction.org.

Corporate power, corporate criminality and the worst ecological disaster in human history

"....whether or not the immediate trigger of the explosion is ever fully determined, there can be no mistaking the underlying cause: a government-backed corporate drive to exploit oil and natural gas reserves in extreme environments under increasingly hazardous operating conditions........ To ensure a continued supply of hydrocarbons—and the continued prosperity of the giant energy companies—successive administrations have promoted the exploitation of these extreme energy options with a striking disregard for the resulting dangers"
Michael Klare, The Relentless Pursuit of Extreme Energy

Writing in the Nation Michael Klare believes that the catastrophe unfolding in the Gulf of Mexico from BP's leaking oil rig is likely to be the greatest ecological disaster in human history. Michael Klare*, who is Professor of Peace and World Security Studies at Hampshire College, is one of the world's leading analysts of global energy and resource politics.

Although BP continues to minimize the amount of oil leaking from the Deepwater Horizon rig, Klare estimates that the amount of oil spilt is equivalent to an Exxon Valdez spill every 4 days. The destruction is catastrophic and probably irreparable.

The Gulf seafood industry, which provides much of the seafood consumed in the US, has been destroyed, perhaps forever. The oil has poisoned the water of the Gulf, depriving it of oxygen and killing entire classes of marine species and living creatures. Whole marine and coastal landscapes have been destroyed, likely to never recover.

Klare identifies a host of actors who bear responsibility. BP is the ultimate villain. BP, whose environmental and safety record is appalling, has used its financial and political power to protect itself from regulatory oversight. It has bought off political and regulatory bodies and avoided all forms of accountability and scrutiny. Its response to the spill has been inept.

Various contractors- Halliburton, Transocean, Cameron International- as well as government instrumentalities such as the USA Minerals Management Service, have all breached legislative and regulatory requirements

Ultimately though Klare argues, responsibility for the catastrophe lies with the Bush and Obama administrations. Klare writes

"...there can be no mistaking the underlying cause: a government-backed corporate drive to exploit oil and natural gas reserves in extreme environments under increasingly hazardous operating conditions"

Klare believes that the world has entered an even more dangerous period where disasters like this one will occur more frequently and will be more destructive. Klare argues that as long as the major resources and energy firms continue to rest future profits on exploring and drilling in ever-deeper waters and more risky locations—and governments collude with them in this—more catastrophes are inevitable. Worse, the oil and energy companies do not have the existing technologies to respond adequately to the new challenges.

*Michael Klare's latest book is Rising Powers, Shrinking Planet: The New Geopolitics of Energy

Corporate incompetence, corporate profits and explosions on offshore oil rigs

(image courtesy of the NY Times)

There are eerie similarities between last weeks explosion on the BP run Deepwater Horizon oil rig in the Gulf of Mexico that killed 11 workers and the oil leak and explosion at the Montara (West Atlas) oil rig off the WA coast in late 2009.

As we await the Report of the Rudd Government initiated Montara Commission of Inquiry into the 10 week long oil leak from the West Atlas Oil rig owned and run by PTTEP Australasia, the shocking explosion and sinking of BP's Deepwater Horizon rig in the Gulf of Mexico reminds us one again of the environmental and safety disasters caused by offshore drilling.

The explosion and subsequent sinking of the Deepwater Horizon rig killed 11 workers and is now pumping 42,000 litres of crude oil into the Gulf of Mexico. The oil has reached the Louisiana coast and threatens marine environments, marine life (including fish and birdlife) high value coastal wetlands and various industries.

The cause of the explosion in the Gulf of Mexico is not known, although an inquiry is investigating civil or criminal violations by the rig operators. As in the West Atlas case, the responsible company failed to activate devices to stop oil flowing in an emergency.

Only recently the US Government considered imposing tougher safety and environmental regulation, however the industry objected strenuously, claiming its voluntary programs were successful. It is also worth noting that in the same week as the explosion BP announced that its profits in the first quarter of last year doubled to $6.08 billion (from $2.56 billion).

Worth noting as well is that the loss of life and environmental catastrophe in the Gulf of Mexico is causing trouble for the Obama administration which was looking to expand off shore drilling without adequate safeguards.

Taking money that belongs to others: the criminality of excessive executive compensation

image copyright of Bruce Petty


In mainstream Australia there continues to be galvanized anger about the exorbitant salary packages corporate executives are paying themselves, in defiance of public opinion, economic realities and the public interest.

As public outrage grows and more shareholders revolt about excessive executive salary packages its time to break through the web of illusions and justifications about excessive executive compensation presented by corporate Australia, political leaders, the corporate media and given credence by bodies such as the Productivity Commission.

In a recent paper titled "Exorbitant CEO compensation: Just reward or grand theft" in the Journal Crime, Law and Social Change criminologist David Friedrichs argues that executive compensation packages should be considered as a form of white collar crime. For Friederichs it is time to criminalize this behaviour. He calls it a form of robbery.

Friederichs is Professor and Distinguished University Fellow, Sociology/Criminal Justice, The University of Scranton and a lifelong researcher on corporate and white collar crime.

He argues that the corporate culture and practices that provide for and justify excessive executive compensation for corporate executives not only creates what he calls "crimogenic conditions" but are likely to lead to the taking of money that belongs to others.

Friederichs writes:

""Walking into a bank with a gun and demanding money from a teller is one way to steal money... Walking into a corporate boardroom and securing from the board's compensation committee, made up of cronies, paid consultants, and even relatives, compensation of millions sometimes tens of millions or hundreds of millions is another way to steal money. The principal differences are that the second way of stealing money pays much better, is all too often legal, and does not result in criminal prosecution and imprisonment. This needs to change"

The practices of excessive compensation have come to be viewed as standard business practice rather than as part of a spectrum of corporate criminal behaviour that goes unrecognized and unpunished. That is how corporate power works. It redefines reality to serve corporate and private interests. Its time to challenge that.

Corporate Power and the corporate aristocracy

" Wealth privilege remains embedded in the ancient institution of the corporation. It is a privilege out of step with market ideals, which has led to wealth disparities that threaten our political ideals. We can never really have political democracy without economic democracy".
Marjorie Kelly The Divine Right of Capital

I am currently re reading Majorie Kelly's devastating critique of the corporate economy and of corporations. Kelly exposes six aristocratic principles that corporations are built on, and shows how wealth bias is embedded in the structure and operations of corporations.

It is interesting to read Kelly's book in light of the recent failures by the Australian corporate regulator ASIC to prosecute corporate malfeasance and criminality. Recent cases pursued by ASIC against high profile corporations and corporate leaders have been thrown out of the courts.

ASIC seems more interested in pursuing individual culpability than in addressing the institutional and systemic causes of corporate malfeasance and corporate criminality.

Kelly's book is a reminder that it is the systemic dynamics of corporations and the corporate economy, rather than the action of individuals, that is the root cause of corporate collapses, corporate scandals, corporate criminality, massive executive salaries and remuneration, and the appalling behaviour of Australia's corporate elite.