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ConocoPhillips faces an ethical test
Global Times | August 25, 2011 00:47
By Global Times
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Two months after the filthy oil spill, ConocoPhillips finally held a press conference. When a reporter asked whether the company would follow BP's example, Georg Storaker, president of ConocoPhillips China, said "There's no comparison between the two incidents."

Storake didn't offer any explanation as to why, leading the Chinese public to conclude Storake meant "China cannot be compared to the US." When oil filled the Gulf of Mexico, BP established a $20 billion fund. By contrast, China ConocoPhillips first denied the incident in Bohai, then attempted to pass the buck. Even now it remains reluctant to compensate for losses. The Chinese media has been criticizing the company, but criticisms have been brushed aside.

ConocoPhillip's poor performance is down to poor corporate ethics, but it is also down to China's legal environment. The hefty fine BP received was based on the US Clean Water Act, Oil Pollution Act and Endangered Species Act.

But in China, the Marine Environmental Protection Law is the only law that can be principally applied to ConocoPhillips. According to this law, polluting the marine environment means a fine of up to 200,000 yuan. (The polluter might be ordered to pay more if damage to the ecosystem can be proven.)

There are many differences between China and the US. It is not unusual, and it would be quite odd if ConocoPhillips outshone BP in giving out compensation. ConocoPhillips is like certain Westerners who live in China. They can be quite law-abiding back home, but break the law in China. Some global corporations can even outsmart their Chinese counterparts in under-the-table deals, bribing officials and cutting employee benefits.

ConocoPhillips is digging not only a hole in Bohai Bay but also a hole in China's legal system.

Not long ago, the country's North China Sea Branch of the State Oceanic Administration announced it would openly select and hire legal service institutes that have expertise in oil claims. ConocoPhillips is a multinational corporation with a powerful legal team and enormous experience. The general prediction has been it will do its utmost to duck any investigation or responsibility. In fact, all the apologies the company has issued so far have come about through continuous media pressure.

It would be much worse if a Chinese oil firm were solely responsible for this spill because the Chinese media would launch a much more ferocious attack on that company. Through Weibo, China's media power can force any state-owned company or institution to "surrender." But the media doesn't know how to handle companies like ConocoPhillips.
 
China's Ministry of Railways must take the public voice seriously, but ConocoPhillips doesn't have to. It can escape through loopholes in China's legal system.


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