07 November 2008
American Oil Company Making Best of Tough Situation
Occidental Petroleum building relationships of trust with local residents
Washington — In Colombia, Occidental Petroleum has to worry about more than finding oil.
Occidental's oil-drilling installations and its pipeline to the sea coast “have been attacked hundreds of times,” said Richard Kline, a company spokesman. “The challenge,” he said, is contending with “one of the most dire security situations ever faced by an oil company.”
While violence has decreased since the election of President Alvaro Uribe in 2002, killings of civilians continue, according to the State Department, Amnesty International and Human Rights Watch.
Occidental has taken advantage of the improved security conditions and reduced tensions of recent years to build better relations with the communities in which it operates, especially in the eastern state of Arauca, site of its main oil fields. The decline in violence has allowed the company to expand the community development it long has funded. This includes literacy programs, agricultural training for small farmers and support for small businesses.
“The aim is to help people be self-sustaining,” Kline said, “so that [radical] groups on the left and the right would be less appealing to them.”
The U.S. Embassy in Colombia, which nominated Occidental for the 2008 secretary of state’s Award for Corporate Excellence, says the company is also an “exemplary environmental steward” for the conscientious way it has reforested land on which it has drilled.
But what Occidental itself sees as its most innovative policy is its decision to start collaborating with local and international human rights groups in 2006.
As part of its change agenda, Occidental adopted one of the first comprehensive human rights policies in the oil industry. The policy includes dialogue with various involved parties, an approach to assessing risks and training for employees and contractors.
A key partner for Occidental has been International Alert, a London-based group that promotes reconciliation in areas plagued by violent conflict. The group has been helping Occidental develop a long-term relationship of trust with local citizens, businesses, trade unions and other groups by entering into a dialogue about how company activities affect them.
“We didn't tell them what to do,” said William Godnick, International Alert’s senior policy adviser for Latin America. “We helped them develop a framework and ask the right questions.” He said a number of large companies have adopted “corporate responsibility” policies in recent years, especially when they operate in countries with armed conflicts. Occidental has made a good-faith effort, according to Godnick. “We've seen the company really mature in the way it sees stakeholders,” he said.
The U.S. Embassy in Colombia said Occidental's efforts to build relationships with local citizens groups and with Colombia's national oil company, Ecopetrol, have done much to create a more stable and prosperous environment in the areas where it operates. “These public-private partnerships have bridged a chasm of mistrust and created previously unattainable opportunities for local citizens long the target of narco-guerilla violence,” the embassy says in a written statement.
