Exxon Mobil under fire

Down to Earth No 52, February 2002

Recent attacks against oil and gas company Exxon Mobil in the war-scarred territory of Aceh have brought security concerns to the fore again, as Megawati's government struggles to convince investors they should bring their money back to Indonesia. The US company is also under attack internationally for its association with human rights violations in Aceh, for its poor environmental record and for its obstruction of positive action on global warming.

In December a convoy carrying employees of Exxon and its contractors was attacked by unknown gunmen in South Lhok Sukon, North Aceh district. One contractor employee was killed. Earlier the same month a minor explosion was reported inside Point-A, the company's operations headquarters in the Arun gas fields. The explosion caused minor damage to building facilities.

Exxon said it would continue operations despite the incidents.

Last March the company suspended operations at its gas fields and the liquefied natural gas (LNG) plant for several months due to the deteriorating security situation. Exports to Japan and South Korea were halted and the LNG plant lost $350.8 million as a result. Exxon's global profits fell in the 3rd quarter of 2001 for the first time in three years, partly due to the halt of production in Aceh. Limited operations started again in mid-July, but full production capacity of 1.6 billion cubic feet per day had not yet been reached by December.

The war in Aceh claimed more than 2,700 lives last year as the Indonesian military intensified efforts to crush the Free Aceh guerrilla movement (GAM). Now, a new military command has been announced for Aceh, which human rights defenders believe will mean an even higher security presence and a higher level of human rights violations against civilians. Protests against the command have been reported in the Acehnese capital, Banda Aceh. A statement circulated by INFID, the international NGO forum on Indonesian development, calls for the decision to be cancelled, argues that the security approach is "a wrong policy" and calls for military officers responsible for human rights violations to be brought to justice.

Negotiations between the Indonesian government and GAM ground to a halt last year and now special autonomy is being promoted by Jakarta as the prime non-military strategy to undermine support for independence. However, civil society organisations do not believe this will solve anything as long as the military is permitted to continue with its repressive approach. They believe increased revenues flowing back to Aceh will be corrupted by a local political elite which has no legitimacy in the eyes of the Acehnese population.

More troops and mobile brigade police have been assigned to guard Exxon's operations. Local estimates put the number of security personnel as high as 5,500 even before last year's suspension. Checkpoints have been set up every 500 metres along roads near Exxon's operations.

In January GAM spokesman Sofyan Daud accused Exxon of involvement in a "brutal military campaign". He said the company paid Rp 3 million per month (US$294) for each low-ranking military personnel in the "EMOI army"* plus lump sums. In the past GAM spokesmen have stated that GAM would target the company's military guards in attacks, not the company itself.

Last June, the International Labour Rights Fund, a US-based organisation, filed a lawsuit against Exxon to try and bring the company to account for its involvement in human rights violations committed by these military and police guards (see DTE 50 for details or www.laborrights.org for the full text). Exxon is opposing the lawsuit and rejects the accusations, saying it believes the ILRF court action was "without merit" and "designed to bring publicity to their organization."

*EMOI = Exxon Mobil Oil Inc.

International rating

Exxon's human rights record in Aceh is becoming more widely known in the outside world thanks to the publicity surrounding the ILRF lawsuit. How long it will take for Exxon to act is another matter - the company is notorious for its combative reaction to public criticism.

Exxon became the world's biggest private oil company following a 1999 merger with Mobil. The company is well known for its bank-rolling of President G.W. Bush's election campaign - it was the largest oil company contributor - and for its financial support for the Republicans. It is subject of a European boycott campaign because of its refusal to accept the link between greenhouse gas emissions and climate change. It is seen as a major obstruction to international action to reduce carbon emissions and closely associated with the US government's failure to sign the Kyoto Protocol, which commits countries to binding reductions in greenhouse gas emissions. (See www.stopesso.com) Exxon Mobil was also named as one of the ten worst corporations of 2001 by Multinational Monitor magazine. Dubbing Exxon 'King of global warming denial', the magazine highlights the company's involvement in the controversial Chad-Cameroon pipeline and its push (along with BP, Chevron and Phillips Petroleum) to open the Arctic National Wildlife Reserve for oil drilling. In June an Australian jury convicted the company's Esso Australia unit of 11 charges linked to a 1998 explosion which killed two people. Exxon is also continuing to fight against a £5 billion punitive damage verdict in the Exxon Valdez oil spill case of 1989. Multinational Monitor characterises Exxon as consistent in its "reckless behaviour and efforts to evade the consequences of its actions".

(Sources: Multinational Monitor December 2001; Financial Times 24/Oct/01; Sierra Magazine 1/Sep/01; Jakarta Post 16, 22/Dec/01; AFP 1/Nov/01, 11/Jan/02; Democracy declaration II Re-establishment of the Regional Military Command (KODAM) in Aceh: an attack on peace and justice, NGO statement circulated by INFID 16/Jan/02; Dow Jones Newswires 12/Dec/01)