ChevronTexaco in Latin America: a naive reflection on corporate ethics

 

 

The giant oil company ChevronTexaco appears to be exhibiting different ethical postures in different countries.  In Ecuador it has fought an admirable battle against the corruption of Rafael Correa’ s government. In that country a conspiration of politicians including Correa himself, a judicial system rotten to the core, mercenary lawyers and pseudo-technical gangsters are attempting to take billions of dollars from the company. This attempt is based on false accusations of environmental damages that took place, if at all, in PetroEcuador’ s watch, the Ecuadorian state-owned oil company. In Venezuela, however, ChevronTexaco maintains an excellent relationship with the Hugo Chavez’s regime, one of the most perverse dictators the country has ever had and one who has conducted a policy of harassment of most international oil companies during his stay in power. This relationship has been reinforced by the recent $2 billion loan given by ChevronTexaco to the Chavez regime to develop a mature, heavy oil filed that does not seem to require that significant amount of money. Some observers have expressed the opinion that this loan, at this moment in time, represents almost a political taking of sides of the company with the regime, a risky strategy given the increasing mood of displeasure of the nation with the strongman. Now, we hear that the company is discussing with YPF of Argentina the joint development of a huge shale gas and shale oil prospect called Vaca Muerta, one that could hold up to 22 billion barrels of oil equivalent (both as oil and gas). What makes this negotiation unusual is that YPF was recently taken over by the Cristina Fernandez’s government, in an action that is being legally disputed by Repsol, another giant oil and gas corporation. By entering in negotiations with the Argentinian regime at this moment they most certainly show a lack of solidarity that weakens Repsol’s claims.

A corporation, no matter how large, should ideally possess a consistent, universal, set of ethical values, not one for each country. It seems to me that this is not being the case of ChevronTexaco. They are victims in Ecuador but they seem to be in bed with the victimizers in Venezuela and Argentina.     

This apparent incoherence is reinforced by the fact that the leaders of Argentina, Venezuela and Ecuador share almost identical ideological postures regarding state control of the oil industry. This means that what happened to ChevronTexaco in Ecuador could also happen to them in Argentina and Venezuela. Chavez would not hesitate in retaliating against ChevronTexaco in Venezuela if they do not go along with the Ecuadorian extortion. In fact, Chavez already did this to Repsol, telling them that they better accept the takeover in Argentina with good grace or face measures against their Venezuelan assets.

Taking advantage of other’s misfortunes might give dividends in the short-term but is usually counterproductive in the long run. This reflection could be naïve on my part. I have never been a good businessman but I do believe that corporations, just as people, should have a heart.