Tuesday, April 21, 2009

Environment: BP Chairman casts a giant shadow

By David Cronin - IPS
Republished permission Inter Press Service (IPS ) copyright Inter Press Service (IPS)
www.ipsnewsasia.net and www.ipsnews.net

BRUSSELS, Apr 20 (IPS) - Peter Sutherland, chairman of British Petroleum, never realised his goal of becoming president of the European Commission. Back in 1994, Britain recommended him for that post – at a time he was director-general of the World Trade Organisation - yet he failed to secure the crucial backing of the government in his native Ireland.

Despite having his ambitions thwarted, Sutherland continues to wield a significant level of influence over the Commission, the European Union executive. Since 2007 he has been an official adviser on energy and climate change to the present Commission chief José Manuel Barroso.

Sutherland, himself a former EU commissioner who has filled some of the most powerful vacancies in international commerce and politics, has claimed that he counsels Barroso in a personal capacity, not as BP chairman. But environmentalists point out that his top ranking in BP means that he could have divided loyalties between the interests of the public and that of a vast private company.

This has been most evident recently with the development of an emissions trading system (ETS), purportedly designed to regulate the amount of carbon dioxide released by industry into the atmosphere.

The most contentious aspect of this scheme - which began operating in 2005 - relates to which industrial sectors should have to pay for permits to pollute. After it emerged that power companies were reaping windfall permits by selling unused permits that they had been given free of charge – four major utilities in Germany were reported to have raked in 8 billion euros (12.5 billion dollars) between them within a year of the ETS launch - the Commission proposed a series of modifications to the scheme in January 2008. While drafts of the proposal advocated that oil refineries should have to buy their permits through auctioning, this was removed from the final version.

BP belongs to an alliance of energy giants known as the European Petroleum Industry Association (EUROPIA). This group has lobbied vigorously to ensure that all permits to refineries are awarded free of charge, contending that making them pay for the permits would damage the industry's competitiveness. While much of the lobbying has been behind closed doors, EUROPIA admitted in 2008 that it provided "significant input" into the debate on how emissions trading should work in practice.

"There is certainly a potential conflict of interests here," said Benjamin Diss from Platform, an environmental campaign group in London. "BP might be trumpeting its efforts to promote solar energy but it is essentially still an oil and gas company. If Sutherland is advising the EU, that's obviously because he has a lot of useful knowledge. But it's knowledge that is skewed towards that type of energy supply."

Sutherland, who declined to comment when contacted, appears eager to assert his green credentials. He has been asked by the Danish Prime Minister Anders Fogh Rasmussen to address how business can assist the fight against climate change at a conference in Copenhagen that will take place soon after he steps down as BP chairman later this year. The conference is designed to serve as a curtain-raiser for UN-sponsored talks aimed at fashioning a successor to the Kyoto protocol, the key international accord on regulating greenhouse gas emissions. The talks are scheduled to conclude in December, also in Copenhagen.

The public image of ecological responsibility that Sutherland is seeking to construct appears at odds with the nature of his activities - and those of his business colleagues - in Brussels.

BP employs about 20 staff in an office located a short stroll from the headquarters of the main EU institutions. According to details entered into a register of lobbyists set up by the European Commission, it spent less than 250,000 euros (334,000 dollars) last year on trying to influence EU laws.

Corporate Europe Observatory (CEO), an organisation which monitors lobbying in Brussels, regards this sum as deceptively low. It points out that BP spent nearly 8 million dollars on lobbying in the U.S. last year. The reason for the huge discrepancy between its stated expenditure in Brussels and that in Washington could be that the U.S. has stringent rules covering the activities of lobbyists. By contrast, the EU has taken a voluntary approach, with the result that there is no obligation on companies to reveal the size of their public relations war-chests.

CEO spokesman Olivier Hoedeman says that the absence of mandatory rules has allowed Sutherland and other BP representatives to mask the true extent of their links with EU officials. "Of course, we cannot know if Sutherland personally lobbied (on the emissions trading system)," he said. "But this was part of BP's lobbying offensive. We see the limits to the transparency on lobbying with the kind of information that BP registered. They don't have to mention which legislation or dossiers they lobbied on. They are able to cover their tracks and keep us guessing."

Sanjeev Kumar, a specialist on the ETS with the World Wide Fund for Nature, concurs. "Any advice that he (Sutherland) gave should be documented and should be accessible to all," Kumar said. "There needs to be a code of ethics. Nobody has really defined effectively the role of advisers (to the European Commission). It is very vague."

Also a leading figure in the investment bank Goldman Sachs and until recently a board member of the Royal Bank of Scotland, Sutherland's lengthy curriculum vitae includes stints as director-general of the World Trade Organisation and as Ireland's attorney general.
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