Petron slips, fails vow to walk the talk

September 25th, 2006 by Site Administrator

WHILE PETRON Corp. is known for its much-publicized advocacy of corporate social responsibility (CSR), the way its executives initially navigated the recent oil spill accident near Guimaras has become another case study of how companies don’t usually walk the talk.

During the stormy afternoon of Aug. 11, 2006, an overloaded Solar 1 marine tanker chartered by Petron to transport 2.4 million liters of bunker fuel sank a few kilometers southwest of Guimaras, an island province. Reports reaching the Senate said that an initial 200,000 liters leaked from the sunken tanker and have “so far affected some 300 kilometers (187 miles) of coastline, 500 hectares (1,235 acres) of mangroves and 60 hectares (148 acres) of seaweed plantations, and at least 26,000 villagers in Guimaras.”

A day after the news of the oil spill broke, several employees from Petron Foundation flew to the area giving out canned goods, rice, and bottled water to 9,153 families. More employees were eventually mobilized to assist in the clearing of the oil spill, which, as of August 28, reached 123 metric tons of oil from an estimated 94.48 kilometers of seawater. Petron Corp. hired 869 people from the affected communities to help in the clearing for P200 a day. These residents had limited work options, anyway, since they couldn’t catch and sell the fish from their usual fishing grounds.

While Petron volunteers were on the ground, however, executives in Manila were taking a different tack. For days, company executives were quiet even as the public watched daily on TV images of human sufferring in Guimaras. Environmentalists, too, swarmed the area, and local officials implored Petron to be accountable. Several groups even e-mailed petitions calling on consumers to boycott Petron products.

Petron officials explained that the cargo was theirs, but the ship that continued to spill the deadly oil from 900 meters below sea level was not. In its disclosure to the Philippine Stock Exchange, the publicly listed company said, “Petron is not under any legal or contractual obligation to set aside 10 billion pesos in economic aid or to post a 100-million bond to pay for cleanup as under pertinent Philippine Coast Guard circulars, it is the spiller who is primarily responsible for conducting cleanup operations with the supervision of the Coast Guard.”

The pressure on Petron to act according to the public’s expectation could be measured against its declared adherence to CSR practices, according to Asian Institute of Management professor Felipe Alfonso. The accident certainly doesn’t call for being “legalistic.” Alfonso adds that there are other situations that call less for shoring up against future litigation than immediately accepting responsibility. He explains that the true essence of being a CSR advocate is to go beyond legal requirements and respond to social needs, whether immediate or otherwise.

Only after receiving all these flak did Petron chairman Nicasio Alcantara issue a statement accepting responsibility for the oil spill and the long-term rehabilitation of the island of Guimaras. “Regardless of who is to be blamed, people are suffering and something has got to be done to relieve those people,” says Alcantara in an interview with NEWSBREAK. Petron facilitated the consignment of a Japanese vessel that specializes in oil spill tragedies.

The whole incident puts the local players’ concept and practice of CSR to an acid test. Critics have considered efforts of companies to reach out to communities as a mere public relations gimmick. Christian Aid, a London-based social development projects funder, has noted that “CSR sounds and looks like a modern version of selfless philanthropy. The problem is that companies frequently use such initiatives to mask or defend operations which come in for public criticism.”

Von Hernandez, campaigns director of Greenpeace Southeast Asia, was quoted in news reports chiding Petron for highlighting its CSR only when sales benefit the firm.

At the end of the day, Petron has to reconcile how it professes to care for its foundation’s beneficiaries, while initially shunning responsibility for an environmental damage caused by a contractor’s faulty decisions. The global trend for CSR is for companies to take responsibility also for the performance of those it does business with.

At best, Petron’s experience reinforces the need to adhere to the international requirement for double-hulled oil tankers. The Solar 1 is singlehulled, thus the industrial oil that was left in the drowned tanker continued to spill out, aggravating the damage.

The costs involved in the oil spill will far outweigh the P20-million fund balance that Petron Foundation has for this year. But the foundation’s initial work in Guimaras shows that its work benefits the company as well.

A Petron volunteer says that scooping oil and cleaning up shorelines and mangrove areas using plastic ladles and absorbent cloths would begin at 7 a.m. and end at 4 p.m. Petron Corp. has tapped 5 percent of its total workforce “to participate in the work being done on the island,” says Alcantara.

Volunteering is not new to Petron. In fact, the foundation has authored a guidebook to aid companies on how to manage employee volunteer programs. Volunteering is perceived as an effective approach to enjoin the employees to participate in social work, which is typically relegated to the company-funded foundation. Petron Corp. counts the number of hours spent by its staff and executives on social programs for promotion purposes.

Petron Foundation is an active member of the League of Corporate Foundations and the Philippine Business for Social Progress, both groupings of companies professing to be advocates of CSR, the buzzword for businesses integrating acceptable social practice and helping resolve social ills via private sector resources.

The foundation is one of the few local players that publish a report on its CSR projects and measure their impact on beneficiaries. Last year, its CSR report was titled “Beyond Philanthropy.” The foundation reported that since 1986, it had distributed 4,200 storybooks and collected 367 metric tons of garbage from coastal areas, among other accomplishments.

These figures, however, are easily dwarfed by the growing number of affected families who depend on the fishing grounds that feed on the seawater sanctuary of Guimaras. These are now slithered with globs of deadly oil that has snuffed out the fragile ecosystem. (Dennis D. Estopace. Newsbreak, September 12, 2006)