Wednesday, May 23, 2012

Bloomberg Businessweek whines on behalf of Chevron

The cover of Bloomberg Businessweek's 05/14-20/2012 edition looks like something from a 1950s comic book depicting "wild Injuns" or from a Mel Gibson movie than something a serious business publication would want to use in this way.


The cover gives the subtitle of the cover story as "Tiny spill. Huge bill. How Brazil is shaking down Chevron". The BW website is less user-friendly than it used to be. There seems to be a podcast available of the cover story but not text. Sarah de Sainte Croix reported on the case with which the BW article deals for Global Post earlier this year, In Brazil, fallout from small oil spill risks big stain: Chevron and Transocean face criminal charges and hefty fines 03/29/2012:

The charges relate to an oil leak last November in Chevron’s offshore Frade field in the Campos basin. The field lies about 75 miles off the coast of Rio de Janeiro, in Brazil’s vast, sub-salt region, thought to have the potential to make the country one of the world’s biggest oil producers.

The leak seemed relatively minor: 2,400 to 3,000 barrels escaped before the well was shut off.

The Bloomberg Businessweek piece is titled "Over A Barrel" inside the magazine. After framing it on the cover as a nice American oil company being attacked by a gangster government ("How Brazil is shaking down Chevron") and by wild Injuns from the jungle, the report by Paul Barrett and Peter Millard actually provides some interesting information that doesn't fit so well into that framework.


George Buck is the president of Chevron's Brazilian subsidiary; BW pictures him as a nice guy over his head. It's not clear how far that image may reflect Chevron executives' own blame-passing. But Buck apparently did the usual corporate dance after a disaster, saying, "Chevron takes full responsibility for this incident." And, "Sincere apologies to the Brazilian people and the Brazilian government."

Barrett and Millard note of him, "After three years in Brazil, he speaks little Portuguese, relying heavily on translators." He's the president of Chevron's subsidiary there and he doesn't even speak the country's language? Gee, I wonder if that may have been some kind of clue to Brazilian officials that Chevron wasn't terribly concerned about Brazilian interests? Just a thought.

In any case, Brazilian officials weren't all in a "Look Forward, Not Backward" mood over the spill:

Brazilian politicians and journalists were not placated. "We're going to show this gang that they can't come down here and create whatever environmental mess they want," Carlos Minc, a co-founder of Brazil's Green Party and environmental secretary of Rio state, told the newspaper O Globo. "I want to see the CEO of Chevron swim in that oil." Local Greenpeace activists doused the door of Chevron's Rio officewith black ink. "Chevron: your mess, our loss," read one protester's placard. "There is no doubt that an offense occurred," declared Fabio Scliar, chief of the Brazilian federal police department's environmental division. "What interests me now is determining the responsibilities."
Barrett and Millard continue with a comparison that explains why Chevron officials feel that their poor little company is being bullied by the nasty Brazilians:

In December, Eduardo Santos de Oliveira, a Brazilian federal prosecutor, answered the police investigator's question when he sued Chevron for the equivalent of $11 billion for alleged environmental damage. Twelveweeks later a Brazilian navy plane spotted a second oil sheen above a different section of Frade, and on Mar. 21, Oliveira filed criminal charges against Buck and 16 other employees of Chevron and its main drilling contractor. The contractor, Transocean, had operated the Deepwater Horizon rig that exploded in the Gulf of Mexico in April 2010, killing 11 men and spewing 4.9 million barrels of oil.The Frade spill, by contrast, was capped at 2,400 barrels, according to Chevron. There were no injuries at Frade, no contaminated fisheries, no dead turtles, and no oil on shore (the slick moved out to sea and broke up swiftly). Even so, a judge acting at Oliveira's request ordered the Chevron and Transocean defendants not to leave Braziland had their passports confiscated. The accused, mostly veteran expatriates, include six Americans, as well as citizens of France, Australia, Canada, and the U.K.
Gosh, it wasn't nearly as bad as the BP spill in the Gulf of Mexico in 2010! And they got away with not much more than a slap on the wrist from the Americans! What in the world can these barbaric Brazilians be thinking? The stupid cover probably reflects just that attitude toward the exotic habits of South American natives who take foreign oil companies polluting their waters seriously.

By the way, there's another old friend from the BP catastrophe involved. Barrett and Millard report on an interview with federal prosecutor Oliveira:

Without prompting, the prosecutor announces what seems like big news: He plans to add another major u.s. company as a defendant in his multibillion dollar suit. Halliburton, the oil services company, he claims, failed to use sufficient steel piping and cement in doing what's known as completion work on the well that leaked. Asked about this allegation, a Chevron spokesman says it's incorrect. While Halliburton did help finalize construction of other wells at Frade, the well was plugged before Halliburton's services were needed, according to Chevron. A Halliburton spokeswoman likewise says the company wasn't involved in the completion work at the well. Queried the next day, Oliveira says he saw Halliburton'S name in a police investigative report on the Frade accident. He is continuing to study the contractor's exact role. His shoot-from-the-hip style, however, leaves Oliveira'S intentions toward Halliburton unclear.
This makes me think of a folk song I heard several years ago that had to do with corporate and government corruption. One of its lines was, "Halliburton, Halliburton, Halliburton, what else do I have to say?"

The Brazilian government certainly reacted very differently than the supposedly liberal Obama Administration acted in regard to the far more serious BP spill of 2010:

"Chevron and Transocean have caused a contamination bomb with a prolonged effect," Oliveira said, as he filed charges against the 17.An outspoken career prosecutor who under Brazilian law enjoys tenure in his influential civil service position, he alleged "crimes against the environment"-namely, that the defendants knew they were drilling in a high-pressure reservoir, recklessly proceeded anyway, and caused severe ecological harm. Oliveirahas said that if convicted, the defendants could face prison terms as long as 20 or 30 years.
To be clear, I don't have any strong opinion about the validity of the Brazilian prosecutor's particular approach. What is striking is that the Brazilian government does seem to be taking this far more seriously than the Obama Administration did the BP spill. And the framing of the story says a lot about Bloomberg Businessweek's editorial slant, which obviously isn't entirely separate from their reporting of the news.

And that cover is embarrassingly obnoxious. The pre-Bloomberg Business Week didn't use that kind of silly imagery that I recall.

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