Exxon & Valdez Then and Now(Archive)
I became involuntarily “involved” with Exxon in September of 1989 when the environmental coalition I Co-Chaired (CERES) named its ten environmental management principles after Exxon’s tanker. The company, needless to say, was not pleased. The infamous Valdez spill took place on March 24, 1989. The grounding of the Exxon Valdez on Bligh Reef in Prince William Sound, Alaska, resulted in the release of 258,000 barrels of Alaska North Slope crude oil into the marine environment.
ExxonMobil is now stronger than ever, and obviously neither apologetic about nor wiser for the experience of 1989. The company’s web site brags, “Exxon Mobil Corporation is the world’s premier petroleum and petrochemical company. It is managed to enhance long-term shareholder value and benefits from a highly talented workforce and superior technology.”
Final restitution numbers were tiny compared to the real damage to the environment and people around the spill. They were minuscule compared to ExxonMobil’s profits. In the past (trailing) twelve months ending August 30, Exxon’s net earnings were $18.2 billion. The settlement for the criminal and civil charges and restitution total about $1.125 billion, not including $125 million forgiven by the courts because of their cooperation with the cleanup, according to the site maintained by the State of Alaska. The amount paid so far to Alaska and its people was only 6% of one year’s net after tax earnings! The CEO of ExxonMobil, Lee Raymond, received $41.7 million in salary, bonuses and exercised stock options for the fiscal year ending December 31, 2000. All by himself, before taxes, Mr. Raymond took home 3.7% of the total criminal and civil settlement. It must have been a happy holiday, indeed.
The Alaska web site states, “On a more personal level, it is clear that many people associated with the spill region have not been able to put the trauma behind them. Reasons for this continuing stress vary, but it is widely accepted that one major obstacle to recovery has been the protracted class action lawsuit brought against Exxon. In 1994, a jury awarded the plaintiffs $5 billion in punitive damages as well as $287 million for compensatory damages. Nearly five years later, this jury award remains on appeal.” By contrast, shareholders of the company are collectively receiving $6.32 billion in dividends per year.
Back in 1990, I traveled to Alaska on the anniversary of the spill for a conference on environmental management. Exxon was represented at the conference, and had already prepared a slick video about the Valdez cleanup that was aired on a boat tour of Prince William Sound. The boat moved slowly beside glaciers creaking and slamming into the water (a process called “calving”) at the foot of mountains too spectacular to describe in a short article. The Exxon public relations representative bragged about rescuing birds and attempted to quantify the company’s expenditure per oily body. One burly executive from Alaska Audubon watched the film with tears running down his cheeks.
Over ten years later, environmental and human rights activists continue to try to crack the arrogant veneer of ExxonMobil’s management. But the stock of the company has done very well, and many of the shareholders are pleased. The connection between short-term performance and the inexorable erosion of our natural environment or social well being remains elusive.