Marathon Petroleum – Community Impacts (2020)
Marathon Petroleum states that “the well-being of our employees, contractors and neighboring communities is our highest priority…[and] minimizing our environmental impact is a serious priority.”
Marathon has one of the largest inventory of toxic hydrogen fluoride among US refiners subjecting the company to myriad risks. According to the EPA, Marathon’s Garyville, Louisiana facility handles 445 tons on site – the most hydrogen fluoride of any of the 48 U.S. refineries reporting inventories. Its Texas City, Texas facility reported storing 180 tons to the EPA.
In June 2019, an explosion of hydrogen fluoride at a Philadelphia oil refinery, which stores less than one half the amount stored at Marathon’s Garyville plant, injured workers, drew national attention, disrupted the community, and sent gasoline prices upward revealing the deadly harm and risks this chemical can cause – especially for neighboring communities.
However, safer alternatives exist. For example, some refineries are using safer catalysts such as advanced sulfuric acid and ionic liquids that have a dramatically lower risk of contributing to an explosion that would threaten surrounding communities.
At the same time, Marathon’s inability to attend to the community concerns of its Detroit neighbors has led to considerable negative press attention and a local congressional hearing on pollution. At a September 2019 hearing, US Representative Tlaib called into question Marathon’s commitment to community well-being after citing recent vapor leaks that sent workers to hospitals. She drew public attention to 13 documented violations of air permits and the Clean Air Act over six years at Marathon’s Detroit refinery. These releases reportedly sent cancer causing toxic chemicals into nearby neighborhoods.
In 2019, Marathon’s CEO signed the Business Roundtable’s statement on the purpose of the corporation joining 180 CEOs who publicly commit to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities, and shareholders. Implementing this commitment will require Marathon to include a broader set of stakeholders into its decision making. We believe that in order to deliver value to communities where it operates Marathon will need mechanisms that better align its community impact and executive compensation incentives.
For example, Newfield Exploration’s incentive plan now includes community engagement among other more common metrics such as environment and safety factors.
Resolved: shareholders request the Board’s Compensation Committee publish a report (at reasonable expense, within a reasonable time, and omitting confidential or propriety information) assessing the feasibility of integrating community stakeholder concerns and impacts into Marathon’s executive compensation program which it describes in its annual proxy materials.
Supporting Statement: According to pages 30-34 of Company’s 2018 proxy materials, the Annual Cash Bonus program includes internal safety and environmental performance metrics. While these are necessary and positive, community stakeholder concerns and impacts are a distinct and vitally important issue for Marathon and should be included, as we believe it would incentivize leadership to improve community relations and impact, reduce risk, enhance financial performance, and increase accountability.