Examination of Witness (Questions 507
- 519)
TUESDAY 20 OCTOBER 1998
MR ROBERT
DAVIES and DR
CHRIS GIBSON-SMITH
Mr Canavan
507. Thank you for coming to give evidence
to our inquiry. Apologies for the absence of our normal chairperson,
Mr Bowen Wells, who is abroad, and apologies for keeping you waiting.
I understand that Mr Davies would like to make an opening statement.
We have until about one o'clock and would be grateful if you could
keep the statement as brief as possible to allow myself and my
colleagues to put questions to you afterwards, and also to Dr
Gibson-Smith.
(Mr Davies) Very briefly, Chairman, first of all,
I am glad of the invitation to give evidence to the Committee.
If I could just explain who we are. I am Chief Executive of The
Prince of Wales Business Leaders Forum and I am joined by Dr Chris
Gibson-Smith, Managing Director (Policies and Regions), British
Petroleum. I would say that BP is one of our corporate members
and plays a very active part in the activities of the Forum. I
can provide an overview of some of the issues, and I know Dr Gibson-Smith
can share with the Committee experiences of some of the dilemmas
from the perspective of a company which, as I think you know,
is very much in the centre of some of these issues. If I could
just say one or two things by way of introduction. One is, clearly
business is not a stranger to conflict; conflict and business
seem to have gone together ever since there was international
trade; but the role business can play in conflict prevention and
post-conflict reconstruction I think is something which is a much
newer idea. Reflecting on some of the evidence being presented
to the Committee and also looking at the comments of the DFID
and reading the Carnegie Commission, there is a feeling it is
time to explore much more constructively the role business plays
in that dimension. I would also say our starting point as an organisation
is that in a global economy the licence to operate brings business
responsibilities, and business must play a part in conflict prevention
and post-conflict reconstruction. That is very much central to
the role of our organisation. I would also just like to reinforce
one point we made in our memorandum[9]
and that is, we do not claim any in-depth expertise in the subject.
We are working in some 30 developing and transition economies;
we are working with not just British but other international business;
we are working mainly with international companies rather than
the smaller local ones. We believe our understanding of the role
is developing just as many of the companies we are working with
and, indeed, also the public sector organisations. Finally, could
I just say about us as a Forum, we are not a representative body
or a standard setting body; our role is to work with international
business to promote continuous improvement in business practices;
and also to promote partnerships so business can work with the
public sector and the NGO community in contributing to development
issues. In this respect, I would say we are working very closely
with a range of non-governmental organisations, including Amnesty
International Business Group, International Alert, Oxfam, Council
for Economic Priorities, Ethical Trading Initiative and so forth.
I would say a critical part of business addressing this subject
is that partnership with those organisations. We are also working
with a range of inter-governmental organisations. Now we work
with some 20 UN organisations and agencies as well as the World
Bank. We also work with the Department for International Development
in this. Our role in this is to promote and build capacity for
partnership working. I will conclude my opening statement at that
point.
508. Thank you very much. Dr Gibson- Smith,
I wonder if in your opening remarks you could make specific reference
to DG's involvement in Colombia because it has received publicity
recently, notably in last Saturday's Guardian.[10]
Very serious allegations were made indeed to the effect that BP
were involved in a consortium which bought and supplied military
equipment to a Colombian army brigade which was implicated in
the massacre of civilians. Is there any truth in these allegations?
How do you respond to them?
(Dr Gibson-Smith) None whatsoever. Let me come
back to it in a minute and deal with it, otherwise it will get
in the way. First, it is very interesting, listening to you talk
and debate, to find your interests actually deeply parallel with
our own. My role in our company is to have Board responsibility
for our standards and policies for all activities worldwide with
social/environmental implications. I am in the middle of all of
this, and as part of that we work with the Prince of Wales Business
Leaders Forum. We also work with the World Bank, the UN, a wide
range of NGOs, as well as DFID and the FCO. The Guardian article
is one of a series produced by a single journalist who has been
behind each of the television articles and each of The Guardian
articles—the same person each time. It is wrong and misrepresentative,
in fact, and in innuendo. It is a fact that Colombia is a desperately
violent place. The Human Rights Watch report last week War
Without Quarter is, in our view, a first rate description
of what it is like on the ground. If you read that you get a real
sense of the social turmoil there. If I can just illustrate it
by taking the headline "BP Sacks security chief", in
fact the incident refers to something 18 months ago. We were building
a pipeline through the most guerilla-infested area of Colombia
and a field security contractor was looking at options. Among
the options he looked at, offered by an Israeli contractor, were
military attack helicopters and other things. The moment our management
saw what he was doing they asked for his removal and he was removed.
The reality of the situation is, this happened 18 months ago,
he was examining options for us, he was a junior level field representative,
the moment it was brought to management they asked for his transfer
and it happened. The article in its entirety reflects that sort
of translation of fact into innuendo. We have always denied guerrillas
payment or access, and that is part of our problem. We have never
dealt with paramilitaries. We do rely on the police and army for
support and intend to continue doing so. Because of the human
rights record of the army, along with paramilitaries and guerrillas,
then it is a constant source of irritation that we find ourselves
slurred. We are systematically upgrading the way in which we manage
this to try and both raise the educational standards of the army—they
now receive human rights education from the International Red
Cross—and to ensure that no information that we have could
ever be misused by them against the civilian population.
509. The security chief, Mr Roger Brown,
I understand BP admitted he made some error of judgment. What
would that error of judgment have been?
(Dr Gibson-Smith) I am sorry, I thought I had
just made that plain. He was looking at options that we deemed
inappropriate. We, in writing our own files, said, "This
is an exercise in error of judgment", and we had him transferred.
Tess Kingham
510. Transferred to where, or did you sack
him?
(Dr Gibson-Smith) We do not employ him.
511. What does "transfer" mean
then?
(Dr Gibson-Smith) He went off to work in Venezuela.
512. For you or for somebody else?
(Dr Gibson-Smith) For someone else at the time.
He is working for us again. Within the system he was investigating
options, some of which were just plain out of bounds. Per se
he did nothing as an act and had no authority to take an action,
had no money to spend and could not do so.
513. Do you not think that is quite a dodgy
character for you to be employing?
(Dr Gibson-Smith) He is, interestingly, the most
un-dodgy character, but really appears to have made some serious
errors of judgment.
Mr Canavan
514. You say you have taken him back into
employment?
(Dr Gibson-Smith) He still works for us, yes.
515. Despite this serious error of judgment?
(Dr Gibson-Smith) It is part of the learning process.
Within operational controls he had no mandate to take action or
make decisions, and he did not. He was researching options. He
never could have enacted them. We deemed he ought to have learnt
significantly from that and would be extraordinarily unlikely
ever to make such an error again.
Mr Khabra
516. In your opening statement you said
that business has not taken you to conflicts. A company like BP
has been in business for more than 50 years working in various
countries used to the kind of culture, believing the status
quo, co-operating with regimes whatever the nature of the
character. Would you not find it very difficult for the company
itself, the business, to adapt to a new culture, new situation,
new commands, and how long would it take you to learn from the
new experience?
(Dr Gibson-Smith) I think there are two forms
of adaption in relation to conflict: there is the particular form
it takes in each culture, and it is different—so violence
in Colombia is different from violence in Angola; and then there
is the fact that we as people are so extraordinarily ill-prepared
as a function of the society we have grown up to begin to understand
the extremes to which it can go and the depths of perversion it
is possible for human beings to engage in. If you can imagine
an engineer trained in Edinburgh being sent to Angola, the amount
of training and education you have to give them in order to help
them deal with these situations is enormous.
(Mr Davies) Could I add to that, Chairman. I think
also, as an observation, business (particularly international
business) is operating in a world where there are now much higher
expectations that they take a lead on societal issues. I think
it would be right to observe that a key part of that is therefore
engaging in partnerships with the NGO sector and the public sector
in many countries whose whole economies and political regimes
have changed very significantly in the last eight or nine years.
There is a very significant learning process going on in which
NGOs and inter-governmental organisations are also engaged in
trying to see where business now fits into a new pattern where
previously the state was very much expected to do things, or was
expected very much to be in the public policy preserve. It is
this changing situation of actors which is resulting in many different
types of companies, not just natural resource companies but also
retail companies sourcing from the developing world, exploring
new ways of engagement. That is really quite significantly different.
In other words, the increase of public interest, the ability of
public organisations and NGOs to research and transmit findings
really quite quickly, and also the interest in engaging in business
in a world where, to some extent, the state has withdrawn and
new areas have opened up where business is a major player, this
is a new dynamic in which relationships are being worked out.
Ms Follett
517. Dr Gibson-Smith, could you tell us
what is BP's stake in the Ocensa consortium and what profit does
BP make from its operations in Colombia?
(Dr Gibson-Smith) We take 15 per cent. The Government
takes 85 per cent. of all revenues generated from Colombia. I
cannot quote what our profit figures are out there at the moment.
518. Could you also tell us what the relationship
between BP and Ocensa's security operations is?
(Dr Gibson-Smith) The primary holder in Ocensa
is the state national oil company. It holds 50 per cent of Ocensa,
we hold 15. Ocensa is independently managed but clearly we have
close links in an operational sense because they are transporting
the oil that we produce.
519. I accept that what appeared in last
Saturday's Guardian might not be what actually happened
but could you say what you believe is the truth of the allegations
in last Saturday's Guardian that Ocensa bought and supplied
military equipment to a Columbian army brigade implicated in massacres
of civilians?
(Dr Gibson-Smith) The short answer is actually
night vision goggles were supplied to the brigade because the
pipelines get attacked at night and the brigade did not have any
way of seeing the attackers. The relationship with the army and
the police in Colombia is not developed to the same standard you
find in this country and so in order not to divert broad taxpayer's
funds into what could be seen as state or specialist interests
they require us to pay extra taxation to cover the cost of security.
At the time that allowed the provision of goods and services.
Since that time we have changed it, we now make no direct payments.
We have got the Colombian Government to relegislate and we pay
the state oil company which transfers the tax through to the other
state entity so that there can be no possibility of any closeness
of relationship between us and the army.
9 See Evidence, pp. 209-213. Back
10
BP hands tarred in pipeline dirty war, The Guardian, 17
October 1998. Back
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