Petronas is world’s least transparent

Malaysiakini.com – 14 March 2006
National oil company Petronas is ranked last in the latest survey of the ‘World’s Most Sustainable and Ethical Companies’ conducted among 15 major oil companies by a Spanish-based ethics rating firm. 

The annual survey, inaugurated three years ago by Management & Excellence (M&E), evaluates and compares the compliance of each company with over 280 internationally recognised standards in transparency, corporate governance, social responsibility and ethics. 

This ranking, released last month, had Shell at the top for the third year running, followed by British Petroleum (BP) and Brazil’s Petrobras shooting into third spot.
Petronas, which was included for the first time, obtained the lowest score at 20.15 percent. 

“No oil company studied was as transparent as Shell, publishing 13 separate reports on topics ranging from environmental impact to animal testing,” said M&E. 

“Caught in a scandal two years ago for misrepresenting its oil reserves, Shell now publishes a 40-page report on how its reserves calculations comply with international guidelines.” 

According to the survey, Shell improved from 82 percent previously to 89 percent. M&E said the company supports 12 codes of human rights and its board had met a record 29 times in 2004, compared with eight at BP. 

“It also offers grievance channels for employees in over 50 countries and is implementing 120 bio-diversity projects worldwide.” 

Petronas’ secrets 

Petrobras moved up from 7th placing in 2005 to third, while ExxonMobil, second in the 2005 ranking, dropped to 9th place, owing to gaps in reporting. 

M&E said ExxonMobil gives little information on its employee performance measurement system and supplier management. 

Petrobras scored high in social responsibility by investing heavily in environmental projects and launching its ‘zero hunger’ project which turns gas stations into schools for training young people. 

M&E, one of the first agencies to research and rate oil companies in sustainability and ethical areas, said some companies are improving their transparency. 

“Russia’s Lukoil managed to raise its total score by 23 percentage points from 35 percent to 58.61 percent, or a jump of 67 percent. 

“Last September, Lukoil released its first sustainability report, which more than doubled its transparency score from 29 percent to 62 percent.” 

Petronas has been criticised by many Malaysians for not opening its accounts for inspection and for using its money to fund government’s mega-projects as well as bailing out ailing politically-connected companies.
Calls for greater transparency in state-owned Petronas gather steam after the government made the unpopular decision to hike fuel prices by about 20 percent early this month.
Source: Malaysiakini.com | www.malaysiakini.com