Ethical Performance
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PetroChina allowed to remain in Compact club

October 2009

PetroChina has been absolved of complicity in human rights abuses in Sudan by the United Nations Global Compact after long consideration of complaints made by a host of non-governmental organizations.

Responding to a formal complaint lodged in January, the Compact board has said no action will be taken against PetroChina, a Compact participant since 2007.

It argues that because the Chinese oil company’s parent group, China National Petroleum Corporation (CNPC), ‘has been active in supporting sustainable development in [Sudan] and engaged in the newly formed and embryonic Global Compact local network’, it will not act on the complaint, which was supported by more than 80 civil society organizations and alleged ‘systematic and egregious abuse’ of the Compact’s principles.

The Compact board added that CNPC ‘had engaged in Global Compact learning and dialogue activities on conflict-sensitive business practices’. CNPC is not itself a Compact signatory.

PetroChina’s critics – who include human rights and corporate accountability groups from 25 countries – had accused the company of complicity in human rights abuses and requested that it use its influence with the Sudanese government to pursue peace-building in Darfur, where genocide has been ongoing for six years. The Compact board’s report, however, says: ‘The operation of a company in a weakly governed or repressive environment would not be sole grounds for removal.’

Eric Cohen, chairman of the US-based NGO Investors Against Genocide, said: ‘We hope the Compact will reconsider its ill-advised initial response and apply its integrity measures. It would be setting an extremely unfortunate precedent by declining to use its own documented process to preserve the integrity of its work in this extreme situation.’

Earlier this year, Shanghai-listed PetroChina became the largest company in the world by market capitalization, surpassing ExxonMobil. A number of investors have sold shares in the company over its activities in Sudan, including the Dutch pension fund PGGM and US-based Fidelity Investments

  A board member of the Global Compact has denied allegations of complicity in human rights abuses in Chile in the 1970s. Guillermo Carey, a senior partner at the Santiago-based law firm Carey and Allende Abogados, has been accused by a Chilean newspaper, La Nacion, of involvement in events that paved the way for General Pinochet’s coup in 1973.

Carey, who serves as a Global Compact board member for business, providing strategic advice, denies all  the allegations. He has been supported by a number of sources, including Chilean lawyer and parliamentary candidate Roberto Celedon Fernandez, who has praised Carey’s human rights work with indigenous peoples.

PetroChina | Africa | Human rights

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