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Newsbreak’s special report on the latest CSR flunkee

September 12, 2006

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By Dennis D. Estopace
(Newsbreak, September 25, 2006, Pages 20 and 21)

WHILE PETRON Corp. is known for its much-publicized advocacy of corporate social responsibility (CSR), the way its executives initially navigated the recent oil spill accident near Guimaras has become another case study of how companies don’t usually walk the talk.

During the stormy afternoon of Aug. 11, 2006, an overloaded Solar 1 marine tanker chartered by Petron to transport 2.4 million liters of bunker fuel sank a few kilometers southwest of Guimaras, an island province. Reports reaching the Senate said that an initial 200,000 liters leaked from the sunken tanker and have “so far affected some 300 kilometers (187 miles) of coastline, 500 hectares (1,235 acres) of mangroves and 60 hectares (148 acres) of seaweed plantations, and at least 26,000 villagers in Guimaras.”

A day after the news of the oil spill broke, several employees from Petron Foundation flew to the area giving out canned goods, rice, and bottled water to 9,153 families. More employees were eventually mobilized to assist in the clearing of the oil spill, which, as of August 28, reached 123 metric tons of oil from an estimated 94.48 kilometers of seawater. Petron Corp. hired 869 people from the affected communities to help in the clearing for P200 a day. These residents had limited work options, anyway, since they couldn’t catch and sell the fish from their usual fishing grounds.

While Petron volunteers were on the ground, however, executives in Manila were taking a different tack. For days, company executives were quiet even as the public watched daily on TV images of human sufferring in Guimaras. Environmentalists, too, swarmed the area, and local officials implored Petron to be accountable. Several groups even e-mailed petitions calling on consumers to boycott Petron products.

Petron officials explained that the cargo was theirs, but the ship that continued to spill the deadly oil from 900 meters below sea level was not. In its disclosure to the Philippine Stock Exchange, the publicly listed company said, “Petron is not under any legal or contractual obligation to set aside 10 billion pesos in economic aid or to post a 100-million bond to pay for cleanup as under pertinent Philippine Coast Guard circulars, it is the spiller who is primarily responsible for conducting cleanup operations with the supervision of the Coast Guard.”

The pressure on Petron to act according to the public’s expectation could be measured against its declared adherence to CSR practices, according to Asian Institute of Management professor Felipe Alfonso. The accident certainly doesn’t call for being “legalistic.” Alfonso adds that there are other situations that call less for shoring up against future litigation than immediately accepting responsibility. He explains that the true essence of being a CSR advocate is to go beyond legal requirements and respond to social needs, whether immediate or otherwise. (Related story below)

(For the full story, click Newsbreak. Shameless plug: Latest issue of this great magazine is available at your nearest bookstore or newstand.)

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