Standard Chartered, Petron and CSR

March 29, 2007


REPORTS about the continuing woes bedeviling giant companies Standard Chartered Bank and Petron, among others, should give everybody pause.

Coming as they did in the wake of tales of malpractices and irresponsible behavior, in and out of the corporate world, these reports bring into focus the need to revisit the ways of these institutions, especially at this time when their influence, good or bad, extend to every nook and cranny of the world.

Which is why it is not enough for corporations to simply parade their so-called CSR credentials with using gimmicky bleeding-heart advocacies. Their day-to-day practices should be thoroughly examined as well the better to appreciate what in reality is the essence of their corporate existence.

One remembers, for example, that the giant Swiss food and beverage company, Nestlé, has been busily tooting its horns over donations to summer sports clinics and the like using Milo, Nestea and its other healthy beverage products as platforms. Nothing wrong with sponsoring these undertakings, mind you. But we should not be taken in by these kinds of initiatives.

Beneath this seemingly “good citizenship” veneer is the heart of steel that is Nestlé’s character. By far, based on its known practices and untold horror stories of its activities in the Philippines, Nestlé may yet be the best example yet of the stodgy, cold corporate giant preying on hapless consumers by spending tons of monies on legal and advertising operations, among others, which can only be described as distinctly antiworker and antipeople.

Nestlé, among all the giant companies with huge and extensive operations in the country, is known for its violent labor-relations history. As of last count, three of the last four presidents of the rank and file union were reported killed during the pendency or immediately after the end of CBA negotiations. In fact, the Nestlé unions have been the subject of management interventions for years.

Some quarters in the corporate circles claim that it bulldozes its own network of suppliers and distributors with all kinds of pressure, which have prompted them to bring the company to court. That is not to mention the suits brought against it by competitors for questionable practices. We are told that there is not a day in the courts, especially in Metro Manila and suburbs when a Nestlé case doesn’t get heard.

Anyway, Nestlé can be the subject of other, more intensive investigative reports, which we intend to pursue with other organizations many of whom have battled the giant company in other fronts for years on end,

Back to the Standard Chartered Bank and Petron cases: we are told that BSP investigators have been acting on the administrative complaint of a certain Manuel Baviera, the bank’s former HRD manager, has found sufficient evidence to charge three top bank executives of selling unregistered securities which is in violation of BSP rules.

Charged with unsafe and unsound banking practices were the bank’s former RP unit CEO, Paul Simon Morris (he has since been transferred to Indonesia), legal and compliance department head Marivel Gonzales and trust officer Ma. Ellen Victor.

The BSP investigators noted that the three have violated banking and securities laws by selling billions of dollar-denominated mutual funds to more than 1,000 investors, contrary to existing rules and regulations. Baviera was one of those investors and he claims that he was bilked of $8,000 in investments as a result of the bank’s wayward practices and negligence.

Of course, the bank denied having undertaken the things which Baviera claimed it did. There was even talk early on that Baviera was just trying to get even with the bank for a number of perceived slights and prejudicial practices insofar as his work as HRD manager was concerned.

But the fact that the BSP has recognized Baviera’s claims should put added pressure on the bank to come clean. That will now be the subject of hearings before the BSP’s Office of Special Investigations, which will most likely determine what kind of sanctions can be imposed on the three and even on the bank itself.

We await with bated breath the outcome of the hearing but this early we can almost see the hand of compromise and wrist-slapping coming into play. For if truth be told, the sale of global securities and similar products by other banks, especially units of the huge foreign banking groups has been going on in similar schemes all these years. In fact, the BSP was quick to point out that the Baviera revelation was nothing new; it has been going on for years.

And, get this, Baviera himself has been the beneficiary of similar operations in the past, which he apparently failed to question until the time he had a spat with Morris and company. Be that as it may it behooves the BSP and all concerned to monitor the hearings and see how this tale will eventually play out. It will have a big impact on the way we do business in this country for years.

As to Petron, well, we now know that the prosecutor’s office has issued its findings on the Guimaras oil spill to the effect that there is insufficient evidence to charge the giant oil company of neglect and related offenses as a result of this incident.

That is a big letdown, of course, especially for the people of Nueva Valencia which is the town most affected by the spill. We heard Mayor Gonzaga over radio two days ago decrying what he termed as a miscarriage of justice and vowing to fight for his townmates’ rights all the way. He noted that they will file a motion for reconsideration before the DOJ as a result.

But more than the expected compensation to the townspeople as a result of this litigation like in the Exxon Valdez case in Alaska, what is really troubling in Guimaras is the fact that Petron continues to hem and haw about its obligation.

What we would have expected the company to do was an Exxon putting up a trust fund for the long-term rehabilitation of Guimaras and the welfare of its people.

Instead, it has stopped even its own work-for-cash program and remains tentative about its long-term commitment to Nueva Valencia and the province.

That is really most unfortunate and, yes, irresponsible by any standard. We hope our friends in Petron will revisit their commitments to Guimaras and ensure that the same are done with the kind of intensity and care that the motoring and consuming public has given them and the other oil companies all these years. Dapat lang, di ba? (BusinessMirror, March 29, 2007)


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