The Great Debate

A truly bizarre international incident has gone largely unnoticed, even though it is one of the most shameless shakedowns of an American company by another country in recent memory. What is happening now in Brazil could easily scare off U.S. companies that may be looking to do business overseas.

What happened was that a small amount of oil seeped from cracks in the ocean floor near an oil well that was operated by Chevron off Brazil’s coast. This oil seep occurred some 200 miles offshore, was successfully stopped in four days, has been fully contained, and caused no harm to the environment, wildlife or human health. The amount of oil that leaked from the cracks in the ocean floor was less than 0.1 percent the size of the BP spill in the Gulf of Mexico.

Instead of sitting down with Chevron in candid talks to find preventive measures against future incidents, discuss reasonable reparations and additional cleanup, Brazil’s prosecutors went after Chevron like a rabid hound lunging after a hotdog.

After oil bubbled up from the ocean floor, Brazil’s prosecutors issued indictments seeking criminal charges, actual jail time for several company executives and fines large enough to fuel the economies of most Central American nations. Even more egregious is the fact that in 2010 Brazil’s own state-run oil company, Petrobras, spilled almost double the amount Chevron did in this incident and no one from Brazil’s oil company is facing charges or jail time.

When President Obama visited Brazil late last year, he promoted the partnership between America and the South American nation, saying: “We want to work with you. We want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers.”

On Feb. 28, the U.S. Supreme Court will hear arguments in Kiobel v. Royal Dutch Petroleum. The case is about Shell’s alleged complicity in torture and extrajudicial killings committed by the Nigerian military in the mid-1990s, and is expected to determine whether corporations can be sued in the U.S. for their involvement in human rights abuses abroad.

Corporate lawyers and plaintiffs’ attorneys alike are eagerly awaiting the outcome. If the Supreme Court upholds corporate liability, as federal courts have in the past and the Obama administration is encouraging the High Court to do, other lawsuits will surely follow — against Apple for labor abuses in its Chinese manufacturing base, for example.

But we should not let this case distract us from the fact that lawsuits should be a last resort for people hurt by business. Suing a company is expensive, complicated, and time-consuming, and it rarely makes victims whole. In 2009, after three years of litigation, Shell settled a related case for $15.5 million — to be divided among 10 plaintiffs, their lawyers, and a fund for education and other initiatives in the plaintiffs’ communities. Hardly an ideal outcome where lives have been lost.

– Jay R. Pryor is vice president of business development for Chevron. The views expressed are his own. —

The concept of a “green recovery” is a compelling topic of discussion at the World Economic Forum this week in Dailan, China. It stems from the United Nations Environment Program calling for investment of 1% of global GDP (nearly $750 billion) to promote a sustainable economic recovery.

A “green recovery” speaks to two of the most important issues of our time –- the efficient use of energy and the realistic understanding of energy’s role in the global economy. It’s a role that can help lift millions of people out of poverty, while addressing a healthier environment.