ExxonMobil Stockholders Face a Profound Choice
By Kevin Young and Nick Mottern – ConsumersforPeace.org
It might be hard to imagine that a routine stockholders meeting could have profound global implications, but that will be precisely the case when ExxonMobil shareholders gather in Dallas, Texas, for their annual meeting at the end of May.
As the owners of the world’s largest privately-held oil company, the ExxonMobil shareholders have the opportunity to consider a simple question that can affect the lives of millions: Will ExxonMobil continue in its drive to harvest oil from an occupied Iraq, or will it stop until the occupation is ended?
ExxonMobil, along with other oil majors, has been planning and lobbying to begin major production in Iraq since at least 2000, well before the 2003 invasion and occupation. But opening these big oil operations will almost certainly come at the high price of further inflaming the Iraq War, with all the human devastation this would cause. Moreover, shareholders must realize that the war is causing serious economic harm to American consumers and businesses alike.
Shareholders can take a simple but very significant action by telling ExxonMobil management to 1) refrain from making any deals with the Iraqi government until all US forces are withdrawn from Iraq, and 2) support a full, unconditional, and immediate withdrawal of all US forces from Iraq.
These policy positions derive from both economic and moral concerns. From an economic standpoint, the occupation of Iraq has sent the US spiraling into debt and is devastating both consumers and businesses in this country. Consider the following facts:
- The Iraq War is responsible for about 12 percent of the current price of gasoline in the US, according to economist Dean Baker of the Center for Economic and Policy Studies.
- Congress’s Joint Economic Committee has estimated that “oil price increases from 2003-2008 due to the Iraq War reduced total U.S. income Gross Domestic Product by a total of approximately $274 billion.” That was before oil hit $120/barrel.
- In the US and around the world, the oil price hike is raising prices of food and other basic human needs, in some places causing food riots.
- As Dean Baker noted in May 2007, “military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment.”
- University of Massachusetts economist Robert Pollin and researcher Heidi Garrett-Peltier, writing in March 2008, point out the potential benefits that reducing military spending in favor of social spending would have for the US economy:
Every $1 billion spent on a combination of education, healthcare, energy conservation and infrastructure investments creates between 50 and 100 percent more jobs than the same money going to Iraq. Taking the 2007 Iraq budget of $138 billion, this means that upward of 1 million jobs were lost because the Bush Administration chose the Iraq sinkhole over public investment.
The moral issue is even more stark. While over 4,350 US and Coalition soldiers have died in Iraq, the occupation has nearly obliterated Iraqi society, with at least one million Iraqis dead and over eight million displaced and/or facing a humanitarian crisis. Iraqis overwhelmingly oppose the continued occupation of their country, including the proposed oil law that the US is promoting in Iraq. This law would substantially reduce the control of the Iraqi people over their own oil and, since it is opposed by at least two-thirds of Iraqis, would greatly increase the resentment of Iraqis and other Middle Eastern peoples toward the United States.
Iraqis have consistently stated in polls that the US presence is causing more violence than it is preventing, even in recent months as politicians and the press have touted the alleged success of the “surge.” Polls in the US have shown that around two-thirds of Americans want our troops home, and a February 2006 poll found that 72 percent of US soldiers thought the US should leave Iraq by January 2007. In short, Iraqis and Americans are in agreement that the US should withdraw from Iraq in the very near future.
ExxonMobil shareholders can support this public chorus, and help ExxonMobil earn credibility, by disengaging the company from occupied Iraq. This will not mean ExxonMobil can never operate in Iraq or that the US will never get oil from Iraq. On the contrary, it might mean that the company will be able to operate there on a healthy basis once an independent government is formed.
The negative consequences of staying in Iraq, and of forcing unpopular oil agreements on Iraqis, are immeasurable. To more fully understand the explosive potential of the current situation, imagine for a moment Americans’ response if another nation invaded and occupied our country, killing and imprisoning our people and telling US politicians to sign over control of US resources to that foreign nation’s companies.
This explosive potential became especially apparent at the end of March 2008 when forces of the occupied Iraqi government attempted to assert control over Basra, Iraq’s oil shipment center. The failed assault is seen by analysts in Iraq and elsewhere as intended not only to wrest control of oil away from local militias and smugglers, but also to intimidate oil workers and create a safer place for investment by firms such as ExxonMobil. The Iraqi people have proven to be extremely resourceful and effective in resisting foreign intrusion for oil, first attempted by England after World War I, and continue to do so today.
Unfortunately, major oil companies like ExxonMobil continue to jockey for Iraqi oil and thereby exacerbate instability by angering the population. Along with the US government, companies like ExxonMobil are major sources of popular resentment in Iraq. “Our forces in Iraq and our threat to change Iran’s regime are making the region unstable,” said retired Lt. Gen. William E. Odom, testifying before the Senate Foreign Relations Committee in April 2008. General Odom advocates an end to the occupation as quickly as possible.
Yet despite the potential economic advantages of a US withdrawal for the US economy as a whole, ExxonMobil has nonetheless enjoyed record short-term profits as a result of the war. With the aid of the Center for Economic and Policy Research, we estimate ExxonMobil’s war-related profits to total about $39 billion over the five-year course of the war. ExxonMobil has also benefited from the war through $4.2 billion in Pentagon sales from FY 2003-2007. We have asked ExxonMobil to use this excess profit to aid Iraqi, American, and other coalition victims of the war, but we have received no response.
ExxonMobil shareholders face a choice of both economic and moral importance. First, will they do what is right for the US economy as a whole (and perhaps for ExxonMobil as well in the long term) or will they continue to support the Iraq occupation in hopes of increased short-term profits for their company? Second, many will ask themselves whether they want to make money off the suffering of millions of Iraqis and hundreds of thousands of American soldiers and their families.
Any involvement of ExxonMobil in Iraq would seem to be prohibited by its stated code of conduct with respect to human rights. We urge ExxonMobil shareholders to contact ExxonMobil management, asking them to desist from further activities in Iraq until the occupation ends and to pressure the US government to withdraw all forces from Iraq. Then, and only then, will Iraq and the United States get started on the path to economic and human recovery from the devastation this war has caused.
Rex Tillerson, Chair and CEO of ExxonMobil may be reached at:
Phone: (972) 444-1000
Email: Go to www.exxonmobil.com and click on “Contact”.
Address: ExxonMobil
5959 Las Colinas Boulevard
Irving, Texas 75039-2298
Consumers for Peace gathers information on Iraq oil issues and works with local organizers seeking to end the occupation of Iraq. It promotes the ExxonMobil, Shell, and BP War Boycott. The authors may be contacted through www.consumersforpeace.org
