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By Michelle Kinman,
(Former) Deputy Director of Crude Accountability
August 19, 2010
First published on the Global Exchange Chevron Program Blog
Earlier this week, the President of Turkmenistan announced a short list of companies from whom his country will accept proposals to develop two offshore blocks in the Caspian Sea.1 Since President Gurbanguly Berdymukhammedov came to power nearly four years ago, Turkmenistan’s vast hydrocarbon reserves have been the source of intense lobbying by petroleum giants from around the globe. The efforts of four of these companies were rewarded, in part, this week. Not unexpectedly, Chevron is among the shortlisted companies, joined by ConocoPhilips, Abu Dhabi’s Mubadala Development Co. and newcomer TX Oil Limited, chaired by Neil Bush, son of US President George H.W. Bush.
Turkmenistan is one of the world’s most closed and repressive countries. A small nation of approximately 5 million people, it is located in Central Asia and is bordered by the Caspian Sea to the west, Iran and Afghanistan to the south, Uzbekistan to the east, and Kazakhstan to the north. Identified by Freedom House as one of the World’s Most Repressive Regimes in 2009 (and almost every year prior), Turkmenistan is a country with no freedom of the press, an authoritarian government, and a President who is quickly building a cult of personality rivaling that of the previous “President for Life,” Niyazov, who died suddenly of a heart attack in December 2006.2 Civil society has been all but destroyed by the repressive policies of the government of Turkmenistan.
Further alarming is the fact that Turkmenistan’s government has no accountability mechanisms for reporting oil and gas revenues. The country’s previous president deposited petroleum funds in a semi-private, off budget account in Deutsche Bank in Frankfurt.3 President Berdymukhammedov has made no reforms in this area, and a newly touted “Stabilization Fund,” into which oil and gas revenues would be placed, remains a mystery as there is no public documentation that such a fund actually exists.4
As we have seen repeatedly in neighboring Kazakhstan, where Chevron is the largest private oil producer, and elsewhere around the world, engaging with corrupt and opaque regimes to secure hydrocarbons without first insisting on significant improvements in transparency, rule of law and human rights leads to unjust and unsustainable policies and practices.5
When I raised this issue at Chevron’s Annual Shareholder Meeting this past May, CEO John Watson confirmed that his company was in negotiations with the government of Turkmenistan, adding “I think we can do some good in Turkmenistan” even though “we may not meet your standards”.6 Perhaps I had not been clear about my concerns, for at stake are not the standards of any single individual, nonprofit organization or even corporation. At stake are the standards and best practices enshrined in national and international laws and regulations. These are the standards that Chevron is obligated to meet, and encouraged to exceed. These are the standards by which Chevron’s shareholders, the international community and the citizens of the Chevron’s host countries evaluate whether or not the company is “doing some good”.
As Chevron has yet to finalize a contract with Turkmenistan, we have a unique, but waning opportunity to urge the company to insist upon significant improvements in human rights and rule of law prior to active operations in the country. For more on how you can get involved at this critical moment, please visit www.crudeaccountability.org.