On Friday October 7th, the US Department of Labor (DoL) issued an order to ExxonMobil to reinstate two scientists who the DoL believe had been fired on the suspicion that they had leaked information to the media about potentially fraudulent production projections by the company.
The ruling is a cautionary tale for this country which is dependent on ExxonMobil for production and other information, has the weakest of regulatory institutions, exudes a proclivity to put political considerations above national interests and where both this government and the previous one have placed the oil company on a pedestal.
ExxonMobil has denied the main contentions which led to the dismissals of the two scientists and has said it will appeal the DoL ruling. The case prosecuted by the DoL’s Occupational Safety and Health Administration (OSHA) revolved around two experienced scientists Damian Burch and Lindsey Gulden. According to a report in the Washington Post when the company announced unexpectedly rosy targets for pumping oil out of Texas and New Mexico in the spring of 2019, the news sparked confusion for the two scientists. They began to suspect that management planned to ascribe what they saw as a potentially fraudulent forecast to them.
Mr Burch and Ms Gulden eventually complained to ExxonMobil’s human resources investigators that Mr Burch’s team was pressured to fiddle with data to make it look like the company was poised to generate billions of dollars more in oil than it was, the Washington Post reported, according to interviews and the findings of the Labor Department investigation. Nothing emanated from this complaint and when the company finally acted it dismissed both Mr Burch and Ms Gulden.
OSHA said that the company claimed that it terminated one of the scientists for mishandling proprietary company information and the second for having a “negative attitude,” looking for other jobs, and losing the confidence of company management.
OSHA said that it learned that ExxonMobil knew that one of the scientists was a relative of a source quoted in a Wall Street Journal article on the production projections and had access to the leaked information. The OSHA investigation ruled that the communication with the newspaper, related to alleged company violations, is protected activity under the Sarbanes-Oxley Act. This ground-breaking 2002 Act is intended to protect investors by improving the accuracy and reliability of corporate disclosures made according to the securities laws and came as a reaction to a number of major corporate and accounting scandals in the US, including those of Enron and WorldCom.
OSHA said that the Act also protects the scientists despite ExxonMobil’s belief that they had access and possibly leaked information to the publication. Neither was revealed as a source for the article.
“ExxonMobil’s actions are unacceptable. The integrity of the U.S. financial system relies on companies to report their financial condition and assets accurately,” said Assistant Secretary for Occupational Safety and Health Doug Parker in the DoL ruling.
ExxonMobil, the DoL’s report said, “has failed to provide clear and convincing evidence” that the scientists were fired for reasons other than talking to journalists and blowing the whistle.
While it says it is appealing the OSHA decision, the Washington Post said that ExxonMobil’s conduct in this case is likely to come under review by the US Securities and Exchange Commission and by the US House of Representatives at a time when the company is also facing a series of climate change-related lawsuits by states and cities.
At the very least, the OSHA ruling should shake the PPP/C government out of its stupor on two counts. ExxonMobil cannot be taken at its word. It needs the most intense examination particularly of its activities offshore. With each new well discovery, ExxonMobil has ululated about the oil equivalent reserves and the prospects for the positioning of more petroleum extracting platforms. Guyana has taken these forecasts on trust and is on an accelerated path of extraction without adequate consideration of inter-generational equity and climate change consequences. Georgetown must employ a reasonable amount of oil earnings for an independent evaluation of all of the claims being made by ExxonMobil about reserves and daily production. Even more important is to examine and test the company’s adherence to internationally recognised safety standards and the measures it is taking to minimise the risk of any fuel spills or worse offshore. An investigation was supposedly being undertaken by our Environmental Protection Agency (EPA) of the reported spill of one barrel of oil at sea. The public awaits the findings and would be curious to know what facilities were at the disposal of EPA to enable it to conduct this probe. Surely with oil proceeds Guyana should have independent capacity to venture out to the platforms and to conduct its own investigations without having to rely on Exxon.
Second, the government here should take notice of the seriousness with which the US treats whistle blowing. Two scientists have been ordered reinstated and damages awarded. This government and its predecessor have conveniently and unsurprisingly paid lip service to this pivotal instrument of modern governance. While the APNU+AFC administration passed the Protected Disclosures Act it did not activate it. More than 26 months in office, the PPP/C government has signalled its disinterest in the Act as evidenced by its refusal to provide witness protection in the Bascom case. Whistle-blowing legislation is an important cog in the wheel of good governance and can help to cauterise the instances of serious corruption that continue to occur here. Deep in the Atlantic Ocean, those employed on ExxonMobil’s two oil platforms – and those to be positioned on the two others that have already been approved – can be important witnesses were anything to go wrong. They must however have the cover of an activated Protected Disclosures Act.
This December will mark three years since ExxonMobil has been pumping oil from the Atlantic while having flared large quantities of gas and the regulatory Petroleum Commission is shockingly still not in place. The government has had enough time to dawdle. The country’s interest demands the immediate setting up of this Commission with experts of regional and international repute.
