Although it was 10 years ago today that the tanker Exxon Valdez crunched onto a reef in a pristine Alaskan sound, the ghost of America’s worst-ever oil pollution disaster still haunts its largest oil company.
Forty million litres of crude oil gushed from the ruptured hull, contaminating 2,000 kilometres of the coastline of Prince William Sound, killing hundreds of thousands of seabirds, fish, seals, otters and whales.
The clean-up, which continues today, has cost $US2.1 billion.
But it is the Exxon Corporation’s stubborn fight to avoid a gigantic compensation payout which continues to outrage environmentalists, and which may cost the company most. Although it was September 1994 when a jury awarded $US5 billion ($7.9 billion) in damages against the company, Exxon is still contesting the award in the courts. As a result, the greatest merger in global corporate history is in jeopardy. In December, Exxon – which had operating revenues last year of $US118 billion, larger than the economies of many countries – announced it planned to take over the country’s second largest oil major, Mobil.
If it gains regulatory approval, this would create the world’s largest company, a mega-corporation with 120,000 employees in more than 100 countries, and a stock market valuation of $US250 billion. But that’s a big “if”.
Regulators are concerned that the merger would be a step back by the US oil industry towards the freebooting monopoly it enjoyed before 1911, when John D. Rockefeller’s Standard Oil – one of the world’s first multinationals and the predecessor of both Exxon and Mobil – was broken up in America’s most famous anti-trust case.
Seizing advantage of this, environmentalists have asked Congress to stop, or at least delay, the merger until Exxon pays the $5 billion.
During the long-running legal battle, there has been yet another extraordinarily damaging court decision against Exxon. In 1996, a US Federal judge found that the company and its lawyers had been party to an “astonishing ruse” to try to manipulate the jury that awarded those damages.
Under a secret agreement before the case went to trial, Exxon agreed to pay seven Seattle seafood processors $70 million, on their undertaking to repay the company their 15 per cent share of any punitive damages awarded. In effect, Exxon was to get back $US745 million of its own $5 billion in the deal.
When this came to light, Judge H. Russell Holland of the US District Court in Anchorage, Alaska, said that Exxon had “acted like Jekyll and Hyde … behaving laudably in public and deplorably in private”.
Pub: Sydney Morning Herald
Pub date: Wednesday 24 March 1999
Section: News And Features
Sub section: Alaska – Features
Word count: 460
Classification: Company/Exxon Corp Nature/Environment/Pollution/Water Pollution/Oil Spills
Geographic area: Alaska
Caption: In hot water … 11,000 workers cleaned up after the Exxon Valdez.