Addressing Corporate Sovereigns As Foreign Policy Actors: A Conversation With Steve Coll On ExxonMobil’s “Private Empire”

Throughout the speaker series in the Mellon Sawyer Seminar on Corporations and International Law, the cohort has continuously questioned the implications that arise when corporations wield more power than governments. Through a conversation on November 7th with Pulitzer prize-winning journalist Steve Coll, this conversation continued with a particular focus on multinational corporations essentially adopting their own foreign policy.

In his book, Private Empire: ExxonMobil and American Power, Coll reveals how ExxonMobil’s continued growth and expansion overseas has allowed the corporation to assume a position of power that supersedes many nation-states. If ExxonMobil’s revenue were counted as GDP, it would rank among the top 30 nations in economic wealth.[1] During Coll’s talk at the Mellon Sawyer Seminar, he emphasized how former CEO Raymond Lee made it a priority to ensure that ExxonMobil operated independent of any government. Coll specifically explained that ExxonMobil did not base decisions on what was good for the United States but instead on what would benefit ExxonMobil shareholders. This corporate mentality is certainly not unique to ExxonMobil yet becomes increasingly problematic when considering the international reach that most multinational corporations have acquired. In fact, in many of the countries where ExxonMobil operates, the corporation has a greater influence over the political climate than does the United States embassy.[2]

During the speaker series, Coll pointed out how the rise of resource nationalism across the post-colonial world has completely altered ExxonMobil’s international role. During most of the 20th century, ExxonMobil had very little concern over the acquisition of oil and gas. In fact, the company had so much oil that they did not even “count it,” as Coll says, and even referred to it as “equity oil.” However, once foreign countries, particularly in the Arab world, began to nationalize their resources, oil companies like ExxonMobil suffered. The primary issue was that the remaining availability of oil consequently tended to be located in weak nations characterized by conflict, insurgencies, and other human rights issues. With ExxonMobil holding more economic power than the majority of these countries, there arose the question of how much moral responsibility the corporation was to assume. However, as past Sawyer Seminar speakers have addressed, there is not necessarily an international legal framework or enforcement mechanism that would compel multinational corporations to combat these injustices. Furthermore, Coll also suggested that potential damage to public reputation has little impact on how ExxonMobil chooses to conduct its business operations. Unlike companies such as Nike and Starbucks, customers are not a principle concern for ExxonMobil. Coll explained that whereas other corporations often need to maintain a positive image to capitalize on the volatility of customer loyalty, gasoline sales are understood as more of a utility, meaning there is less pressure on ExxonMobil to actively appeal to the public. Nonetheless, incidents such as Valdez and Deepwater Horizon show that oil companies are not exactly exempt from the public eye, yet even then, they continue to lobby foreign governments with the sole concern of maximizing profit.

In speaking about Private Empire on NPR, Coll discussed how ExxonMobil executives “[…] see themselves—ExxonMobil—as an independent sovereign with their own foreign policy. Sometimes their interests ally with the United States government, sometimes they find themselves in opposition to the United States—and sometimes they try to stay out of the way.”[3] For example, despite the vested interests of the State Department, ExxonMobil was in opposition to invading Iraq. With remaining oil reserves being increasingly difficult to access, ExxonMobil knew that Iraq would inevitably need to depend on their company’s technology and resources. This is just one of many examples that further demonstrates the extent to which multinational corporations, such as ExxonMobil, have acquired the ability to assume a sort of quasi-sovereignty, enabling them to shape policy and politics while operating across numerous territories and legal systems.

[1] Hochschild, Adam. “Well-Oiled Machine.” The New York Times, The New York Times, 9 June 2012, www.nytimes.com/2012/06/10/books/review/private-empire-steve-colls-book-about-exxon-mobil.html.

[2] Coll, Steve. Private Empire: ExxonMobil and American Power. Penguin, 2013.

 

[3] “ExxonMobil: A ‘Private Empire’ On The World Stage.” Fresh Air, NPR, 2 May 2012, www.npr.org/2012/05/02/151842205/exxonmobil-a-private-empire-on-the-world-stage.

 

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