PDF Summary:Private Empire, by Steve Coll

With the scale and reach of a sovereign nation, Private Empire details how ExxonMobil wields its autonomy and financial might to influence governments, dictate energy policies, manage crises, and ultimately serve its own interests above all else. Through profiles of leaders like Lee Raymond and Rex Tillerson, Steve Coll examines the inner workings of this corporate giant across the globe.

The author highlights ExxonMobil's efforts to mitigate climate change backlash and environmental regulations, unraveling the complexities around sustainability, business ethics, and the ever-present quest for new oil reserves. As the narrative unfolds, Coll explores the tangled world of multilateral organizations, authoritarian rule, regional conflicts, human rights violations, and security challenges that intertwine with ExxonMobil's operations.

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ExxonMobil's decision to halt its gas production operations.

Coll highlights the difficulties ExxonMobil encountered as it adapted its security protocols to deal with the complex circumstances of turmoil in Aceh, where the local population was vehemently against the central government's control of their natural resources, during a time when Indonesian authorities were actively pursuing foreign investment. ExxonMobil's safety division, which included experts with experience in the U.S. military and intelligence sectors, conducted autonomous threat assessments, collected unique intelligence data, and worked closely with the T.N.I. to address the disturbances. The writer argues that the leadership at ExxonMobil's headquarters in Irving was aware of the Indonesian military's past of human rights abuses and understood that employing the T.N.I. for security might lead to allegations of complicity or subject the company to legal jeopardy. In 2001, they decided to discontinue the extraction of natural gas in Aceh, aiming to both pressure the government into enhancing security and to stimulate international pressure on G.A.M.

Coll describes the lengths to which the Bush administration went when production at ExxonMobil halted. Amidst the turmoil, Robert Gelbard, the administration's principal representative to Indonesia, initiated actions to revitalize the oil and gas sector. Gelbard, supported by the capital, engaged in discussions with G.A.M. leaders, urging them to halt their hostile activities against ExxonMobil and warned that the Bush administration's support for Indonesia's campaign to quell the Aceh rebellion might intensify, possibly leading to increased intelligence assistance. The collaboration between ExxonMobil, the Indonesian military, and the Bush administration also put at risk efforts to reduce human rights violations in Aceh. The author portrays these mixed signals as emblematic of the intricate difficulties that arise when the aspirations of U.S. businesses, insurgent actions, and American government policies converge in conflict zones.

ExxonMobil consistently fights legal battles to refute claims of its involvement in human rights violations.

In his book, Steve Coll recounts a 2001 legal action initiated in a federal court in Washington, D.C., which alleged that ExxonMobil was involved in human rights abuses amid the strife in Aceh. In 1999, a lawsuit was initiated alleging that security forces of ExxonMobil, along with Indonesian military units, were implicated in acts of torture, physical violence, and deaths. ExxonMobil forcefully denied the lawsuit's assertions regarding legal jurisdiction. Coll argues that the company leveraged the reluctance of authorities in Indonesia to subject their counterinsurgency actions in Aceh to international examination, along with the U.S. government's commitment to counterterrorism, to strengthen its position in legal conflicts.

The author describes how the Bush administration argued before the court that halting the John Doe lawsuit would benefit the United States by strengthening Indonesia's partnership in combating Al Qaeda after the events of September 11, which would also be favorable for ExxonMobil. Stability and a reinforced position in Aceh were ultimately restored by the Indonesian government and its military forces. The Bush administration eventually altered its stance and informed the court that the lawsuit could go forward, a move that left ExxonMobil open to possible legal consequences for its role in the Aceh conflict after a significant postponement. The portrayal by Coll emphasizes the company's vulnerability to legal actions, particularly in an era marked by a heightened push for corporate responsibility and global demonstrations against breaches of human rights.

The initiative that involved collaboration with the World Bank in Chad.

ExxonMobil's participation in a joint initiative with the World Bank, aimed at using oil income to foster development, eventually resulted in the corporation abandoning its goals of promoting social progress.

Steve Coll delves into how ExxonMobil began extracting crude oil in the economically challenged, landlocked nation of Chad. The institution spearheaded a distinctive partnership, directing the management and supervision of a plan to channel Chad's petroleum revenues into bolstering social welfare initiatives and promoting the nation's economic development, as opposed to the oil firm's advancement. The oil behemoth's engagement in the unanticipated task of nation-building arose from its strategic insight that to capitalize on Chad's petroleum resources, it was essential to show Western countries and environmental groups that the revenue generated would be directed towards addressing the country's pressing problems like poverty, lack of educational resources, malnutrition, and elevated child and maternal mortality rates, in addition to bolstering the safety of its oil ventures.

ExxonMobil chose to collaborate with the World Bank in the oversight of Chad's oil revenue, a move designed to shield the company both politically and in terms of its public image. By not taking on the social spending initiative on its own, the company avoided intense scrutiny and potential challenges from environmental and human rights organizations, which could have jeopardized the project. The World Bank, in contrast, possessed a dedication to poverty reduction and the requisite expertise, which, unlike a company focused on oil production, provided it with the ability to manage and implement a significant project designed for social transformation.

ExxonMobil focused on the extraction of petroleum and maintained a strict adherence to its contractual obligations, ensuring that its operations were clearly separate from the goals of the World Bank, while adapting to the ever-changing political environments and corrupt practices.

Coll describes how ExxonMobil's involvement in the World Bank partnership diminished after 2003, citing ongoing difficulties, the unstable political environment, and corrupt activities linked to Idriss Déby's authoritarian rule in Chad as contributing factors. The company's focus on petroleum production and maintaining contracts intensified, and while its engineers were hesitant to tackle the complex challenges in Chad, frustration and resentment towards the World Bank for not achieving the societal investment objectives grew among the executives in the United States and the French office overseeing the Chad initiative. Confronted with Déby's displeasure regarding the caps on defense expenditures, which led him to contemplate exiting the pact, the company chose not to support the international financial institution. Andre Madec, who was in charge of ExxonMobil's worldwide community relations, had a contented stance on the current structure and possessed a contrasting perspective from the bank on the disagreements with Chad.

ExxonMobil hastened its oil production schedule, adhered to the terms of existing oil contracts with Chad's prior corrupt governments, and accelerated payments to President Déby's regime to appease him and guarantee the continuous extraction of Chad's oil. In Steve Coll's depiction, ExxonMobil crafted a plan to operate within a volatile dictatorship, placing the protection of shareholder interests above the well-being of Chad's impoverished population.

A failed effort to take over power within Equatorial Guinea's territory.

ExxonMobil contributed to improving the country's reputation as it collaborated with an authoritarian regime, utilizing subtle diplomatic strategies, and forging security-related pacts.

In his book, Steve Coll details how ExxonMobil, in concert with other prominent players in the international petroleum sector and US foreign policy circles, adeptly managed their business affairs within Equatorial Guinea, an African island nation known for its tyrannical and graft-ridden leadership. ExxonMobil avoided public criticism of President Teodoro Obiang Nguema's government for its significant human rights abuses, while quietly seeking assistance from the U.S. and Israeli governments to strengthen the autocratic regime's internal security apparatus. The corporation engaged in private talks with the sovereign, proposing alterations in governance and societal structures aimed at improving his global reputation. During a period marked by a surge in corporate accountability movements, ExxonMobil faced increasing challenges in defending its business dealings with a notoriously harsh government. ExxonMobil opted for a subtler form of diplomacy instead of participating in overt confrontations.

The author describes how the relationship between the United States and Equatorial Guinea evolved after the latter emerged as a major oil producer after 2001, but emphasizes that the core attributes of the regime led by Obiang remained unaltered. The decision to establish a U.S. diplomatic presence in Malabo was partly driven by the need to secure stable international oil supplies during the Bush administration, with significant backing from leading American oil corporations that favored expanding U.S. influence. Despite facing scrutiny from Congress, American diplomats and defense advisors struggled to defend their covert support for Obiang given his appalling human rights record.

The attempt to depose a government using hired soldiers and its repercussions for ExxonMobil's security and economic concerns, along with their strategy for managing an unstable political environment, also involved the engagement of the Bush administration.

Coll recounts how British mercenaries, supported by opponents of Obiang who were based in Spain, made a daring yet ultimately futile effort to overthrow him. The writer argues that the attempted coup underscores the significant risks faced by entities engaged in the oil industry within Equatorial Guinea. Steve Coll details how British intelligence, upon noticing Mark Thatcher's involvement, tipped off South African officials, which resulted in the apprehension of a group in Zimbabwe precisely when they were preparing to set off for Equatorial Guinea in a plane that once served the US Air Force.

American authorities became more worried about strengthening security measures for Obiang after the attempted coup against the government. During the subsequent summer, the meeting in Washington between Colin Powell, who was serving as the United States Secretary of State at the time, and Obiang included an offer of support, highlighting the necessity for significant improvements in human rights and governance. The Bush administration subsequently licensed a private security contractor, Military Professional Resources Inc., headquartered in Virginia, to train Equatorial Guinea’s police and military forces. During the tenure of President Bush, Obiang strengthened his relationship with Israel, securing armored patrol boats, surveillance technology, and various other military equipment from Israeli companies. Obiang dedicated a larger share of his country's oil revenues to improving political and social circumstances, heeding the counsel of American oil companies and the direction of the Bush administration, in an effort to strengthen his position and foster stronger ties with the United States, particularly regarding defense and intelligence collaboration.

The emergence of M.E.N.D. in Nigeria.

ExxonMobil encountered challenges in a region plagued by instability, implementing a strategy that intertwined passive security tactics with active community engagement, and simultaneously tackled the growing issues of piracy and kidnappings.

The author elaborates on how ExxonMobil's complex dealings with Nigeria and various other West African nations in turmoil were a key component of its strategy to grow beyond North America at the dawn of the new century. The escalating violence, abductions, and widespread pilfering of oil led to significant financial repercussions for Nigeria and disrupted the extraction of oil. The author contends that the difficulties encountered in Nigeria prompted ExxonMobil to revise its security strategy in impoverished nations, focusing on a "passive" defense system designed to enhance political and physical protection at its corporate sites by essentially turning them into fortified enclaves. The company bolstered its monitoring systems to detect emerging threats throughout the entire region of the Niger Delta. The corporation sought to bolster its sway and governance over local leaders in the realms of both finance and governance.

ExxonMobil held the belief that Nigeria would, in time, develop a system of governance as transparent and protected by legal principles as seen in nations such as Norway and Canada. ExxonMobil adapted its strategy to improve functioning in a setting plagued by dishonesty and strife, by hiring security staff to protect its petroleum workers and making efforts to win over Nigerian officials, despite the uncertainty of their commitment to the company's goals. The author portrays the company as cautiously agreeing to the stipulations of the Voluntary Principles, which served as a safeguard against possible legal actions in North American and European countries alleging that the company benefited from shortcomings in security measures.

ExxonMobil collaborated with Nigerian and U.S. officials to strengthen security protocols after its workers were abducted and due to dealings with local political leaders.

Coll highlights the forceful kidnapping of seven contractors working for ExxonMobil in 2006, who were taken against their will from the company's well-protected facilities in Eket, situated in the oil-rich region of Akwa Ibom State by the Atlantic coast. The rise of the Movement for the Emancipation of the Niger Delta put to test the previously accepted notion of stability in the region's oil industry. He details the abductors' strategy to extort a significant sum, particularly an amount in the multimillion-dollar range, from ExxonMobil, the involvement of go-betweens with connections to Nigerian politics, and Governor Victor Attah's urgent need to manage the situation while preserving his image as a pro-business, Christian leader. The intensifying actions of M.E.N.D., such as abductions, attacks, and incursions aimed at oil workers and facilities, underscored the inherent weaknesses of ExxonMobil's operational strategies in Nigeria.

ExxonMobil initiated its operations in Nigeria by engaging with community members, supporting athletic groups, funding schools, and enhancing water systems to strengthen its reputation in the area and reduce the risk of kidnappings or militant actions. Efforts to navigate the region's corrupt and deceitful political landscape often failed, as individuals ascending to positions of authority frequently harbored personal motives or had ties to criminal entities. Following the increase in violent incidents after 2005, the company built secure compounds. ExxonMobil developed an intricate system to surveil potential threats, aiming to identify any antagonists prior to their intrusion upon the company's facilities; it also strengthened its defenses and devised contingency strategies for evacuation should the primary security protocols fail. The company's enhancement of its protective strategies by partnering with Nigerian military contingents faced limitations because the author claimed these groups were significantly infiltrated by local criminal organizations.

Other Perspectives

• Engagement with authoritarian regimes can be a necessity for energy companies due to the geographic distribution of oil and gas reserves, and such engagements can sometimes contribute to local economies and infrastructure development.
• The reliance on local military forces for protection in regions like Aceh can be seen as a practical measure for a company to protect its employees and assets in a conflict zone where private security may not be sufficient.
• Decisions to halt gas production can be strategic business decisions aimed at ensuring the safety of workers and assets, and not necessarily an admission of wrongdoing or complicity in local conflicts.
• Legal battles over human rights allegations can be complex, and companies often contest jurisdiction and legal principles to defend their interests and operations, which is a standard practice in international business disputes.
• Collaborations with entities like the World Bank in countries like Chad can be part of corporate social responsibility efforts and can face challenges due to factors beyond the company's control, such as political instability and corruption.
• In regions with political instability and corrupt practices, maintaining contractual obligations and focusing on core business activities can be a way for companies to navigate uncertain environments while upholding shareholder interests.
• Diplomatic strategies and collaborations with governments, even if authoritarian, can be part of broader geopolitical and economic interests, and companies may engage in these relationships to maintain stability and access to resources.
• In places like Nigeria, where instability and security threats are significant, companies may need to implement robust security measures to protect their operations, and community engagement can be part of a broader strategy to foster local support and reduce tensions.
• Collaborations with local and U.S. officials on security matters can be part of fulfilling corporate due diligence to protect employees and operations in high-risk areas, and may involve complex negotiations with various stakeholders.

ExxonMobil's shift in leadership was accompanied by a significant alteration in the company's management practices and corporate ethos.

Lee Raymond steered the company with a commanding style.

The focus on streamlining operations, reducing expenses, and fostering a sense of responsibility significantly enhanced ExxonMobil's economic outcomes, while it also cultivated an environment characterized by intimidation and excessive admiration.

Under Lee Raymond's guidance, his distinct personality traits and management approach had a profound impact on both the culture and operational practices within ExxonMobil. Steve Coll describes a complex sentiment towards Raymond, who provoked a mix of respect and animosity within the company, and was known among his colleagues as "Iron Ass." From 1993 to 2005, ExxonMobil saw substantial financial growth, surpassing its competitors and consistently increasing in scale and profitability under his leadership. Under his tenure, ExxonMobil came under heightened scrutiny within the US for its environmental policies, perceived arrogance coupled with soaring profits, and unwavering refusal to acknowledge any misconduct.

The author portrays the individual as a person who steadfastly follows a systematic approach, values efficiency, and maintains skepticism towards those whose evaluations did not meet his standards. He earned notoriety for his disregard of financial analysts' perspectives on ExxonMobil's strategic direction and was well-known for his severe rebukes of colleagues and subordinates who did not live up to his standards for acumen or intellect, particularly when their assessments were at odds with the company's firmly held convictions. He became known as "stupid shits." Raymond emphasized cost-cutting measures and cultivated an ethos of accountability throughout the company. The writer argues that such traits were not only instrumental in enhancing Exxon's success and accomplishments but also cultivated an environment deeply shaped by stress and uniformity.

The concept referred to as "The Single Correct Solution"

The ethos of ExxonMobil was profoundly influenced by a steadfast dedication to managing safety, cultivating an environment characterized by rigorous discipline and uniformity, and an ongoing effort to eradicate errors following the Valdez incident.

The book documents the significant changes in Exxon Mobil's executive ranks that resulted from the Exxon Valdez disaster. Lee Raymond was instrumental in spearheading these changes, working in close partnership with Lawrence Rawl, who led Exxon. Rawl's authoritative presence and straightforward manner often left others in awe. Following the Valdez incident, Raymond and Rawl conducted a comprehensive assessment and management of potential risks, with the goal of improving safety protocols and operational processes to minimize the likelihood of a similar event. The company implemented a fresh protocol aimed at maintaining operational integrity, a system that was developed internally by one of Exxon's divisions. Raymond and Rawl firmly decided to adopt O.I.M.S. throughout the entire corporation after the Valdez event, with Raymond taking the lead as the main advocate.

The writer depicts the evolution of a steadfast US company into an entity that is more organized and efficient, marked by a proliferation of rules and managerial strategies aimed at fostering an environment of intimidation. The innovative approach prioritized a challenging yet attainable goal of eliminating all incidents, even within a corporation as vast as ExxonMobil. The corporation's objective was to diminish or entirely eliminate the influence of human frailties. The revised rules required more rigorous substance testing and mandated that employees consistently identify and mitigate not only their own possible risky actions but also the risky actions of their peers, aiming to diminish the impact of human factors on operational processes. Steve Coll illustrates the development of a culture prioritizing safety, as evidenced by widespread marketing campaigns, obligatory global safety meetings, extensive drug screening programs, and a time when reversing into parking spaces was a compulsory practice for employees. The initiative sparked by the Valdez incident sought to prioritize safety above all; yet, the author argues that it led to a system where the fundamental principles and all aspects of ExxonMobil's activities were tightly governed by orders from upper echelons, which prioritized compliance and often sidelined or overlooked those skeptical about the possibility of entirely preventing accidents in a business as extensive as ExxonMobil.

The baton of leadership was passed from Raymond to Tillerson.

The board of directors encountered challenges in supervising the transition of leadership that led to Rex Tillerson's appointment as CEO, where he advocated for a more collaborative and transparent strategy and undertook the challenge of altering the public's perception of ExxonMobil.

The story highlights the crucial change at the helm of ExxonMobil when Lee Raymond, the company's long-standing chief executive, stepped down. Raymond had appointed two seasoned deputies, Rex Tillerson along with Edward Galante, both of whom were in the running for the top position, and throughout the mid-2000s, they worked together under Raymond's direction, each managing separate sectors of the company's business activities. Tillerson was commonly perceived as the frontrunner in the contest. Certain members of the ExxonMobil board believed that Raymond deliberately extended his tenure as chairman and CEO into his sixties by managing the succession competition, thereby creating a situation that allowed his favored candidate to emerge prominently. The author conveys concern that the acquisition could have simply been a ruse. A board member suggested focusing more closely on Raymond.

The corporation’s board of directors, after much debate and careful evaluation, did in fact choose Tillerson as Raymond's replacement, and as he settled into office after 2006, several aspects of the leadership transition proved to be distinctive. Tillerson sought to cultivate an atmosphere of collaboration, in contrast to the approach taken during Raymond's leadership. In contrast to his peers, Tillerson, lacking expertise in petroleum reservoir geology, did not provide personal assessments on climate change or other energy-related subjects. The author notes that Tillerson was resolute in his efforts to transform how ExxonMobil and the entire sector were viewed by the public. The company never aimed to be perceived as the primary opponent in the public eye. Amidst a broader trend of diminishing control over oil extraction operations, bolstering the company's reserve replacement and aligning ExxonMobil's expansion across borders with the growing demands for corporate responsibility from civil groups and government entities posed a significant challenge for Tillerson. While ExxonMobil's profits were on the rise, its public image continued to be an issue, impacting its capacity to recruit skilled workers and constraining its political maneuverability. Coll outlines the difficulties the corporation encountered in recruiting and retaining experts in various scientific fields.

Other Perspectives

• While Raymond's leadership style was effective in driving financial growth, it could be argued that such an approach may not be sustainable in the long term due to potential negative impacts on employee morale and corporate culture.
• The focus on profitability and cost-cutting under Raymond's tenure might have come at the expense of other values, such as environmental stewardship or social responsibility.
• The implementation of strict safety protocols and the O.I.M.S. system, while improving safety, could potentially lead to a rigid corporate culture that stifles innovation and adaptability.
• The goal of eliminating human errors entirely may be unrealistic and could create an environment where employees are afraid to report mistakes or take necessary risks.
• Tillerson's strategy for a more collaborative and transparent approach may face resistance within a corporate culture deeply shaped by his predecessor's more authoritative style.
• Efforts to alter ExxonMobil's public perception under Tillerson might not be sufficient if not accompanied by substantive changes in corporate practices and policies that address public and environmental concerns.
• The emphasis on aligning expansion with corporate responsibility could be seen as a response to external pressure rather than a genuine commitment to sustainable practices.

ExxonMobil's engagement in regulatory and political disputes includes its approach to formulating strategies for energy policies and its stance on global warming.

Conversations about employing phthalates and adopting a prudent strategy.

ExxonMobil's lobbying efforts to combat chemical regulation, its defense of DINP use in children's toys, its use of risk analysis frameworks, and its struggle against the precautionary principle

ExxonMobil utilizes its substantial knowledge in science and its adept representatives to challenge regulations on chemicals that might adversely affect its business activities. Coll describes a dispute over the preferred approach in the industry for evaluating potential hazards, contrasting with the prudent strategies endorsed by some proponents of environmental and public health. ExxonMobil advocated for a policy that would necessitate irrefutable scientific proof of a chemical's detrimental effects on human health prior to the enactment of any regulatory controls.

The author elaborates on how ExxonMobil exerted influence over legislative measures aimed at regulating DINP, a chemical used in children's toys, highlighting the clash between various belief systems. Studies on animals indicated potential risks to health, specifically the concern that DINP might disrupt the proper development of reproductive systems in male rodents. ExxonMobil forcefully contended that the potential exposure levels to children through toys did not justify regulatory action, highlighting that for a child to surpass the safety thresholds for DINP exposure, they would need to consume an enormous quantity far beyond what is present in a multitude of rubber ducks, while also pointing out the scarcity of comprehensive human studies on this matter.

Coll's account underscores the benefits of taking an active approach to controlling substances like phthalates. Beginning with the European Union and spreading to California as well as other regions conscious of environmental issues, regulations were put in place to limit the use of DINP in products intended for children that might be chewed on. This development reached its peak with the passage of a federal toy safety bill in 2008, aimed chiefly at certifying the safety of toys made in China, and it also encompassed regulations banning the use of DINP in children's toys within the United States, a ban that was vigorously supported by groups focused on health and environmental issues, as well as by an organization committed to fighting breast cancer. The law's passage was a result of a stalemate between major political factions, and its broad endorsement by different political parties meant that congressional opponents hesitated to obstruct its final sanction. ExxonMobil subsequently encountered a reversal of fortunes. The conversation allowed Coll to illuminate a wider ideological and strategic divide concerning the methods of handling potential public health risks in a technologically sophisticated society where definitive scientific evidence on the impacts of certain products is often limited or ambiguous.

Promotion of ecological responsibility and the dissemination of inaccurate information about climate change.

ExxonMobil's financial backing of groups that challenged the broadly recognized science of climate change, its efforts to sway public opinion and lawmaking, along with claims of unethical business conduct.

ExxonMobil's assertive actions to resist regulatory measures on greenhouse gas emissions are detailed by Coll. He illustrates how ExxonMobil's influential role in a consortium aimed at influencing climate science and policy during the late 1990s and early 2000s mirrors the tactics used by the tobacco industry.

Other Perspectives

• The necessity for irrefutable scientific proof before regulation could prevent premature policy decisions that might stifle innovation and economic growth.
• Risk analysis frameworks used by ExxonMobil and similar companies can be a valid approach to managing potential hazards, balancing economic and public health interests.
• The argument that low potential exposure levels to chemicals like DINP do not justify regulatory action is based on the principle that regulations should be proportionate to the actual risk.
• The use of chemicals like DINP in products should be informed by comprehensive risk assessments that consider realistic exposure scenarios.
• Regulatory decisions should be made in the context of trade-offs, considering the benefits of the chemicals in question against their potential risks.
• The passage of regulations, such as the federal toy safety bill, can sometimes be influenced by public pressure and media narratives rather than purely scientific evidence.
• The support of groups questioning climate change science by ExxonMobil could be seen as part of a broader debate on the uncertainties in climate science and the best approaches to address climate-related issues.
• Influencing public opinion and legislation is a common practice among various stakeholders, including environmental groups, and is part of the democratic process.
• Comparisons between ExxonMobil's tactics and those of the tobacco industry may overlook significant differences in the nature of the products, the evidence regarding their impacts, and the regulatory contexts.
• Financial backing of groups with alternative viewpoints on climate change can contribute to a more diverse and robust scientific discourse, which is essential for sound policy-making.