One
Small Step for Mexican Transparency
By Kenneth
Emmond
Last week Luis Ramirez Corzo, general director of
Petroleos Mexicanos (Pemex), signed an international agreement. It’s basically a promise to address some – though
not quite all – of the lamentable practices that have dogged the oil monopoly’s performance.
Called the United Nations World Agreement, the document
Ramirez signed is a code of ethics embracing the participation of governments, corporations and individuals.
Like many such statements, it’s a fine set
of ideals. Three of its ten principles relate to environmental responsibility, four to fair labor practices, two to human
rights, and one to the eradication of corrupt practices.
From the perspective of Pemex there’s still
one section missing – one that would call for never-before-seen levels of transparency and accountability. Who, aside
from a few top executives, knows what is really going on there? What do its little-known subsidiaries do? How do its union
leaders grow prosperous out of all proportion to their salaries? How will it survive, let alone grow?
Mexico has no monopoly on such problems. Waste, mismanagement
and plundering of resource-generated wealth afflict poor nations everywhere. What happens to the oil riches of Angola, Nigeria,
Indonesia, or even the Persian Gulf? Not much of it percolates down to the majority of the people who live there. The same
holds true of Congo’s gold and diamonds and the copper wealth of Chile and Zambia.
Economist Michael Ross, at the University of California
at Los Angeles, says that on average, countries rich in oil do less to help their poor than countries with fewer resources.
He said this is reflected in higher rates of child mortality and nutrition, and in lower literacy rates.
Oil, it would seem, is the stuff of which kleptocracies
are made. In the words of one wag it is the excrement of the devil.
To address this problem, the London-based Extractive
Industries Transparency Initiative (EITI) was launched last year. Its “Publish What You Pay” program aims to improve
governance of resource management. Membership is voluntary, but even Big Oil is getting on board.
Graham Baxter of BP (formerly British Petroleum),
one of the majors, says, “The curse of oil is a problem that BP recognizes and we have a part to play in helping our
hosts deal with this wall of dollar-denominated cash coming into their fragile economies.” Andre Madec of Exxon sees
it as a “governance curse.”
EITI is already generating results. In Africa, Exxon
is involved in a project that monitors revenues generated by the new Chad-Cameroon oil pipeline. The money is deposited in
offshore escrow accounts and overseen by a committee that represents parliament and civic organizations.
“Countries have no justification for secrecy,”
says Rashad Kaldany of the World Bank’s International Finance Corporation.
That brings us back to Pemex, one of the world’s
most secretive companies. If Exxon concerns itself with cash flows in Chad and Cameroon, surely Mexico’s government
could pay a tad more attention to the obscure boondoggles that Pemex is capable of stage-managing.
If newly oil-rich countries like East Timor, Mongolia,
Nigeria, and Peru are participating in EITI, why shouldn’t Pemex show some interest in disclosing its secrets?
Transparency will become even more important if Pemex
ventures abroad to set up a refinery in Central America.
Since, rightly or wrongly, Pemex is a major financier
of the day-to-day government expenditures, the government should be worried to the point of paranoia about the sizable revenues
that, through carelessness, mismanagement or misappropriation, never make it to the company’s bottom line.
Steps are being taken to reduce gasoline theft. Some
disclosure has been forced on Pemex because it seeks financing in the international marketplace.
For all we know, some of the horror stories we hear
that are based on anonymous or maverick sources are baseless. But that’s just the point. As long as we don’t know
what’s happening on the other side of the opaque wall, the rumors will flourish.
Signing the United Nations World Agreement is laudable.
We all know, however, it’s up to each nation and each company to put into practice the ethical principles it supports
with its signature.
It would behoove the Fox administration, or any other
administration for that matter, to use the World Agreement as a set of benchmarks for evaluating the oil company’s performance.
It would be even better to step up the pressure to ensure that Pemex shares its secrets with its ostensible owners, the Mexican
people.
A good start would be to join the EITI.
——————————
Kenneth Emmond, an economist, market consultant and
journalist who has lived in Mexico since 1995, is also a columnist with MexiData.info.
He can be reached via e-mail at Kemmond00@yahoo.com.
