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March 18, 2004
Occidental To Adopt Formal Human Rights Policy, Shareowners Withdraw Resolution
    by William Baue

Successful shareholder action results in steps towards Occidental formalizing its human rights policy.

Yesterday, Occidental Petroleum (ticker: OXY) announced its intention to adopt a formal human rights policy, prompting the California Province of the Society of Jesus to withdraw the resolution it filed with a group of other shareowners on this issue.

"This is a significant step," said David Schilling, global corporate accountability program director for the Interfaith Center on Corporate Responsibility (ICCR), the umbrella organization of many of the resolution co-filers. This group includes socially responsible investment (SRI) firms such as Christian Brothers Investment Services (CBIS) and Boston Common Asset Management as well as several faith-based organizations. "We had two meetings with the company and after they agreed to adopt and implement a human rights policy, the filers decided to withdraw the resolution."

"Occidental has committed to base the policy on the Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the Voluntary Principles on Security and Human Rights, and international humanitarian law," Rev. Schilling told

The term "human rights" currently does not appear in Occidental's Code of Business Conduct, adopted in 1997. Its Global Good Neighbor Policy, adopted the same year, commits the company to "uphold the human, cultural and legal rights" of those directly impacted by Occidental’s operations.

Occidental is also an endorser of the Global Sullivan Principles of Corporate Social Responsibility, a set of eight codes for ethical corporate practice. Occidental issued a report on its adherence to these principles in 2001. Occidental is also a signatory of the US State Department's Voluntary Principles on Security and Human Rights. However, none of these commitments fulfills the comprehensive human rights policy sought by the resolution proponents.

"There remains a lot of work to make sure that the policy that will be adopted is comprehensive, implemented, enforced, and includes external verification and transparent reporting," said Rev. Schilling.

Exactly how the policy will be implemented, enforced, verified, and reported remains to be determined by the company and the resolution proponents.

"That's something we're going to be discussing with the proponents--this is all up for discussion," said Larry Meriage, Occidental's vice president of public affairs.

"Occidental believes that a policy formalizing our long-standing commitment to support human rights has value for the corporation and its stakeholders," said Dr. Ray Irani, the company's chair and CEO. "To this end, Occidental is committed to consulting with the proponents of the proposal and others as it works toward the adoption of a formal human rights policy."

Occidental is currently the subject of litigation charging significant human rights abuses. On April 24, 2003, the day before Occidental's annual meeting, the International Labor Rights Fund (ILRF) filed suit under the Alien Tort Claims Act (ATCA) alleging Occidental's complicity in the 1998 killing of citizens of Santo Domingo, Colombia. The suit alleges that the Colombian Air Force, which Occidental funded to protect its Cano Limon pipeline, bombed Santo Domingo and killed 19 villagers with logistical support from Occidental's private security firm, AirScan.

The ATCA is seeing increasing use as a tool to hold corporations accountable for human rights abuses in overseas operations. The 1789 law allows for US corporations to be sued by citizens of countries lacking legal protection against specific human rights violations--namely slavery, torture, extrajudicial killing, genocide, war crimes, crimes against humanity, and arbitrary detention. Occidental joins Unocal (UCL) and ExxonMobil (XOM) in facing such suits. Earlier this month, the Business Roundtable, US Chamber of Commerce, the American Petroleum Institute (API), and others filed an amicus (or "friend of the court") brief asking the Supreme Court to nullify the ACTA.

Occidental vehemently denies the suit's allegations.

"Occidental has not and does not provide lethal aid to Colombia's armed forces," the company said in a statement issued immediately after the suit was filed.

Regardless of the outcome of the suit, the resolution proponents will continue to work with the Occidental to develop a human rights policy.

"We have agreed to continue to work and collaborate on this until we get a policy," said Mr. Meriage. "We're not driven by the clock--at the end of the day, we want a good policy that will work well for our shareholders and other stakeholders who have an interest in these activities."


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