Major stockholders of oil companies continue to pressure management on environmental vigilance.
Perhaps the most noteworthy example is Exxon Corp., where a series of proposals on environmental issues advanced by large institutional shareholders promises to be the focus of heated debate at the company's Apr. 25 annual meeting in Houston.
The latest such proposal, from the Washington State Investment Board (SIB), calls on Exxon to conduct an independent environmental audit of all its facilities and operations worldwide to prevent oil spills.
Exxon earnings fell $1.38 billion in 1989 due to a provision for costs associated with the Mar. 24, 1989, Exxon Valdez tanker oil spill in Alaska's Prince William Sound (OGJ, Apr. 16, p. 19).
The ultimate costs stemming from that spill and cleanup about $2 billion to date and mounting-won't be known for years (OGJ, Mar. 26, p. 21).
Further, some analysts have said that the value of Exxon's stock has slipped as a result of the Exxon Valdez spill and the company's handling of the cleanup as well as other Exxon oil spills in the New York-New Jersey area.
AUDIT REQUEST
SIB adopted a proposal by SIB board member and Washington State Treasurer Dan Grimm to send a letter to Exxon Chairman Lawrence Rawl asking Exxon's board to commission an independent audit of its facilities and operations, including its management plan to prevent spills.
SIB owns and manages 164,600 shares of Exxon stock. Another 925,000 shares of Exxon stock are included in SIB's portfolio as part of a separately managed mutual fund.
SIB asked Exxon's board to select the independent auditor in conjunction with major stockholder representatives and that the audit be complete by the 1991 annual meeting.
Citing the recent charge against earnings for the Exxon Valdez cleanup and settlement costs, SIB said, "Without adequate improvements in the Exxon management plan to reduce the likelihood of future oil spills, the value of our holdings could be jeopardized."
Grimm noted that Exxon tankers regularly cross Washington's Puget Sound and said, "If Exxon rejects this request, the governor, the legislature, and the state's congressional delegation would have no choice but to consider other approaches to assuring the safety of oil tanker operations in Washington waters."
Deputy State Treasurer Scott Shearan said those "other approaches" could involve asking the U.S. Coast Guard to tighten tanker safety rules off Washington, including possibly halting some tanker traffic.
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