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Oil Co. Investors Crush Proposal to Consider Environment

by NewStandard Staff

*A correction was appended to this news brief after initial publication.

May 15, 2006 – Last week, shareholders controlling an overwhelming majority of ConocoPhillips stock rejected the very idea of asking the company’s board of directors to prepare a report on potential environmental damage related to drilling in a protected Alaskan wilderness area.

The proposal was put forth by the US Public Interest Research Group (US-PIRG), a liberal environmental- and consumer-protection organization, on behalf of shareholder Green Century Capital Management, which administers what it calls "environmentally friendly mutual funds."

The proposal appealed to shareholders’ sense of corporate responsibility and concern for the company’s image. It urged them to live up to ConocoPhillips literature, which boasts support for a handful of conservation-oriented programs focused on protecting birds.

The focus of the shareholder resolution is several hundred thousand acres on the Alaska North Slope that are currently off limits to oil exploitation. The area is home to critical migratory-bird habitat.

"Pledging not to drill sensitive ecosystems will enhance our company's image and reputation with consumers, elected officials, current and potential employees, and investors," reads the resolution.

But the proposal stopped short of calling for such a pledge. Instead, all it asked is that board members commission a study by 2007 on the issue of drilling in the National Petroleum Reserve in Alaska, and that the report "consider the implications of a policy of refraining from drilling in such areas."

Despite the defeat of even such a tepid proposal by a three-to-one margin, US PIRG and Green Century Capital Management issued a celebratory statement.

"This is a landmark day for Teshekpuk Lake and for all threatened ecosystems around the world," said Andrew Shalit of Green Century. "More than one quarter of the shareholders of an oil company have said, ‘Sometimes you shouldn't drill. You have to consider the environmental cost.’ We hope ConocoPhillips and other oil companies will take that message to heart and develop policies to protect the world's most sensitive ecosystems."

CORRECTION

Minor Change:

The lead sentence of this brief originally read "The overwhelming majority of ConocoPhillips shareholders rejected..." In fact, since one share equals one vote, we cannot say how many shareholders voted in favor of the proposal. Instead, it was shareholders in control of the overwhelming majority of the company's stock. We should not have assumed that because a partial source stated that a quarter of the shareholders had voted a certain way, that such was necessarily the case. It could well have been more or less.

 | Change Posted May 23, 2006 at 00:29 AM EST

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This News Brief originally appeared in the May 15, 2006 edition of The NewStandard.
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