Okay, last week I gave some historic background to the use of religion to increase the power of government, and our eventual removal of the church from political power. A legitimate comment is that nowadays we are not so gullible to allow that to happen.
However, a new version of the trick has taken over in the oil fields of Niger:
Same Old Appropriation Game
In the Nineteen Seventies, the government of Niger forced indigenous people off the country’s oil fields in order to give the resource to Royal Dutch Shell and Chevron. Given the way things work in the Third World, we can make a good guess why and how these oil companies got that kind of government assistance. Then when the displaced people organized to fight their oppressors, the very same government passed legislation that disturbing oil production was an act of treason.
Same old story, different sin. I suppose it’s a better death to be shot by a firing squad than to be burned as a witch. The world is making progress, folks!
Illegal Practices
I also mentioned two ways business can take advantage of a democratic government: some more legitimate, others less so. Just to jump in with both feet, let’s talk about the illegal ones.
And I’m not just talking about companies that break the law. I’m considering institutional practices and methods that allow companies to do things that are actually against the law, but they get away with it enough of the time that it’s good business to do so.
Mine Cleanup
Last week word came down about the number of abandoned oil and natural gas drilling sites in Western Canada and the several billion dollars it will cost to clean them up. A good deal of it will be paid by you and me because the business owners took their profits and declared bankruptcy, leaving no one responsible for their mess. And it’s hard to bring charges because of the difficulty in proving intent. If a company spends all its money drilling a well but finds nothing and goes bust, that was just bad business practice. Too bad, so sad, nothing criminal happened.
Of course, in the complex world of Big Oil, these smaller companies are often subsidiaries of larger holding companies, and the only thing harder than following the paper trail to the top is tracing a path of responsibility back to the illegal act.
No wonder these big companies are keen on smaller government. Less government employees means less inspectors to catch them with the smoking gun. Or drilling site, as the case may be.
The Cost of Breaking the Rules
Speaking of incentives to crime, often companies find it less expensive to pay the fine than to fix the problem. Put in simple human terms, let’s say parking costs $30 a day, and a parking ticket costs $100. If you figure you only get caught parking illegally once a week, well, do the math. Now apply that to the multi-billion-dollar oil exploration industry. As usual, influence in government keeps the rules from changing to reflect costs.
Cleanup of oil ocean oil spills also comes to mind due to the Trans-Mountain debacle. Predictions of the cost of an oil spill are often ridiculously low. Then the collection of bond money is often bungled at the regulatory level. Once a spill occurs and the bills start to come in, the company can always fold. The stockholders are not liable; the executives fade away, leaving the whole thing in a legal morass that benefits nobody but the lawyers for the foreseeable future.
Shell Companies
And while we’re on the topic of business influence abetting crime, one of the big advantages the business world wrested out of government regulations in the past was the ability to create pretend companies that hid the people who profited from the government. The original benefit was to evade taxes, but lately organized crime and terrorist organizations have taken advantage of this big time. They can create shell companies to launder the money from their illegal activities, developing such a complicated web of ownership, protected by government “privacy” regulations, that no one can figure out what’s going on.
And if you want to find out who is responsible for these laws, follow the money. The only reason these regulations exist is the influence big business has on the creation of legislation.
The Bottom Line
And the problem is that governments are never going to change the laws to stop these practices because there is too much pressure from business. You know the old teenage “Everybody else is doing it” excuse? That’s exactly the ticket. “United States has better tax loopholes. If you close all Canada’s, we will pack up and move out.”
I humbly submit that perhaps if the only reason you’re basing your company in Canada is how much illegal activity you can get away with, perhaps you would be better off somewhere else. Canada would be better off, that’s for sure.
That’s the Obvious Stuff
But the main question of illegality is not what the companies do illegally, but what the government does about the perpetrators. Or doesn’t do. The new law that was hidden in last year’s budget omnibus bill to let SNC Lavalin off the bribery hook is nothing new in the world of white-collar crime. 315 American corporations have taken advantage of their system in the past 15 years.
Next week we’ll get to the legal ways the corporate institution is taking us for a ride.