What we know about Exxon's Rex Tillerson and his likely impact on development

Devex
By Amy Lieberman

Exxon Mobil CEO Rex Tillerson. Photo by: Center for Strategic & International Studies / CC BY-NC-SA

Now that President-elect Donald Trump has selected ExxonMobil CEO Rex Tillerson as secretary of state, the lifelong oil man will need to field questions raised by the international development community before he can take up his job.

Major international nonprofit organizations will have a chance as part of the standard confirmation practice to relay questions to U.S. senators participating in the hearings, which should take place before the presidential inauguration on Jan. 20, 2017.

Trump announced he had chosen Tillerson early Tuesday morning. Tillerson still requires Senate confirmation amid concerns over conflicts of interest, including previously close ties to Russian President Vladimir Putin as well as ExxonMobil’s complicated history with climate change.

Some NGOs are looking forward to the chance to see Tillerson grilled on his attitude toward international aid and major development issues such as global warming.

“The main concern during the confirmation hearings is that Republican and Democratic senators are asking informed questions about whether the U.S. will continue to meet the needs of the poor, and that is something we view as a core element of our work,” said Paul O’Brien, Oxfam America’s vice president of policy and advocacy in Washington, D.C. “Oxfam typically does not speak out on individual candidates but we feel there were questions that need to be asked with this candidate.”

As the development world digests the news of Tillerson’s nomination, Devex explored what is known so far about his record and beliefs and what questions remain about how he would lead as the next secretary of state.

ExxonMobil’s poor climate record has begun to change under his leadership but remains murky.

ExxonMobil, one of the largest multinational corporations in the world, has been notoriously skeptical of climate change since it was formed through a merger of Exxon and Mobil in 1999. Previously, Exxon had admitted — and conducted research as early as the 1980s — that showed climate change’s real risks. As Exxon developed specific measures such as raising its oil platforms to ward off the effects of rising oceans, it also developed a public policy and funding strategy of climate skepticism and denial.

A group of U.S.attorney generals are now investigating Exxon for fraud following the release of these findings, reported separately by the Energy and Environmental Reporting Project at Columbia Journalism School and InsideClimate News in 2015.

While ExxonMobil has somewhat reformed its public stance on climate change under Tillerson, who has served as the company’s CEO since 2006, the company has continued to fund climate change deniers. Tillerson and ExxonMobil are also members of the American Petroleum Institute and various European corporate advisory groups that have opposed climate change policies.

Recently, Tillerson has spoken out on climate change. “We believe that addressing the risk of climate change is a global issue,” he told shareholders this past spring, noting that with regard to the science, “there’s no space between us and the [Intergovernmental Panel on Climate Change].” But he also stressed the continued need for fossil fuels, as ThinkProgress reported. “Just saying ‘turn the taps off’ is not acceptable to humanity.”

Tillerson’s selection may enable a more unregulated expansion of American-based energy companies abroad, says Doug Norlen, the economic policy director at Friends of the Earth US, a federation of environmental and social justice organizations in 75 countries. The Bureau of Democracy, Human Rights and Labor at the State Department, for example, is responsible for providing policies and issuing standards on human rights and labor practices.

“It serves as a platform for U.S. companies that operate abroad, so we can expect that Tillerson’s State Department will be the first stop shop for oil companies wanting to do harmful oil and gas projects throughout the world,” Norlen said. “It is inconceivable to me how he will do anything but cater to the industry he has worked for his entire adult career.”

He has no development background, leaving some worried.

Tillerson, who joined Exxon in 1975 as a production engineer, has only ever worked for the oil conglomerate. This has raised concerns among some international development and anti-poverty organizations, such as Oxfam America, which fear development priorities will slip down the agenda if he becomes America’s top diplomat.

“He has worked exclusively in the private sector and has no public service representing citizens. Will he be an effective statesman for everyone he needs to represent, rather than an effective oilman?” said O’Brien. “Does he have an understanding of how the poor and disenfranchised live and will he represent those interests?”

The risk, O’Brien says, is that Tillerson could focus on transactional or short-term issues when it comes to international aid. Such an approach may work well in other areas of global diplomacy but runs against the popular concept — and the present U.S. strategy — of sustainable development requiring long-term investment.

“He has never worked on development. I don’t think people are concerned he is a bad person, but they are concerned he doesn't know about the fundamental principles of development,” O’Brien said.

ExxonMobil does, however, have a record of working in development as a part of its corporate operations. In 2015, the ExxonMobil Foundation gave $227 million in cash, goods and services to support work in malaria, women’s economic empowerment and other causes. ExxonMobil reported a quarterly profit of $1.7 billion in the spring of this year.

He does have experience leading a large organization.

Tillerson has worked his way up in ExxonMobil and should have an understanding of bureaucratic — and Washington — politics, says Richard Kessler, the former staff director of the Senate Committee on Homeland Security and Governmental Affairs and also of the House Foreign Affairs Committee.

“In many ways he is better than any of the other candidates, from what I understand of him, and I think the fact that he has led a large organization is a good thing,” Kessler explained.

Tillerson understands the “international business environment” and might support institutions such as the Overseas Private Investment Corp., even though funding for this agency does not come from the State Department’s budget, Kessler says.

Also important, he notes, is who is chosen to support Tillerson as his deputy secretary of state. It could either balance the ticket with a more experienced politician with a moderate outlook, or be a selection like, for example, John Bolton, the former U.S. ambassador to the U.N., who would reinforce Trump’s “America first” policy direction.

As ExxonMobil’s CEO, Tillerson prized working in stable areas, at whatever cost.

ExxonMobil chiefly values oil and gas production above all else, as Steve Coll, the author of “Private Empire: ExxonMobil and American Power,” found in his reporting.

“The goal of ExxonMobil’s independent foreign policy has been to promote a world that is good for oil and gas production. Because oil projects require huge amounts of capital and only pay off fully over decades, Tillerson has favored doing business in countries that offer political stability, even if this stability was achieved through authoritarian rule,” Coll, also the dean of Columbia Journalism School, wrote in The New Yorker.

Under Tillerson, ExxonMobil has worked with repressive governments such as Angola and Equatorial Guinea and pushed against financial transparency laws and stronger human rights standards for companies, according to Human Rights Watch.

“Tillerson should clarify how, if nominated and confirmed, he will uphold the United States’ international human rights obligations, in particular by vigorously committing to a foreign policy agenda that promotes respect for rights abroad through greater transparency and anti-corruption measures,” said Sarah Margon, Washington director at Human Rights Watch, in a statement.