Total Clean Up

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Jean-Michel Gires, 46, who heads the company's sustainable-development efforts, points to a recent $4 billion project in Venezuela, which produces and refines extra-heavy crude from the Orinoco basin, as evidence of Total's new philosophy in action. As part of its efforts to support people living in the area, Total not only built schools, medical facilities and roads but also employed experts to study public-health issues there. Total discovered that safeguarding the water supply would vastly decrease local diseases, and it is seeking to fund several projects to improve the infrastructure. The $2 million annual cost is part of an estimated $95 million that Total spends on such societal projects yearly, according to the company's first corporate social-responsibility report, published last year (on recycled paper, naturally). That's about 1% of its 2002 profits of $8.3 billion.

Total's biggest critics are watching this activity with interest, but not without skepticism. "It's good they are going through the motions," says Gavin Hayman of Global Witness, a British group that has been fiercely critical of Big Oil's actions in Africa. "They are moving in the right direction but nowhere near fast enough."

That Total is talking with such groups as Global Witness and Greenpeace is a novelty. "We'd never been sought out by them before," says Hayman. The company is trying to identify relief groups and other nongovernmental organizations (NGOs) in poor countries that could work with the firm to help smooth relations with local people. In Africa's Niger delta, Total is funding a project by a Brazilian-French NGO called Pro-Natura that is trying to help local communities set up democratic decision-making bodies and develop their economies. "They are not doing this to save the planet," says Guy F. Reinaud, Pro-Natura's president, of Total's motives. "But they've understood that it's in their own interest."

Some of this activity is for internal consumption only. Total has retained a British consultancy called GoodCorporation, which over the past few months has been conducting ethics audits of Total's subsidiaries. These consist of a 76-point checklist that examines whether the companies have clearly written policies on a wide range of issues, from racial discrimination in its hiring practices to paying suppliers on time.

Not everyone is won over. Greenpeace, which kicked up a big fuss over the Erika spill, is frustrated because Total continues to use a leaky pipeline in Siberia and wants the company to show a greater commitment to developing renewable-energy sources such as wind and solar power. "The level of dialogue with BP or Shell is totally different," says Bruno Rebell, Greenpeace's head of international programs. At Henderson Global Investors, which manages about $127 billion in assets, fund managers also think Total needs to do more. A September 2001 accident at a Total fertilizer plant in Toulouse that killed 30 people raised questions about the company's safety record, says Henderson's Nick Robins, and its continuing presence in Myanmar puts it off limits for some of Henderson's socially responsible funds. "We're looking for consistent year-on-year improvements," Robins says. "We recognize Total is trying to change, but we need another two to three years" to ensure that it is changing.

Total can use the time too. Back in Milan, Dairon spends 45 minutes talking about Myanmar, a continuing black mark on the company's international reputation. Total insists that it has done nothing ethically wrong in setting up a big gas project there after all, there are no official U.N. sanctions. But the taint of working with an especially despotic regime and allegations about forced labor raise difficult questions. "Can a company invest in a country that is considered not democratic?" Dairon asks. "Should it substitute for international organizations in judging a country in the first place?" One manager suggests that Total has to publicize the positive things about investing in a military dictatorship: jobs, development, even the hope of change. Good point, Dairon says and one that is a nonstarter for Total's critics, who can't see any good in making a deal with the devil. "We are a company of engineers," says Dairon. "We are very rational. Perhaps we work too rationally." Changing culture, it seems, is easier said than done.