Bringing Santos And Its CEO Down To Size

After the recent Santos AGM I was surprised to find its chairman Ken Borda to be just ordinary-sized.

I introduced myself over the lunch but his benign face on an enormous screen for a few hours had made him seem like some modern God.

This was of course what the Santos Public Affairs had hoped for. He could have been everyone’s special older brother just as David Knox, his Managing Director would be a favourite son-in-law… sensitive, thoughtful but in the end, very steady.

Along with the magnificent, three-screen-wide portrayal of the wonders of Santos mining all over Australia and oozing into Asia and PNG, there strode a delightful and well-spoken country woman.

Her long legs and natural charm characterized the whole AGM performance.

But I am not making any ad hominem judgments here: as I said to chairman Ken, this polished occasion left me not knowing what to think.

Perhaps he was right when he explained to his shareholders that their heavy ‘capex’ this last financial year was necessary to move the operations into Asia so that the market could be expanded and the Australian price of natural gas reduced.

Perhaps we the shareholders should appreciate that they did it for our own good, with a cooperative eye to the role of alternative energy sources, and that now our dividends will start to go up again…

But what if the shareholders had bigger horizons? Clearly a very small but vocal percentage of us did.

When I asked Ken about his long-term vision for energy in Oz and his use of the word ‘transition’ in describing LNG, he said he saw it in transition from the dirtiness of coal… But what are we transitioning to?

I persisted.

He turned to me and told me, for about the fifth time that morning, how ‘passionately’ he believed in LNG as a fuel for the future.

I mused on his ‘passion’ and wondered about the probably equal fervor of his shareholders from the Wilderness Society who had proposed a resolution that the Narrabri Gas Project in North West NSW be withdrawn from the Company’s portfolio.

If they had had access to the big screen, rather than coping in the semi-darkness with a squeaky speaker system, the game might have been fairer.

However, concerned shareholders were given a go to ask about a landslide destroying a whole village in PNG in the area of Santos exploration; about their lack of consideration for the elders of the local First Nations peoples near Narrabri; about the lack of any big purchase of Santos shares by its board members; about the validity of a survey of farmers purporting to show that they wanted Santos to return to their lands; about the Santos social-media-reported failure to live up to their promise of return of irrigation waters in Queensland; about the possible deleterious effect of Santos at Port Bonython on the cuttlefish population; about the dredging in Gladstone Harbour; about the danger of ‘fugitive emissions’; about the proposal that some LNG should be reserved in the ground for later use; and perhaps, most importantly, about the integrity of the Santos wells into the future.

But for me the stars of the occasion were the farmers. Led by the intrepid Anne Kennedy, they reminded Santos, one after the other, that farmers had a responsibility to ensure that their land produced food for Australia, as it has for many generations.

Anne voiced their hope to do this for a lot longer than 20 years, the approximate life of the Santos project proposed for the Narrabri region.

They quoted ‘experts’ who claim that there is no way, with all the steel tubing and concrete plugging in the world, that you can guarantee there will be no leakage from wells into their precious water tables.

When challenged to produce peer-reviewed research, they very reasonably explained that they’d asked Santos for funds to do this research, without success.

They were quick to also point out that there were plenty of statements about the environmental safety of Santos operations which hadn’t been peer-reviewed either.

With the passing of a few days, Ken Borda’s face has diminished in my imagination, and I feel more able to hear the Australasian Centre for Corporate Responsibility’s insistence that corporate democracy, such as I had witnessed at his AGM, remains an opportunity not to be missed.

When I turn my thoughts to our national budget, I find myself asking, what equivalent opportunity would we have to put our own arguments to the PM about the recent federal budget’s denial of services and opportunities to the young, the unemployed and the sick?

And yet our continued lack of attention on companies such as Santos, who plunder our land of energy for short-term profit, will perhaps have more long-term and deleterious effects on our planet’s future than the state-federal tussle over education and health funding, now our national focus.

For those interested in what’s really happening to this country’s wealth, I recommend attending the AGM of any company in which you are a shareholder.

Then have a look here. www.ceres.org/investor-network/resolutions. Filter for oil and gas resolutions in 2014, to Santos’ US cousins in oil and gas. Thirty-five such resolutions were filed this year.

You’ll see on average around a third of US shareholders voting at the AGMs of Phillips, Marathon, Energen, EOG, Spectra and Valero do not share Ken Borda’s passion. Instead they voted in support of their oil and gas companies adopting concrete targets for greenhouse gas reductions.

So it’s worth asking questions and speaking to resolutions. You might even negotiate to appear on the giant screen in person.

* Jill Sutton is the Convenor, Executive Committee, Australasian Centre for Corporate Responsibility.