NOVEMBER 1980 - VOLUME 1 - NUMBER 10
"Multinationals have left a trail of broken promises, bad deals, kick-backs, and deep resentment." So said Malaysian finance minister; Tengku Razaleigh, last May. If recent allegations are true, Exxon corporation's Malaysian subsidiary may be adding to the bad image of multinationals in this far eastern country.
Lim Kit Siang, a leading figure in the small socialist opposition party, has accused Esso Production Malaysia, Inc. (EPMI) of taking 23,000 barrels per day of oil in excess of its limit. Lim calculated that this alleged overproduction, said to have occurred in the summer of 1979, cost the Malaysian government U.S.$380 million.
Citing additional irregularities, Lim charged EPMI with "shoddy workmanship, adoption of improper work procedures, substandard designs and fabrications which cost tens of millions of dollars, and tens of millions of dollars to correct-all eventually paid for by Malaysian crude oil."
For its part, EPMI-which produces nearly half of Malaysia's oil--categorically denies any wrongdoing, and has filed a libel suit against Lim. "The allegations are preposterous," a spokesperson for EPMI said.
Lim's allegations put the government in an awkward position. It does not wish to appear negligent in its enforcement of production-sharing regulations. At the same time, it can scarcely reprimand EPMI without embarrassing itself, for the government's own oil company, Petronas, is responsible for overseeing the operations of foreign oil companies in the country. The Malaysian government has looked into the charges, but has held no official inquiry, and has levelled no accusations against EPMI.
Lim, however, appears in no mood to back down. Taking EPMI as an example of multinational excesses in the energy field, he said in Parliament in October: "Although we are host to multinational corporations and are babies in the oil industry we are zealous in protecting out birthright as represented by our oil and gas reserves."