AMEC Plc

A Corporate Profile

By Corporate Watch UK
Completed May 2002

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Corporate Crimes

1. Bigger = Better
2. Defence - 'Serving the War Industry'
3. Nuclear Energy - Threatening all Life Forms
4. Oil and Gas
5. Biotechnology - Gambling With the Building Blocks of Life
6. Dam Building
7. Supporting Oppressive Regimes
8. PFI - Selling off Public Utilities
9. Greenwash
10. Supporting the Pulp and Paper Industry
11. Gold and Diamond Mining
12. Aboriginal Awareness Training

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AMEC serves industries that pose serious threats to people's well-being and the planet's health. Defence, nuclear energy, oil and gas, biotechnology, mining and dam building are among the industries that AMEC is happy to support, as long as the company secures profits. The Corporate Crimes listed below suggest that AMEC does not take much time to question the morale of the projects it takes on.

1. Bigger = Better

AMEC is pushing for enormous and prestigious projects (roads, airports, dams, etc) at high social and environmental costs. Through their lobby groups construction companies try to pave the way for large infrastructure projects (they don't call for more bicycle lanes, for example, or support local public transport schemes), arguing that more roads, airports and big energy projects boost the economy and bring in more wealth.

2. Defence - 'Serving the War Industry'

The UK Ministry of Defence is amongst AMEC's major clients (see the Links With Government section). The company also works for the Canadian Department of National Defence, the American Department of Defence, the American Airforce as well as for Arms Manufacturers such as British Aerospace. AMEC contributes to war efforts, but might not feel too bad about this, since the company can ease its conscious by helping to clear up the mess left behind by its clients' bombs, and make big profits in the process.

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3. Nuclear Energy - Threatening all Life Forms

Both British Energy (UK's largest nuclear generator) and BNFL (British Nuclear Fuels, a provider of products and services to the nuclear industry worldwide) are among AMEC's clients. AMEC presents itself as a 'green' company though, preferably keeping a low profile about its support for the nuclear industry, whilst emphasising its support for wind energy. AMEC and British Energy's joint project to build the world's largest wind farm draw loads of media attention.

The UK government believes nuclear energy is needed to meet Britain's energy needs, and to reach the targets set in the Kyoto Protocol; reducing carbon dioxide emissions. Many disagree on this. First of all, nuclear energy has proved to be positively dangerous. The radioactive waste products of nuclear energy will have to be contained and stockpiled for centuries, buried securely, heat and pressure alloyed into glass, so that they cannot leach into water supplies or the air. Nuclear power is not clean and it is not safe. Furthermore, the goal of reducing carbon dioxide emissions can only be met by cutting back substantially on industrial activity and output and lowering the UK’s exorbitantly high levels of transport and consumption. Many experts believe that Britain can meet its energy needs, without having to rely on nuclear energy.[cxxi]

Sellafield Nuclear Plant
AMEC has been working at BNFL’s giant Sellafield nuclear plant in North-west England, and was awarded a prestigious safety prize for maintaining a safe working environment on a major facility. What about the natural environment? From its Sellafield plant BNFL discharges radioactive waste into the sea, BBC news reports. Ocean currents carry small traces of radioactivity from the plant's waste pipe on the Irish Sea coast across to Scandinavia, and it has been detected in shellfish and seaweed in Norway.[cxxii]

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4. Oil & Gas

The oil and gas industry accounts for 25% of AMEC's profits (see section on AMEC's Projects). AMEC is the world's biggest oil and gas industry services provider, having contracts with corporate giants such as BP, Shell, and Exxon-Mobile. These companies are involved in numerous crimes such as depleting the world's resources at enormous speed, severely polluting the environment, exploiting Third World countries, fuelling armed conflicts and supporting human rights abusing regimes. In addition, oil and gas companies have high stakes in nuclear energy, and are major contributors to climate change.

5. Biotechnology - Gambling with the building blocks of Life

AMEC provides its clients ‘with the engineering expertise and support they need in order to succeed in the global pharmaceutical, biotechnology and chemical industries’.[cxxiii] The company has delivered services to 15 of the top 20 organisations in these sectors, including Abbott Laboratories, AstraZeneca, Aventis, GlaxoSmithKline, Bayer, Pharmacia, Novartis, Merck Inc, Eli Lilly and PPL Therapeutics (World-famous because of its cloned sheep Dolly); All of these companies are involved in biotech experiments (and many of them are actively pushing genetically engineered food onto the market), carrying unacceptably high risks in terms of environmental and human safety.

More information regarding AMEC's support for biotech and chemical companies can be found on its PharmaChem microsite at: http://www.amec.com/pharmachem

A full list of AMEC's clients in this sector can be viewed at: http://www.amec.com/pharmachem/whatservices.asp?pageid=225

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6. Dam building

Yusufeli dam
AMEC is involved in highly controversial dam projects in Turkey (the Yusufeli dam) and Belize (the Chalillo dam). The dam projects, supported by the British and Canadian government respectively (see the Links With Government section), will displace thousands of people and flood vast areas of precious habitat. AMEC pulled out of the planned Yusufeli dam in Turkey after environmentalists said it would be the target for protests. According to The Independent, the move by AMEC avoided a big embarrassment for the British government, which had been asked to underwrite the firm's involvement in the £590m scheme.[cxxiv] However, AMEC is still morally involved in the project via their 46% shareholding in SPIE. SPIE is leading the consortium contracted to build the Yusufeli dam.

Chalillo dam
AMEC’s Canadian arm (via its merger with Agra Inc) carried out the Environmental Impact Assessment for the proposed Chalillo Dam on the Macal River in Belize. The company was paid nearly $500,000 Cdn for this contract. Previous environmental impact assessment and feasibility studies conducted by Agra subsidiary, Agra CI Power, had been rejected as inadequate by Belize’s environmental department. The dam is planned to be built by Belize Electricity Limited, majority owned by Canadian company Fortis, Inc who will earn more than three quarters of a billion dollars (Cdn).

The Macal River Valley is on of the most pristine natural areas in Central America and its remoteness means it has largely been spared human disturbance. Consequently it is home to many threatened and endangered species whose habitats have been severely disrupted, destroyed and fragmented elsewhere in the region. These include a population of 60-100 scarlet macaw (subspecies of parrot with a worldwide population of less than 1,000), Baird’s tapir (Belize’s national animal - an ancient relative of the horse), jaguar, ocelot, Morelet’s crocodile and howler monkey. The habitat type in the river valley exists in less than 0.1 per cent of Belize and the dam would destroy about 80% per cent of this.

Studies have also shown that the Chalillo Dam isn’t economically sensible as the costs will exceed the benefits. The Mollejon dam - a dam upstream of Chalillo and also owned by Fortis, has produced less energy than predicted. Other cheaper forms of electricity, such as bagasse produced as a by-product of Belize’s sugar cane industry, could produce twice as much energy than the Chalillo dam as well as supporting Belizean industry.

AMEC’s commissioned the Natural History Museum to analyse the impact of the dam on wildlife. In their report, scientists from the Museum concluded that “the project is likely to cause significant and irreversible reduction of biological diversity in Belize, initially at the population level but later potentially at the species level, some of the species affected being of international importance”.

Their report said that “[i]t will not be possible to mitigate against the long-term impacts on the biodiversity of the catchment, particularly those associated with habitat loss, if the dam is constructed as planned. Equally, it will not be possible to mitigate against the impacts at a broader regional level.” They “highly recommended [that] for the “long term viability and conservation of wildlife in Belize” the dam is not built.

AMEC has been accused of attempting to bury the report, including it only as an appendix to their five volume EIA and dismissing it as being influenced by environmental groups.
AMEC’s EIA has also been criticised by geologists as being “gravely flawed and so filled with errors so as to render it useless as a document for engineers to use in the design and the construction of the proposed dam. The mistakes made by AMEC in the geological mapping of the Chalillo site would get a failing mark in an introductory geology class”.[cxxv]

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7. Supporting Oppressive Regimes

AMEC works with Turkey (see theYusufeli dam above), China, Indonesia and Nigeria. These countries are all classified by Ethical Consumer magazine as Oppressive Regimes. Their classification is based on a ranking system devised by the Observer, and is based on a range of indicators such as ‘use of torture, political prisoners, denial of religious freedoms and extra-judicial killings.’[cxxvi]

In China, AMEC is to design and construct a £1.9 billion petrochemical plant, which will be one of the largest overseas investments to be made in China. The plant will be built near Shanghai for Shanghai Seco Petroleum Company, a three-way venture between BP, Sinopec and the Shanghai Petroleum Company. AMEC's subsidiary AGRA also assisted the Chinese government with the displacement of 1.2 million people to make way for the Three Gorges Dam.[cxxvii]

In Indonesia, where the pulp and paper industry is destroying rainforest at an astonishing rate, AMEC has built the world's largest pulp mill. AMEC also works with oil producers in the country. In Nigeria, AMEC recently secured a contract from Shell, the company which gained world fame because of its human rights violations against activists Ken Saro-Wiwa and John Kpuinen.

In Angola, Hyundai Heavy Industries has subcontracted the design and management of a deep-water crude oil production facility to Fluor Daniel / AMEC alliance (AFD). The facility, claimed to be the world’s largest, belongs to Esso Exploration Angola Ltd., a subsidiary of ExxonMobil Corp.[cxxviii] In what it called a rare briefing to the UN Security Council, Human Rights Watch accused the Angolan government and the United Nations of not doing enough to protect more than 4 million people who have been displaced in Angola's long-running conflict.[cxxix]

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8. PFI - Selling off Public Utilities

Closer to home, AMEC is in bed with the British government through its Private Finance Initiative (PFI) scheme. PFI is Labour's preferred way of delivering new hospitals, roads and schools by selling these public utilities off to the private sector. As a consequence, AMEC's Investment Division, which consists mainly of its Public-Private-Partnerships prospers. AMEC was responsible for building the country's first PFI hospital, the Cumberland Infirmary in Carlisle, which was triumphantly opened by Tony Blair in June 2000. It has subsequently been heavily criticised for being 'gloomy, filthy and chaotic.'

AMEC is one of Railtrack's biggest contractors, and will benefit from Blair's decision to make additional investments in the railways. The company has also built a number of roads and airport terminals. AMEC welcomed the government's approval for airport operator BAA to proceed with the development of a new fifth terminal at London's Heathrow Airport. It is currently helping BAA to develop the terminal's concept design. AMEC also works with British Waterways and British Energy on various projects.

The country's most powerful construction companies are keen to see the PFI schemes progress. According to the Observer, they have even warned the government that the PFI programme is undeliverable unless the process is speeded up. The Major Contractors Group (MCG), which includes AMEC, Carillion and Bovis Lend Lease, wrote to the Treasury and to health minister Alan Milburn expressing its concerns. The MCG is arguing for the standardisation of contracts and design so that the process of building hospitals, schools and prisons can be speeded up. Senior officials at the Office of Government Commerce, through which all-major state expenditure is funnelled, say that the MCG's concerns are 'receiving urgent attention'. Their desire for more contracts is understandable, given that building consortia can enjoy returns of up to 30% during the lifetime of a project. An Observer investigation also revealed that a significant number of construction firms were refinancing bank loans, taken out on projects at reduced rates, and pocketing tens of millions of pounds.

PFI is besieged by critics who claim that hospitals and schools are often poorly designed, cramped and massively expensive. As companies focus on profit maximisation, services, such as basic healthcare, can be appalling. To counter criticism, the British government hired Bell-Pottinger, the PR firm owned by Margaret Thatcher's PR guru Tim Bell, to assist the Public Policy Forum (PPF) in its promotion of PFI. The Public Policy Forum (PPF) represents companies (including AMEC, Balfour Beatty, Bank of Ireland, PriceWaterhouseCoopers, and Deutsche Bank) hoping to win PFI contracts, with a brief 'to promote the benefits of PPP's (Public-Private Partnerships). AMEC CEO Peter Mason is among the fiercest defenders of the PFI scheme. This is hardly surprising, given the amount of money that AMEC have received so far through PPPs. He argues that all the issues raised by critics are outweighed by the private sector completing projects more efficiently and at lower costs.[cxxx]

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9. Greenwash

AMEC presents itself as a green, caring company, stressing its commitment to renewable energy (whilst supporting the oil, gas and nuclear industries) and sustainable development (whilst supporting highly destructive practices such as logging, mining, pipeline and dam building). In recent years AMEC has also boosted its numbers of environmental staff, offering its services to other companies as an environmental consultant. But -considering AMEC's work on the Chalillo dam (see above) for example- it seems legitimate to ask oneself whether AMEC's consultants are good people to be doing consultancy work for other companies given AMEC's own environmental record.

10. Supporting Pulp & Paper Industry

AMEC has built the biggest pulp mill in the world, in the Sumatran province of Riau, Indonesia. The pulp mill is owned by Singapore-based Asia Pacific Resource Holdings Ltd, which has borrowed heavily from Western banks to finance its operations. According to a Friends of the Earth report[cxxxi], the Indonesian pulp and paper industry is destroying rainforest at such an astonishing rate that it will run out of wood in five years.[cxxxii]/[cxxxiii]

11. Support for gold and diamond mining

AMEC have just secured a contract with De Beers in Canada. The diamond trade, most of it illegal, plays a major part in the wars or shaky peace in Sierra Leone, Liberia, Angola and Congo. Until the 1980s, De Beers was directly involved in Sierra Leone, had concessions to mine diamonds offshore, and maintained an office in Freetown. Since then, however, the relationship has been indirect. Some argue it is virtually inconceivable that the De Beers is not - in one way or another - purchasing diamonds that have been smuggled out of Sierra Leone. [cxxxiv]

12. Aboriginal Awareness Training

AMEC Annual Report and Accounts 2000:
'In Canada, renewed activity on land claims and treaty settlements has increased opportunities for companies to work with aboriginal groups. Resource companies have learned that it is sound business practice to develop aboriginal policies and partnerships'.[cxxxv]

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References
[cxxi] A £9bn investment in Britain's nuclear industry will not solve the problems of climate change, writes John Vidal, The Guardian, 7 March 2002, See: <www.guardian.co.uk/nuclear/article/0,2763,663482,00.html> accessed 21 April 2002
[cxxii] 'Sellafield waste row escalates', BBC News, 21 March 2002, BBC website: http://news.bbc.co.uk/hi/english/world/europe/newsid_1884000/1884572.stm accessed 21 March 2002
[cxxiii] AMEC Annual Report and Accounts 2000
[cxxiv] 'Construction giant drops controversial dam plan', by Saeed Shah, The Independent, 14 March 2002, The Independent website: http://news.independent.co.uk/world/environment/story.jsp?story=274232 accessed 21 March 2002
[cxxv] Hannah Griffiths (2002), Friends of the Earth, UK. Hannah Griffiths has written an article on AMEC and dambuilding, which will be published later this year (2002) in a book following up ‘Dams Inc.’ (February 2000), A Report by The CornerHouse, Chris Lang, Nick Hildyard, Kate Geary, Matthew Grainger, Published by The Swedish Society for Nature Conservation. ‘Dams Inc.’ can be viewed online at: <www.rivernet.org/general/dams/dams_incorp.htm> (source: European Rivers Network), accessed 22 April 2002
Articles on AMEC and the Chalillo Dam:
Pearce, F. (2001) Impact of Belize dam in dispute, New Scientist, 9/12/01, see: <www.mindfully.org/Water/Belize-Dam-Dispute.htm>
See also: <www.probeinternational.org/pi/print.cfm?ContentID=2986>
Ryder, G. (2001) Letter to Canadian Minister of Foreign Affairs, John Manley, Probe International,12/10/01 <www.probeinternational.org/pi/index.cfm?DSP=content&ContentID;=2734>
CIDA report dismisses scientists' warnings of species extinction', Probe International, Press Release, 20 September 2001: <www.probeinternational.org/pi/index.cfm?DSP=content&ContentID;=2588>
Re: Upper Macal River Valley, Belize', Letter to H. Stanley Marshall, President and CEO, Fortis Inc, 22 April 2001: <www.ryakuga.org/belize/letter.html>
[cxxvi] Harrison, R. (2001) Oppressive Regimes? Ethical Consumer: 69:19
[cxxvii] Montreal Gazette, 26 July 1994, p.D5, D6
[cxxviii] 'Fluor building FPSO', Hydrocarbon Processing, December 2001 Vol. 80 No. 12 , Construction, Hydrocarbon Processing website: www.hydrocarbonprocessing.com/archive/archive_01-12/01-12_construction.html accessed 29 March 2002
[cxxix] Read more at: www.unwire.org/unwire/2002/03/06/current.asp#24383 <www.unwire.org/unwire/2002/03/06/current.asp>
Angola: Human Rights Watch Briefs Security Council', source: UN Wire, an Independent News Briefing About the UN
[cxxx] News articles mentioning AMEC and PFI:
'Filthy, gloomy and chaotic: the reality of a new NHS', by Anthony Browne, The Guardian, 8 July 2001: http://society.guardian.co.uk/privatefinance/story/0,8150,518940,00.html
'Bed crisis - in August?', by Nick Mathiason, The Observer, 27 August 2000:
http://society.guardian.co.uk/privatefinance/story/0,8150,393580,00.html
'Lib Dems round on PFI "chaos"', by Lucy Ward, The Guardian, 22 August 2001:
http://society.guardian.co.uk/privatefinance/story/0,8150,540680,00.html
[cxxxi] Published on 11 February 2002
[cxxxii] www.guardian.co.uk/Archive/Article/0,4273,4353504,00.html
[cxxxiii] Read more:
-www.guardian.co.uk/Archive/Article/0,4273,4353504,00.html
('Indonesian rainforests pulped to extinction', The Guardian, 11 February 2002)
-http://dte.gn.apc.org/52plp.htm
('APP and debt-financed forest destruction', Down to Earth No. 52, February 2002)
[cxxxiv] 'About the study "The Heart of the Matter: Sierra Leone, Diamonds and Human Security", by Ian Smillie, Lansana Gberi, and Ralph Hazleton, Partnership Africa Canada, January 2000, website: www.africaaction.org/docs00/sl0001.htm accessed 28 March 2002
[cxxxv] AMEC plc Annual Report and Accounts 2000