TradeEdge-Marathon Reaches Deal with Investors on Human Rights. Standing Rock Hoped for More.

In the face of mounting pressure from investors and TradeEdgethe glare of public scrutiny, Marathon Petroleum Corp. officials acknowledged that the company has a responsibility to address environmental and social risks—including potential violations of the rights of indigenous people.

However, in an agreement signed Friday with a block of shareholders, the oil company also said that the ultimate responsibility for protecting human rights lies with government regulators. Human rights activists described the concessions as superficial and said the lack of binding requirements could allow the company to continue with little reform.

Shareholders in the Ohio-based company turned up the heat after seeing the treatment of the Standing Rock Sioux Tribe and others protesting the Dakota Access pipeline, a project Marathon bought into just as tensions were boiling over in 2016.

A group of shareholders led by the New York State Comptroller’s Office filed a resolution pressing the company to consider environmental and human rights issues when assessing risks associated with acquisitions, and to report back on those practices.

“The construction and operation of energy infrastructure in North America requires respect for rigorous standards of environmental review and the human rights of Indigenous Peoples,” the resolution states.

Under the agreement, the resolution will be withdrawn once the company makes good on its pledge to add a topic—“Human Rights and Core Values”—to its website to address the issue. The company said this will enhance disclosures that include how its values and conduct relate to indigenous people and the environment.

The company also promised to include in its annual Citizenship Report a section addressing social matters that is consistent with the United Nations guidelines addressing the rights of indigenous people.

“We respect the human, cultural and legal rights of all individuals and communities,” Marathon said in the agreement. “Our commitment extends to the fair treatment and meaningful involvement of all people, including indigenous people, regardless of race, color, national origin or income level.”

Marathon: Government Is Responsible for Protecting Human Rights

Yet the company says much of the responsibility for protecting human rights and ensuring the rights of indigenous people in the United States rests with federal and state governments.

“There are robust permitting processes for energy facility and infrastructure projects that provide a means of public comment and participation, and judicial oversight is of course a hallmark of our domestic system of government,” the company says in the agreement.

A spokesman for Marathon did not respond to a request to elaborate.

Shareholders Say It’s ‘A Step Forward’

Although not a complete victory for the shareholders, the comptroller’s office said the agreement represents “a step forward.”

“The company has publicly acknowledged its corporate responsibility above and beyond the legal requirements imposed by federal and state governments,” said Matthew Sweeney, assistant communications director for New York State Comptroller Thomas DiNapoli.

“It has also agreed to ongoing dialogue with stakeholders concerning the issues raised by the resolution,” he said. “We will continue to work with stakeholders to hold the company accountable for the impact of its operations.”

Human Rights Activists Disagree

It’s a superficial agreement that does not make a genuine commitment to addressing the rights of indigenous people, said Jodi Gillette, a member of the Standing Rock tribe and former adviser to President Barack Obama on Native American affairs.

She also called it disingenuous for Marathon to say the federal government will act as a check-and-balance. Federal authorities ultimately approved the Dakota Access pipeline route without having to consult the tribe, she said.

“If Marathon Petroleum continues down the path of assuming the United States will respect our people, then their current course of action is insufficient and unfortunately will result in future dehumanization of indigenous people,” Gillette said.

She said she appreciates the willingness of Marathon to engage on issues relevant to indigenous people, but there has to be some assurance it’s more than just talk.

Marathon Fought Resolution Last Year

The company fought a similar resolution last year that nonetheless gained approval from 35 percent of its shareholders.

Preparing the kind of reports sought through that 2017 resolution would have required a carefully tailored study of projects under consideration, the company argued in its proxy statement at the time. “Providing a report of the nature the proponent seeks would require [Marathon] to present an incomplete and potentially misleading picture of prospective strategic transactions,” Marathon said.

The company reasoned that its community engagement program provided a forum and allowed adequate opportunity for any group to make criticisms known, according to the proxy statement.

Along with holding the company accountable for human rights, shareholders feared any future confrontations, such as happened with the Standing Rock tribe over construction of the Dakota Access pipeline, could damage Marathon’s reputation, resulting in a loss of stock value.

In partnership with Enbridge, Inc., Marathon bought a minority interest in the Bakken pipeline system that included Dakota Access as tensions between pipeline opponents and backers were rising.

Shareholders in Enbridge, a Canadian pipeline company that owns more than 10,000 miles of pipelines in Canada and the United States, filed a similar resolution last year. Although the resolution was defeated, the company said it would expand its disclosures to shareholders about how it addresses human rights and indigenous people.