John Browne: Why we will no longer fund political parties

Taken from a lecture on Anglo-American relations, delivered by the chief executive of BP at Chatham House, London

The oil industry has always been international – driven by the location of resources and the need to bring those resources to market. International though, has not always meant global. Now the pattern of trade is changing, and companies have had to adjust both to the new distribution of activity and to the challenge of scale which that requires. Twenty per cent of the existing world demand for oil and gas is now in Asia. And even more important, more than 50 per cent of the growth in demand each year comes from the region.

Changes like that mean that it isn't possible to be a leading player unless you have a global reach. Globalisation is a very beneficial process, but it is also an agent of what Paul Samuelson called creative destruction. Globalisation challenges protected niches, and established patterns of activity. It is disruptive, and in places where the adjustment mechanisms are imperfect or non-existent, it produces casualties.

The speed of change over the last five to 10 years has inevitably led to resistance, protest, and intensified scrutiny. The development of the global economy and global companies has been matched by the development of global politics and of global campaigning. There are now at least 25,000 thousand international non-governmental organisations, religious and secular, working on a variety of issues from human rights to the environment.

Such organisations may not have the turnover of the big companies, but some have a comparable reach. The World Wildlife Fund has 4.5 million supporters, Amnesty over 1 million. A tiny minority of campaigners are violent and throw stones in Genoa or Seattle, and an even smaller minority threaten the lives of individuals. Most are peaceful, deeply committed to their cause, and often very well organised.

Peaceful or otherwise, they all have an intensive interest in the activities of global companies – sometimes because we are symbols of all they believe to be wrong, sometimes because we can be the agents of the changes they want to see.

It is a mistake sometimes reflected in media coverage to think that companies and NGOs are locked into an immutably hostile relationship. That isn't true. Companies benefit from scrutiny and challenge. In many cases, the work we do – on the environment, on development and on human rights – would be impossible without the active assistance of NGOs.

Just as it is important to understand the proper relationship between companies and NGOs, so it is important to understand the proper relationship between companies and government.

Without government human progress is impossible – because government provides the structures and the security which underpin trust. But though companies may not be as powerful as some people think or fear, companies do still have the ability to make choices, to apply resources – to make things happen.

We can't deny that power, and therefore we must make sure it is used with the greatest care. We have to remember that however large our turnover might be, we still have no democratic legitimacy to determine how society will develop.

We have a very important role in society, but we mustn't confuse our role with the roles of others. In particular we must be particularly careful about the political process, not because it is unimportant – quite the reverse – but because the legitimacy of that process is crucial both for society and for us as a company working in that society.

That's why we've decided, as a global policy, that from now on we will make no political contributions from corporate funds anywhere in the world. We'll engage in the policy debate, stating our views and encouraging the development of ideas – but we won't fund any political activity or any political party.