Boycott Petroleum Geo-Services (PGS) Capital Markets (25 July 2016)

The Moral Imperative and Responsibility not to Invest in Corrupt Enterprises

An international corporation like PGS is built of many people across many nations. Our business affects and impacts on even more. If you are one of them, then I would be very interested to hear your views on how we can continue to improve – whether you are a PGS employee, customer, shareholder or other stakeholder.

Jon Erik Reinhardsen, CEO Petroleum Geo-Services (PGS)

A word of advice to those who are striving for a reputation of integrity: Avoid those who are not trustworthy. Do not do business with them. Do not associate with them. Do not make excuses for them. Do not allow yourself to get enticed into believing that “while they may be dishonest with others, they would never be dishonest with me.”  If someone is dishonest in any aspect of his life you can be guaranteed that he will be dishonest in many aspects of his life.

Amy Rees Anderson, Success Will Come and Go, But Integrity Is Forever

PGS Executives are too Comfortable with Silence, Secrecy and Deception as a Business Practice to Provide Investor Confidence

PGS Compliance Hotline Team and Audit Team members are routinely provided with these concerns and posts for comment and action.

Capital markets provide the opportunity for organizations to buy and sell debt instruments and channel savings and investment between suppliers of capital.  For several months now the marine seismic sector has worked to attract investors.  The marine seismic market is very precarious these days and investors need to consider any capital investment very carefully.  I have written several different pieces on LinkedIn™ (LI) highlighting the prevailing 3D marine seismic streamer market conditions during the past few months.  I have also written about PGS executive management.  Social media, such as LI, aimed at professionals has been an invaluable platform to post and share original content that is viewed by a broad audience of professionals.  Thousands of individuals from different countries, industries, sectors and companies have been able to read and respond to these posts.  This has included Petroleum Geo-Services (PGS) executive decision makers, employees, customers, shareholders, and stakeholders.  Before continuing, I will state that I am more loyal to PGS stakeholders than PGS CEO Jon Erik Reinhardsen, if one qualifies loyalty as being honest and adhering to the Core Values, Codes of Conduct, and policies while representing and promoting PGS products and services to clients and potential customers. I never knowingly deceived stakeholders nor bullied, cheated, and undermined colleagues working to serve customers.  I believe such practices to be inane and bad for business.  Further. I could advise in stronger internal governance and compliance processes, if it were in the interest of PGS. But, it is not and stakeholders and investors should understand this. 

I worked for PGS around the globe for over fourteen years, but do not any longer.  Reinhardsen was the third CEO to preside over the company through my years of employment.  There is very little for any whistle blower to gain from deception and distortions.  By action and words, several concerns have been presented with supporting evidence.  I have adhered to the PGS published responsibilities, Codes of Conduct, and Core Values not only while I was employed by PGS globally, but continue to do so now because values really should have no company agency boundaries.  No PGS executives, nor board members, have rose to their call of duty, born from their agency and received benefits, to thoroughly investigate the several matters of concern which have been illuminated.  Not one PGS agent has answered or thoughtfully investigated queries, much less been held accountable.  Not one.  They have tried to silence criticism and not investigate senior executive malfeasance.  I have written several articles illuminating these concerns since 3 July 2015.  There is no internal accountability for breaches of conduct, policy, or laws.  Internal governance and compliance for senior decision-makers is dysfunctional.   

The deceptions by PGS executives only continue and multiply. These agents have been named in print several times:  Jon Erik Reinhardsen, PGS President and CEO; Per Arild Reksnes, EVP Operations (Contract); Rune Olav Pedersen, EVP General Counsel; Terje Bjølseth, SVP Global HR; John Greenway, SVP Marine Contract; Simon Cather, Marine Contract Regional President – Africa; Edward Von Abendorff, VP Marine Contract Sales – Africa; John Barnard, Contract Sales – Africa; Carl Richards, Head of Legal (UK); David Nicholson, EAME HR Manager (retired); Laura Haswell, HR Officer; Anna Stokle, HR Officer; Gareth Jones, HR Officer; Ben Kelly, Associate Counsel.  Nevertheless, the numbing silence and hiding of corruption continues to proceed unanswered to the collective detriment of PGS and the majority of its honest stakeholders.  The bad publicity compromises PGS company reputation and market value. In addition, the corporate silence compromises my professional reputation by design. The silence from top-executives and board members is fundamentally dishonest and disparaging because they know the truth.  Everyone named is an adult and has access to the PGS Code of Conduct as well as UK laws and should understand very well what they are participating in.  Within a previous LI post,Boycott Petroleum Geo-Services (PGS)stakeholders were pointed to consider the moral imperative of conducting business with an enterprise that is corrupt.  The prose encouraged customers and stakeholders to conduct a thorough due diligence of PGS through reviewing my claim.  There must be greater vigilance in the vetting of companies for capital markets investment.  Investing into companies whose agents obfuscate transparency are perceived as untrustworthy and therefore higher risk.  There is already a substantial uncertainty in the marine seismic market.  There are responsible reasons to fathom even higher risks attached to PGS.    

Some have thought such prose destructive to PGS.  They are aimed at management whose actions continue to be destructive to PGS, the market, and profession.  On the other hand, what recourse have the righteous against the empowered corrupt but voice?  “I have friends who work for PGS, they declare.”  Suggesting what?  They add, “You may not be employable in the industry.”  Which is actually a principal objective of the corrupt mobsters.  Through workplace mobbing, the corrupt bullies dispose of the righteous and strong through sabotage and defamation.  It is accomplished through the abuse of position, deception, manipulation, fraud, forgery, and contract breaches.  And surrounding themselves with silent cronies to keep it all under wraps.  Loyalty to PGS is actually not protecting wrong-doers.  Loyalty to friendship perhaps.  But, any constructive support of corruption, including bullying, is aiding and abetting.  Any reward for such loyalty is tantamount to a bribe given for looking the other way or being actively engaged with the mob.  What kind of a friend steers one to wrong-doing but an accomplice?  I chose to be loyal to PGS, not their corrupt agents. Outing corruption is for the long-term benefit of PGS and the majority of stakeholders.  It is especially done for the honor and integrity of the market and the true professionals who serve it during times of layoffs and restructuring.  But, if this is seen as a bad thing, then the professionalism in it all is lost. Corruption is only beneficial to the few.  It is corrosive, unpredictable, and destructive to the many.  Always.  The loyal call-out wrong-doing.  It is what we all know is expected to be done from the Code of Conduct and Core Values.  It is what trust and fair-play is all about. It is the right thing to do!  The punishing of whistle-blowers is actually reprehensible to the fair-minded and fair-market.  But, corruption takes so much more away from the enterprise as well.  Aligning with those who abuse their position of trust and agency to mob and bully to protect their wrong-doing is a vile kind of moral bankruptcy.  The real issue is that the cat has been out of the bag for some time.  Ample time to soul-search and do the right-thing has been given.  But, since my voice has been supported with evidence which needs to be explained and not just piping-off allegations, the only explanation for the lack of engagement is that there is truth in the allegations which make one fear accountability more than ridicule.  It is just the opposite for the righteous accuser.  No one really wants to be wronged, bullied, or become a whistle blower.  It just isn’t pleasant.  The corrupt will always hold-on to what they have until it is taken away by a higher authoritative power.  When internal compliance and governance is ineffective, it must be remedied externally.

Corruption is the misuse of latitude, power, or authority to receive illegitimate or illegal benefits for single employees, group of employees, or organizations.

Ashforth and Anand.

Hypocrisy is not a way of getting back to the moral high ground. Pretending you’re moral, saying your moral is not the same as acting morally.

Alan Dershowitz

Management consultant and author Dr. Peter Drucker is often quoted, “Culture eats strategy for breakfast.”  When stakeholders study companies, they learn about both culture and strategy that is intended to impress them enough so that they will want to invest their capital, time, and expertise into the company.  Within the published PGS Letter from CEO and Codes of Conduct, which is posted on the PGS company website, Reinhardsen, introduces PGS’ Corporate Responsibility which outlines the company commitment to employees, customers, shareholders, and other stakeholders.  PGS corporate responsibility includes statements of PGS Corporate core values, vision, Codes of Conduct, health, safety, environment, and quality – PGS’ self-described corporate identity and culture.  Within the Letter from CEO Reinhardsen states that he would be very interested to hear about how PGS could improve in their commitments to adhere to these ideals.  Well, Jon Erik Reinhardsen, President and CEO of PGS, in fact there a several concerns and ways that PGS could improve.  There has been quite an effort to bring many of these issues to your attention directly! 

Previous PGS focused Articles:

  1. An American, the UK Data Protection Act, Petroleum Geo-Services and the Tyranny of “Accurate Data” (03-Jul-2015)
  2. When Human Resources is Corrupt – Why it Matters in the Seismic Industry (10-Aug-2015)
  3. Petroleum Geo-Services CEO Jon Erik Reinhardsen Should Resign (06-Sep-2015)
  4. Petroleum Geo-Services CEO Jon Erik Reinhardsen Should Resign II – Evidence (20-Sep-2015)
  5. The SEG Should Expel PGS CEO Jon Erik Reinhardsen (11-Oct-2015)
  6. Workplace Bullying is an Agency Problem and Often a Crime (1-Feb-2016)
  7. Petroleum Geo-Services Markets and the Anonymous Executive (9-Feb-2016)
  8. Petroleum Geo-Services (PGS) and the Veneer of Governance (8-May-2016)
  9. The Petroleum Geo-Services (PGS) Ambush Meeting and the Definition of Fraud (24-May-2016)
  10. Petroleum Geo-Services (PGS) Mob Values (14-Jun-2016)
  11. Boycott Petroleum Geo-Services (PGS) (22-Jun-2016)
  12. Petroleum Geo-Services (PGS) Mob Gaslighting (30-Jun-2016)

The calls go unheard and there is no action.  PGS shows no compunction in demonstrating their unwillingness and incompetence in addressing issues concerning simple contracts.  This cannot assure stakeholders of anything, except perhaps lack of integrity.  It is from within his Letter from CEO where the deception has its beginning, and also from where stakeholders can conclude that Reinhardsen is a charlatan who presents himself as an accessible CEO presiding over a transparent and ethically managed company.  How loud must the alarm be for executives or board members to take action?  And how blind and deaf must these executives believe customers and investors to be?

The moral of The Wolf in Sheep’s Clothing is that appearances are deceptive.  In my mind, Reinhardsen and his clan are grifters who preside over an organization which enables, promotes, and enriches a corrupt executive hierarchy.  One doesn’t need to be a Sherlock Holmes to validate this.  Reinhardsen has the authoritative power to address the many issues and allegations directly and responsibly by himself or through his executive management team.  The issues are not complicated.  However, to address these allegations properly requires character, integrity, and strong moral leadership.  Or, simply adhering to the commitments stated within his Letter from CEO, and the pages on the PGS website.  But, Reinhardsen is both a weak CEO and accomplice to the corruption who allows executives to transgress PGS policy and national laws.  He exerts no moral authority. Reinhardsen lacks the ethical courage to follow the script of the role he presents and promises to stakeholders: to do the right (and legal) thing.  He and his team are not trustworthy.  And this is why it matters to capital markets.  

Due diligence is the process of investigating the information associated with a particular transaction, so that all parties are aware of the material issues. 

Det Norske Veritas AS, Managing Risks 5/2012

A coward, a man incapable either of defending or of revenging himself, wants one of the most essential parts of the character of a man.

Adam Smith, The Wealth of Nations

As time has passed and posts have accumulated it has become apparent that there must be even darker secrets and transgressions to hide.  Reinhardsen is not just the CEO and President of PGS.  He also has served on the board of directors since 2014 for one of the world’s major mobile operators, Telenor Group.  The Norway-based operator has acknowledged weak management stemming from the fallout from the publication of an independent report conducted by Deloitte.  The company discovered evidence of financial crimes relating to site lease agreements at its Thailand subsidiary dtac.  This discovery followed the resignation of Telenor’s CFO and General Counsel over their handling of the telecoms company’s ownership stake in Amsterdam-based peer VimpelCom, which paid a large fine after admitting to bribing an Uzbek official in exchange for business.  Reinhardsen also serves as a director for Cameron which is implicated in the Unaoil bribery scandal.  Former PGS Chairman, Francis Gugen, serves on the supervisory board of SBM Offshore which is also implicated in the Unaoil scandal.  The UK Serious Fraud Office (SFO) has recently opened an investigation into these companies.  EVP Pedersen serves as a director for PGS subsidiary Azimuth Limited, which is a conduit for trading marine seismic services for equity in offshore oil and gas concessions, shows-up in the Panama Papers.  SFO investigates large frauds.  But, these frauds are aggregates of a culture of permission for small frauds.  Functioning internal governance and compliance programs should never require police intervention, especially for high level executives from whom the greatest level of trust is essential.  Relying on external governance – the police and courts – to resolve internal corruption are reactive anti-corruption measures and not the pro-active anti-corruption measures required throughout an ethical organization.  Corruption Training accomplishes nothing when top-executives are unethical and avert responsibility through secrecy and cover-up.  Just as with PGS, such organizations have weak moral leadership along with weak internal governance and compliance programs that invite corruption rather than prevent it.  And it does impact the bottom-line.  Always.

It should be noted that the alleged frauds, forgery, and corruption have in fact been reported to police through Action Fraud (UK) [AF].  Reports have also been provided to the Insolvency Service (UK) that oversees the behavior of directors.  A report was made to the Society of Exploration Geophysicists (SEG) whistle blower hotline.  Reports and supporting documents have been provided to the Information Commissioner’s Office (ICO) who oversee compliance to the UK Data Protection Act 1998 (DPA). PGS has deceived and misrepresented not just me, but also the ICO and even the UK Border Agency.  The police have selected not to investigate because apparently fraud appearing less than one hundred-thousand pounds does not warrant too much concern.  The average professional is too busy or enamored by top executives to complain. Targets are isolated. However, validation of claims would be simple. ICO has no authentication process or requirement for data controllers to meet, and so there has been no ICO investigation.  This is really more luck for PGS. PGS lies, and covers-up to delay fair resolution.  The communications and source documents are preserved by ICO for two years since the last action and the process has recently began again with both ICO and AF.  Even government agencies are intimidated by titles and well lawyer-ed companies.  On the other hand, it is all a bit dangerous because it really is not too difficult to uncover the frauds if only the most basic investigation were completed to get the truthful answer for even just one question.

PGS executives are, at the very least, directly aware of these corruption and bribery scandals all around them in other companies.  Yet, these executives cannot address allegations of corruption within PGS professionally and effectively?  They obviously choose not to.  It has been months since the problems were made visible and not one responsible action toward myself and stakeholders has been taken.  And to me, that says a lot.  At PGS, capital is tightening, losses are piling, and opportunities are scarce.  Perhaps there will be a rebound, but when and how high is completely unknown. PGS decided to add more streamer capacity through charters and are expecting their final of four new-build Titan class vessels Q1 2017 to be introduced into an over-capacity market.  However, during the Q2 2016 earning presentation, Reinhardsen now contemplates the possibility of stacking more vessel(s).  The market is very uncertain and in need of sound decisions.  But, the backdrop to all PGS business transactions is the knowledge that the basis which is supposed to be used for forming decisions, Core Values and Codes of Conduct, compliance, and governance, are not being adhered to.  In fact, there is the tendency for deceit which corrupts the decision making process.  PGS has not publicly addressed these serious issues and concerns in spite of the stated willingness to do so within the published Letter from CEO.  This also points to the confusion through making unguided decisions.

Understanding both the culture and strategy of a company is important for capital market investors.  It is one thing to appreciate and believe in the technical capability and potential of a race car, while quite another to believe that just any driver can deliver that potential.  In corporate business, you need to believe and trust in the CEO and top executives driving the company to not only have a plan, but that the right vehicle to achieve their plan is being used.  The technology and resources, human and non-human, which are managed will not perform optimally by themselves without coordination and honest management.  As a believer and proponent of systems thinking, how the system is managed dictates performance by 85-99%.  Eventually, poorly managed systems collapse on the merits of how they were managed, and not what was their potential.  PGS executives are not beyond reproach.  Challenging markets often hide bad decisions because losses are often not explored and simply blamed on the market. But, literally millions of dollars in bribes or embezzlement can be overlooked through nefarious payments routed through HR in the way of paying-off fraudulent settlements, fraudulent contracts, bonuses, changing job titles and promoting co-conspirators, and over-looking policy and contract transgressions to appear “legitimate.”   

But, mostly consider this: why should anyone trust a CEO and executive team that cannot back-up their claims and quash adverse allocations and controversy in a timely and effective manner?  The PGS CEO and my publications are connected in the top listings in Google™ search.  Corrupt executives use monies and resources to promote their ideal image and yet invest nothing to defend PGS’ or their own reputations?  There is no honor in that.  People and organizations with honor defend their honor.  People and organizations without honor hide and deflect from the truth.  PGS executives remain silent and hope that the provided advantage of time and (grifted) money at their disposal will protect them from being held accountable.  And the piles of loss and debt grow.  Such businesses conduct their business behind the curtain and beyond careful scrutiny.  Do not be fooled by shiny pictures and unverified commitments.  Those are easy.  Being ethical and adhering to core values and principles should not be difficult either, but it seems that it is for far too many high level corporate executives these days.

When scrutiny is lacking, tyranny, corruption and man’s baser qualities have a better chance of entering into the public business of any government.

Jacob K. Javits

I take things like honor and loyalty seriously. It’s more important to me than any materialistic thing or any fame I could have.

Lloyd Banks

In capital market participation there are rules and ethics that stakeholders are expected to follow which make the capital market a fair operation.  A capital market runs on trust, reputation, knowledge and ethics.  Stakeholders who deviate from these fundamentals corrupt the market place and could possibly even collapse the entire system.  An organizations reputation impacts investment decisions.  Due diligence firms who work for private equity, corporate and other investment funds ensure that the reputation of the other party in a transaction is sound and potential liabilities are identified.  This usually goes beyond a Google online search.   Reputation is important and a poor reputation can have a negative impact on companies needing to raise funds on the capital markets.  So, any thorough due diligence process requires organizations to address reputation issues which they may have as clearly and transparently as possible.  While it is troubling and frustrating that the PGS’ CEO and senior executives are unwilling to address the many issues brought to their attention on a personal level, such non-disclosure should be unacceptable for capital market participants.  The CEO openly invites queries on the PGS website, but will not answer serious questions and allegations regarding the business practices of his executive team.  In system audits queries must be responded to through evidence to ensure compliance.  A smiling face and title just isn’t enough to confirm compliance.  PGS prefers silence and secrets to hide wrong-doing and protects implicated executives from accountability above the reputation of the company, its employees, shareholders, investors, and other stakeholders.  This devalues the company for all stakeholders.  It only serves the corrupt.    

When a corrupt company executive hierarchy cooperate and conspire to promote depraved self-interests above the best interests of the company and shelter executives from accountability for wrong-doing and possibly criminal acts using company funds and resources there is a problem.  And this is the culture problem which PGS has under CEO Reinhardsen which impacts every aspect of strategy up through delivery of product and services.  It is a culture of hypocrisy where elaborate bullying is allowed and rewarded.  It is a culture where workplace safety is ignored and where health and safety reports are withheld and destroyed endangering employee’s health and livelihood.  Executives cooperate to forge and falsify personal data documents which encumber employee careers.  They breach terms of contracts through fraudulent acts cooperating and lying to deceive investigators.  It is a culture that cooperates to deceive and lie to government compliance organizations.  These are deliberate and illegal acts of violence which are rewarded under the regime of CEO Reinhardsen.  This objectionable abuse of position and authority undermines a safe workplace.  It is completely unnecessary.  Not only does PGS not punish and stop the health endangering and unsafe acts, but the CEO and senior executives cooperate and participate to blacklist and punish targets who say “enough is enough” even more.   When those who are responsible and follow the values and policies, as well as the laws of the land are punished, while those who abrogate their responsibilities to manage through fair and ethical business practices are rewarded, there is a problem.  The macabre of lies and falsified records created through conspiracy and cooperation make the process of redress expensive and difficult.  But, the documents which they have create are easily detectable as false through their lack of authentication of delivery and receipt, especially signature.  This toxic workplace is created so that the criminals and corrupt have a place to carry out their actions without interference.  The fish stinks from the head down! In such an environment that is not trustworthy every data delivery and contract term is suspect and needs to be verified because the deceit began in the Letter from CEO – before any transaction commenced.  Boycott PGS until CEO Jon Erik Reinhardsen follows-up on the promises which have already been made before putting an ink to paper for any new transaction.  Demand that PGS act responsibly and address wrong-doing which pollutes capital market investment and the overall fair market.  Avert risks and boycott PGS!

We learned about honesty and integrity – that the truth matters… that you don’t take shortcuts or play by your own set of rules… and success doesn’t count unless you earn it fair and square.

Michelle Obama

If someone really wants my company’s business, why shouldn’t he be able to do everything he can – including paying me off – to get that business? Because bribery encourages people to make decisions based on the wrong criteria, which means in the business world that it distorts the efficient allocation of resources.

James Surowiecki