Energy & Resources

A bad press

Can Sinopec shake its image for bad PR? Well, it’s trying


Ratner: he of the ‘crap’ decanters

Gerald Ratner knows a thing or two about bad PR. In what the Daily Telegraph calls the most famous public relations gaffe ever, Gerald Ratner gave a speech to the Institute of Directors in 1991 that he’s regretted ever since. He said of the Ratners jewellery chain: “We also do cut-glass decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say ‘How can you sell this for such a low price? I say, because it’s total crap.”

Not surprisingly journalists delighted in a story about a boss rubbishing his own merchandise and – by implication – deriding his customers for buying it. The press duly renamed him ‘Mr Crapner’. Sales plunged, wiping out £500 million of the firm’s value and Ratner was fired by his own board. As he later wrote in the Daily Mail: “That speech cost me my business, my reputation and my fortune.”

Two decades later and another British executive learned the dangers of the throwaway remark. On this occasion it was BP’s former boss Tony Hayward, who riled the American press with his “I’d like my life back” comment after vast amounts of BP oil has spilled into the Gulf of Mexico. Hayward’s PR nightmare wasn’t helped when cameras caught him out sailing – an image failing to convey the requisite sense of crisis management.

China has its own candidates for firms who seem to get embroiled in frequent PR crises. One of the worst performers is the country’s second largest oil company, Sinopec.

In fact, it’s a trend that WiC has discussed before. Regular readers will recall some of Sinopec’s transgressions: the Rmb12 million ($1.92 million) chandelier purchased for corporate HQ; the Guangdong general manager’s $396,400 bill for an evening of Chateau Lafite and Moutai; and even the strange discovery that the firm had built a luxury hotel for its top staff (see issues 26, 104 and 109 respectively).

In the biggest scandal of all, former boss, Chen Tonghai, was jailed for corruption in 2009.

Sinopec’s latest boss, Fu Chengyu, also took flak earlier this year after a radio interview in which he refused to accept blame for the smog blanketing much of the country. While it wasn’t quite vintage Ratner, Fu inflamed public opinion by claiming Sinopec couldn’t be held responsible for China’s low fuel standards. Even Xinhua had to admit this was a fairly flimsy line of defence, noting that the secretariat that sets the standards is based in Sinopec’s headquarters.

The data backs up the perception that Sinopec attracts more criticism than most, with Sina Finance generously terming the company as “prone to adverse publicity”. Indeed, according to Sinopec’s own statistics it was mentioned online an average of 1,522 times a day last year, of which 639 comments were negative. Its parent, Sasac has also calculated that of all the large state firms in its purview, Sinopec accounted for 18.7% of online comments.

Sinopec’s top brass now seem to have realised the firm has the worst press among its peers, and wants to be a bit more proactive in managing its reputation. Accordingly, it launched its own Sina Weibo account last week, which it named ‘Sinopec Truth’.

Economic Information Daily says the initiative is designed to rid the firm of its “mysterious image”, and aim instead for greater transparency in its communications with the wider world.

The timing may have been coincidental, but the weibo launch last week was a rare instance in which the Sinopec PR machine earned a victory over CNPC – which has been making news because of corruption probes (see Talking Point).

In its first official weibo message Sinopec said it would use the microblogging service to “strengthen corporate governance, better improve our own work and contribute to the realisation of the ‘China Dream’.”

Sinopec management may also hope to quash rumours with the new forum, like the speculation last year that one of the firm’s female directors slept with African gigolos during a bidding process. The story went viral, in part because a sceptical public had got so used to negative tales about Sinopec. But the woman in question was devastated by the scandal, reports the Beijing News, and denied it completely. A man has since admitted to authorities that he fabricated the story. He was arrested last month.

So, some small successes for the oil major’s image: a new weibo account activated, and a slur retracted. Is the tide finally turning for Sinopec’s beleaguered PR team?

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