Creole: Good Neighbor

With what was perhaps the best-spent $135 million in the history of business, the Standard Oil Co. (NJ.) in 1932 bought oil concessions under Lake Maracaibo to add to its Venezuelan affiliates. Now the Creole Petroleum Corp. (formed from those affiliates) is the biggest overseas investment in any single country by any U.S. company. It is also Jersey's best money earner, accounting for 48% of the parent company's dividend income in 1954. All by itself, Creole provides Venezuela with about 30% of government revenue. This week, in its fourth study entitled U.S. Business Performance Abroad, the National Planning Association took a searching look at Creole.

Good Citizenship. "On the whole," said N.P.A. "the story is a good one." Creole plays the good citizen of Venezuela principally by paying its taxes; it pioneered, between 1943 and 1948, the historic agreement with the government by which the company pays half its profits to Venezuela, the owner of the underground crude. But according to N.P.A., Creole also: ¶ Pays top wages. Common laborers earn $6 a day, foremen $13, plus so many fringe benefits, e.g., Sunday pay, year-end bonuses, housing, schooling, hospital care and cheap commissary supplies, that real wages are nearly triple normal wages. ¶ "Lives in a fishbowl." Example: in response to Venezuelan suspicions that Creole might be selling oil cheap to Jersey's refining and marketing organizations, deliberately cutting its profits and therefore the government's oil income, Creole initiated clarifying discussions between the government and those companies. ¶ Gives preference to Venezuelans in employment. Nine out of ten Creole employees are Venezuelans; even on the supervisory "staff," the percentage of Venezuelans has gone from 22% to 40% in eight years. Two of the 13 directors are Venezuelans, and training programs encourage Venezuelans to go to the top. ¶ Demands that its non-Venezuelan employees speak Spanish.

The effect: "Creole is widely accepted today among the Venezuelan people as a good and constructive force."

Community Integration. Currently, N.P.A. reported, Creole is taking an imaginative new step: community integration. Instead of running towns, schools, hospitals and commissaries in the pattern dictated by early-day, oil-camp needs, the company is turning over such services "to new agencies and local businessmen. For example, a company school and hospital have been leased to religious orders, and the company has helped finance two privately owned supermarkets.

So far, community integration has not proved popular. It breaks a paternalism that Creole workers have come to like, and it bucks the Latin American tradition of centralized rather than community government. The plan is also open to the charge that Creole is evading established responsibilities. The company replies that "social progress is accelerated by the encouragement of individual initiative," and insists that it will still pay its bills, e.g., tuition for workers' children. Company officials patiently look forward to the time when onetime company towns will be self-governing communities of self-respecting homeowners, and Creole will get credit for a big new contribution to Venezuela's development.

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