Can you have serial crimes but no criminal? BP’s well-heeled directors have proved as slippery as the gulf’s oil smeared coastline, with none so far facing criminal charges relating to the Deepwater Horizon disaster or other deadly incidents.
THE BUCK STOPS HERE: Decisions made in BP's London boardroom have led to disasters. Shouldn't BP's directors be held accountable in the courts?
BP’s cavalier but usually profitable management practices have been implicated in a series of disasters. The company has been tried and found guilty of environmentally damaging, sometimes deadly and certainly criminal safety offences. But bullish denials, occasional (fleeting) acts of contrition and a short period of calm have seen the company swiftly rehabilitated in the eyes of politicians, regulators and the media.
This time, with oily-footprints leading with each successive staggering blunder all the way to BP’s London HQ, will the Gulf of Mexico catastrophe result in company executives being held personally liable for corporate safety and environmental crimes? Will BP’s directors for once be called to account to the bereaved and dispossessed, and not just the financial markets?
LIFE LINE: BP chief executive Tony Hayward says he wants his life back. Eleven workers died on 20 April in the incident that prompted his outburst.
BP’s current chief executive, Tony Hayward, has shown none of the assured grace of his predecessor, Lord John Browne, who survived with reputation unsullied the deaths of 15 workers in a 2005 blast at the company’s Texas City refinery.
Browne was certainly culpable, but instead of facing jail time was feted for turning around a company which posted a loss in 1992, the year he joined the global board. After taking the helm in 1995, his leadership led to an unprecedented period of profitability, the soubriquet of ‘Sun King’ in the financial press and, on his resignation in 2007, a payout from the company reputed to total £72 million.
It took some time after the 20 April 2010 Deepwater Horizon explosion for it to become apparent Hayward lacked the deft teflon touch of his mentor. Certainly, initial reports on the 11 fatalities on the rig had caused little discomfort to BP and its board – the deaths of roustabouts and roughnecks was a news story, not a disaster. In reputational and therefore monetary terms, those deaths just didn’t count.
And at first there was sufficient confusion about responsibility – BP owned the well, Transocean operated the rig – for Hayward to attempt what turned out to be his biggest strategic mistake. It wasn’t BP’s fault, it was just BP’s oil, the chief executive intimated.
Hayward told the US Today show on 3 May: “It wasn’t our accident. But we are absolutely responsible for the oil, for cleaning it up and that’s what we intend to do. The drilling rig was a Transocean drilling rig, it was their rig and their equipment that failed, run by their people with their processes. But our responsibility is the oil and it is ours to clean it up.”
The BP chief was facing a different sort of headache to his mentor – a disaster that would not die down coming on the heels of a sequence of massive safety and environmental fines. The saga of BP’s blundering on the sea bed fed more bad news stories about the company and allowed sufficient time for more probing questions to be asked.
So, instead of concentrating on just what bit of equipment failed, the spotlight fell on why a multinational making massive profits was involved in such a devastating incident and why it had neither the foresight to prevent it nor the systems to cope with the aftermath. The ongoing scrutiny and growing criticism of BP drove an exasperated Tony Hayward to ask fellow executives at the company’s London HQ: “What the hell did we do to deserve this?”
According to Robert Weissman, president of Public Citizen: “’Deserve’ in this context is a strange sentiment. But if Hayward had asked what in the hell BP did to cause the disaster, emerging evidence suggests the answers are straightforward: recklessly proceed with extreme deepwater drilling that far exceeds the ability of industry to control problems; fail to invest properly in safety, including in relatively cheap safety equipment; fail to oversee its contractors sufficiently; and order drilling operations to skirt safety measures.”
A month into the story, there were even murmurings of concern that 11 families had lost a loved one, a breadwinner, in the Gulf of Mexico. Shouldn’t someone put their hands up and admit guilt for that? Don’t the families deserve an explanation? Don’t they deserve justice?
Hayward by this time was floundering. On 30 May, commenting on the impact of the Gulf of Mexico spill on affected communities, he told CNN: “I’m sorry. We’re sorry for the massive disruption it’s caused their lives. There’s no one who wants this over more than I do. I’d like my life back.” Eleven workers had died in the explosion. Hayward’s comments smacked of at best insensitivity, at worst indifference, something that didn’t escape the media.
But Hayward is only human, and shouldn’t be castigated for making crass comments when clearly under stress.
It’s the decisions Hayward and his fellow executives made in the calm of BP’s London boardroom that deserve forensic scrutiny and criticism. The Gulf of Mexico disaster and others like Texas City were a consequence of an explicit drive to increase profits while cutting costs, a plan masterminded and implemented by Lord Browne and his protégé, Tony Hayward. The sort of policies that guarantee profits now, but that just as surely increase risks.
It may be Hayward was in one respect unlucky; that the 20 April disaster was the tipping point. After a decade in which the company had received the largest ever safety fines in both the US and the UK, maybe the blood-stained slick spreading across the gulf was just one disaster too many.
It was no accident that 11 workers died in the Gulf of Mexico, no more than it was an accident when 15 died at BP’s Texas City refinery. Tony Hayward should be sorry. He should also be in court, explaining why a company that was making profits of $2.6 million every hour around the clock in the months before the gulf disaster, again and again spills blood for oil.
3 Comments
I strongly agree!
We focus our attention on BP, they have been unfortunate , 2 major catastrophies, killed numerous workers, damaged property and the environment for decades to come.
Wemust however focus our attention onthe causes internationally, lack of regulation and lack of regulation enforcement Worldwide are the primary drivers for these incidents.
It is only luck that the bad fortune BP have encountered, could of happened to any of the Oil Majors.
They all follow the statistical trends to monitor and record safety performance, yet flaut their own safety procedures daily.
They set performance targets THEMSELVES (KPI’s) But then change the goal posts so as to meet ttheir targets, THIS IS A JOKE!!
record what they , if they want.
This is rife in industry, not just the Oil & Gas sectors
WE NEED REGULATION ,just like the banks needed before the economic collapse.
There are also 2 other partners involved in the depwater venture, they have not been mentioned, Why?
Looks like BP will potentially not pay any taxes in US or UK for several years, the disaster is TAX DEDUCTABLE. See Thom Hartmann’s blog below:
Thom’s blog
Did BP Just Give the Middle Finger to All Taxpayers?
It looks like the ironic outcome of the BP mess will come in the form of a truly poetic gesture that involves a middle finger offered by BP’s treasurer to British and American taxpayers. The Financial Times reports that “BP is forecast to pay about $10bn less tax over the next four years as it meets the costs of its huge oil spill in the Gulf of Mexico, hitting the revenues of Britain and the US that receive hundreds of millions of dollars from the company each year.” Because the laws of both the US and the UK allow companies to deduct from their taxes what are called “business expenses” – and don’t include exceptions that exclude from those normal business expenses things like cleaning up messes caused by doing business the wrong way, cutting corners and violating environmental laws – BP will transfer about a third of all their costs of dealing with the Gulf of Mexico oil disaster away from the company and directly onto the taxpayers of the US and the UK by deducting all these costs from their taxable profits. The company could well end up paying no income taxes at all, possibly even for several years, even though it’s selling billions of dollars of oil and oil products and making billions in profits all over the world. The easy solution is for both the US and UK to amend their tax laws to stop letting companies deduct illegal activities or those things that result from failure to comply with industry or government standards. That easy solution, though, probably won’t happen because BP and other oil companies also spend hundreds of millions of dollars bribing – er, lobbying – members of Congress, thus preventing such changes in the tax laws. And, like the cost of cleaning up the oil spill, their lobbying costs are also tax-deductible as business expenses, meaning that you and I are paying up to a third of those costs.
Unbelievable or what?