ALL'S WELL? BP's "powerful" new safety unit is seeking to make life more comfortable for its shareholders.

The creation by BP of a new global safety unit with “sweeping powers” has the safety of shareholders’ money as its “ultimate goal”, the company’s top boss has admitted.

In a 1 October news release from the oil giant’s London HQ announcing the “powerful new organisation”, BP chair Carl-Henric Svanberg said there were “difficult challenges ahead” but added “we have assembled a strong and able new team and are developing a robust strategy to deal with them and to deliver our ultimate goal – the restoration of shareholder value.”

Mark Bly, who headed BP’s internal investigation into the hugely damaging US Deepwater Horizon oil spill, will run the new unit. His report has been criticised for overlooking the role of BP’s top management, including its London-based board, in decisions contributing to the disaster, which killed 11 workers and unleashed an environmental catastrophe. In evidence last month to a US Department of the Interior-commissioned National Academy of Engineering hearing, Bly admitted his internal BP team has only looked at the immediate cause of the 20 April disaster, conceding the study “does not represent a complete penetration into potentially deeper issues.”

Commenting on the formation of Bly’s new global safety unit, Bob Dudley, who took over from Tony Hayward as BP chief executive on 1 October, said it will have authority to intervene in all aspects of BP’s technical activities. He added that the company will also conduct “a fundamental review” of its business performance incentives, including its “reward strategy”.

Dudley said: “These are the first and most urgent steps in a programme I am putting in place to rebuild trust in BP – the trust of our customers, of governments, of our employees and of the world at large. That trust is vital to the restoration of shareholder value which has been so adversely affected by recent events. The changes are in areas where I believe we most clearly need to act, with safety and risk management our most urgent priority.”

BP was fined a $15 million last month for pollution offences related to fires at its troubled Texas City refinery, which released highly toxic plumes including carcinogenic benzene into the air. Fifteen workers died in an explosion at the plant in 2005.

WAYWARD HAYWARD Departing BP boss Tony Hayward, 53, will receive a $940,000 yearly pension, a $1.6m pay off and more in shares. Bereaved families will not fare so well.

He’s the casualty of the Deepwater Horizon catastrophe least likely to elicit sympathy. BP announced this week that beleaguered chief executive Tony Hayward, described in a US newspaper on 2 June as “the most hated – and most clueless – man in America”, is to go “by mutual agreement” on 1 October. He will be replaced in the top job by Bob Dudley, whose American accent is expected to be less galling to US ears.

Hayward – whose high profile gaffes included telling CNN, as the oil lapped the Gulf coast, “I’d like my life back” – will at 53 qualify immediately for a £600,000 ($940k) annual pension, a £1.045m ($1.6m) pay off in lieu of notice and a multi-million portfolio of company shares. He will be given a place on the board of BP’s Russian offshoot as a consolation prize and will retain his seat on BP’s global board until 30 November.

On 27 July 2010, the day Hayward’s departure was announced, BP laid a marker on its planned response to the threat of criminal action, saying BP did not believe it was “grossly negligent” in regard to the oil disaster.

BP is not just in the business of deflecting bad news; the oil giant is working flat out to manufacture a good news story. Its ‘Gulf of Mexico response’ webpages are unremittingly positive. Featured sections say variously “We’re tackling the leak at its source”, “We’re capturing oil from the ocean surface”, “We’re cleaning Gulf beaches 24/7”, “We’re paying all legitimate claims for losses” and “We’re rehabilitating birds and other wildlife”.

But BP’s constant flow of good news on the oil spill clean-up operation is not going unquestioned. This week BP monitoring figures showing even the oil clean-up workers in the riskiest jobs in the Gulf of Mexico are generally having minimal exposures to hazardous chemicals were queried by experts.

BP’s release of detailed sampling data, something urged by the official watchdog the Occupational Safety and Health Administration (OSHA), met with praise from some experienced industrial hygienists but failed to assuage critics who remained sceptical that worker exposures could be so low given the amount of oil and dispersants used to battle the leak.

CLEAN START? Producing oil may be a high risk business, particularly if you plumb unmanageable depths in the world’s oceans. But BP’s problem stems from its first priority: producing profits.

Eileen Senn, an occupational hygienist and long-time workplace safety official, pointed to 10 separate shortcomings in the quality of the company’s data release, which OSHA said concentrated on workers with the heaviest potential exposures, including the move to sample for 11 chemicals when many more substances are potentially present in Gulf air.

Senn also criticised the company’s blending of samples taken where exposures were likely to be low – in areas where crude or dispersant was not nearby – with areas where exposure was more likely due to the presence of fresh oil.

“Given the 200 million gallons of oil spilled, 10 million gallons of oil burned, and 2 million gallons of dispersant applied, BP couldn’t possibly make a credible assertion that there is nothing for cleanup workers to fear in the Gulf air,” she said. “They need the illusion of science to make their audacious claim seem believable.”

If the sample is biased to those “most likely to have the heaviest exposures” – which OSHA says is the case – and the majority of these are recording no exposure at all, BP is performing an occupational health magic trick that is beyond its safety “operating management systems” in every other sphere of its operations. If the claims for this system had any element of truth, we’d never have seen the Deepwater Horizon blast kill 11.

BP certainly doesn’t achieve a similarly blemish-lite performance on safety, something evident from ‘personal safety’ and five year trend figures on its website. Its performance on occupational health is more opaque, with no similarly accessible data available online; nor is it covered in the BP 2009 annual report – a document which makes repeat references to improving safety performance.

BP is also employing an army of novices working in difficult environments who, by any estimation, would normally be expected to be at higher risk than workers better versed in the use and hazards of chemicals. And included in their number is prison labour.

A 21 July report in The Nation notes: “By tapping into the inmate workforce, the company and its subcontractors get workers who are not only cheap but easily silenced – and it gets lucrative tax write-offs in the process.” It adds: “Work release inmates are required to work for up to twelve hours a day, six days a week, sometimes averaging seventy-two hours per week. These are long hours for performing what may arguably be the most toxic job in America… Inmates can’t pick and choose their work assignments and they face considerable repercussions for rejecting any job, including loss of earned ‘good time’.”

Commenting on the decision to step down in October, BP chief executive Tony Hayward said: “The Gulf of Mexico explosion was a terrible tragedy for which – as the man in charge of BP when it happened – I will always feel a deep responsibility, regardless of where blame is ultimately found to lie.” Parroting the good news story on the BP Gulf response webpage, he added: “We have now capped the oil flow and we are doing everything within our power to clean up the spill and to make restitution to everyone with legitimate claims.”

This includes less celebrated casualties of the Deepwater Horizon explosion, notably the 11 rig workers who died, whose dependants are between them unlikely to receive “legitimate” recompense totalling anything like the lifetime supply of BP cash Hayward is to enjoy. His pension pot already is valued at about £11m.

BP hopes the departure of Hayward will be the beginning of the end for its Gulf of Mexico woes, and the reputational harm that came with it.

However, just three years ago when Hayward took over the helm, BP was also hoping a change of leadership would create clear blue water between the firm and other safety and environmental blunders, notably the 2005 Texas City refinery explosion that killed 15 on the watch of Hayward’s cost-cutting predecessor Lord John Browne.

Hayward at the time told journalists his number one task was to “focus like a laser” on safety and reliability. He delivered neither. Not only was he leading the company when it was implicated in the worst environmental catastrophe in US history, a failure to remedy serious safety violations following the Texas City tragedy saw BP as recently as 30 October 2009 receive the USA’s largest ever safety fine.

Producing oil may be a high risk business, particularly if you plumb unmanageable depths in the world’s oceans. But BP’s problem stems from its first priority: producing profits. Like Browne and Hayward before him, new CEO Bob Dudley will be judged on the bottom line.

Without a substantial improvement in the regulation and scrutiny of the industry, in the US and internationally, safety and the environment could once again be the casualty.

BROWNE STUFF In 2007, Hazards magazine suggested BP's Lord Browne should be behind bars. Now he's the UK's unelected Czar.

John Browne, Tony Hayward’s predecessor as chief executive of BP, has been appointed by the UK government to oversee moves to make Whitehall “more businesslike.” Lord Browne was the architect of the much criticised BP cost- and safety-cutting strategy implicated in the Texas City refinery disaster, which killed 15, and a sequence of other safety and environmental crimes.

The scope of the peer’s shake-up of government will include all ministries, including those responsible for workplace and environmental safety and the energy industry.

Commenting on his appointment as a ‘lead non-executive director’ in government, Lord Browne said: “This is a role within government but also independent of it. Its purpose is to assist in the delivery of policy using relevant experience from business. There is a great need for the best of the business community to be involved during these challenging times for the UK.”

Minister for the Cabinet Office, Francis Maude, said: “His experience will be a real benefit in our drive to make Whitehall work in a more businesslike manner and I am looking forward to working with him to implement our vital reform programme.”

The Conservative Party, which leads the UK’s coalition government, is wedded to the idea of a business-friendly, “burden” lifting, programme of deregulation. The coalition has already embarked on a review of health and safety regulation, and a Conservative policy paper pre-election promised “the powers of government inspectors will be drastically curbed”, adding the party’s objective was “taming regulators” by “replacing regulator-run public teams of inspectors with a model closer to financial controls and audits.” In the UK, far and away the two biggest regulators are the Environment Agency and the Health and Safety Executive (HSE).

The model is, in effect, that secured by BP and other oil interests in the Gulf of Mexico, where firm regulation was sacrificed in favour of paper agreements and oil industry self-regulation.

The worker safety standards in place for offshore oil rigs before the Deepwater Horizon blast were voluntary and developed in consultation with the oil industry, a senior official at the retooled Minerals Management Service (MMS) – in a seemingly premature move renamed last month as the Bureau of Ocean Energy Management, Regulation and Enforcement - admitted to US lawmakers on 23 June.

Doug Slitor, now the acting chief of offshore regulatory programmes at the reorganised agency, told members of the House Education and Labor Committee that his office is working to turn the worker safety guidelines – drafted with the oil industry lobbying group the American Petroleum Institute – into a mandatory programme.

Rep. George Miller, chair of the House Education and Labor Committee, commented that BP was “a multinational corporation with a dismal safety record in this country.” A share of the more egregious crimes occurred while the company was under the direction of Lord Browne – Tony Hayward took over the reins in 2007.

Questions have already been raised about the company’s safety record in the UK, where the troubled oil giant has been caught breaking health and safety regulations 54 times over the past five years. Health and Safety Executive (HSE) enforcement database show the official action against the British multinational relates to a series of maintenance and operating lapses which put workers and the environment at risk from major leaks, fires and accidents in the North Sea and elsewhere.

As a result HSE has served BP companies with 21 legal enforcement notices since 2006, requiring lax and dangerous practices to be improved. The company, however, has not been prosecuted by the watchdog since 2005.

The analysis of the HSE enforcement database shows that four BP companies – BP Exploration, BP Oil UK, BP Chemicals and BP Shipping – have been hit with legal notices in the last five years. There have been 54 breaches of eight health and safety laws or regulations. A BP spokesperson said the company’s safety record compared well to that of others, adding: “We are never complacent and are continually looking at ways to reduce even the smallest of leaks.”

But Juliet Swann of Friends of the Earth Scotland said: “Companies like BP have for years been taking shortcuts with safety that risk human life, the environment and people’s pensions.”

BLOOD PRESSURE: Workers cleaning up the oil spill for BP say they are suffering irritant effects and high blood pressure. Eleven died when the Deepwater Horizon rig exploded.

A chemical dispersant being used to fight the gulf oil spill is making workers sick, recent reports suggest. The disaster, where BP has repeatedly failed to stem the oil gusher and which started with a 20 April explosion on the Deepwater Horizon rig that killed 11 workers, has led to an increasing clamour for criminal charges to be levelled at the London-based multinational, which owns the well and is responsible for the cleanup.

Last week seven crew members aboard fishing vessels who had been working to cleanup Breton Sound, southeast of New Orleans, blamed the dispersant chemicals for health complaints including nausea, shortness of breath and high blood pressure. All were working on a cleanup crew south of Venice, Louisiana, and were admitted to hospital. Doctors who examined them said that their conditions were “related to some kind of irritant, combined with dehydration”.

The US government’s Environmental Protection Agency (EPA) had earlier asked BP to stop using the dispersant, known as Corexit, and find a safer alternative. BP disputed the agency’s assessment of its level of toxicity.

The Los Angeles Times reports a 25 May memo from David Michaels, head of the Occupational Safety and Health Administration (OSHA), to Coast Guard Adm. Thad Allen, the incident commander, expressed “serious concerns” for the safety of workers involved in the spill cleanup.

The problems, Michaels wrote, “appear to be indicative of a general systemic failure on BP’s part to ensure the safety and health of those responding to this disaster.’” He complained that OSHA had repeatedly asked BP to develop a plan for protecting employees during inclement weather, but had yet to receive one, that the oil company had been slow in reporting sickness among workers, and that heat-related illness remains a serious concern.

Expressing growing frustration, Michaels wrote that the BP official in charge of worker safety “does not appear to operate with the full support of the company, nor does he seem to have the authority necessary for the job which he has been tasked.”

Like previous BP-related disasters in Alaska and Texas, evidence has emerged that appears to show BP knowingly cut corners on maintenance and safety on Deepwater Horizon’s operations, which some commentators believe could amount to criminal violations of the Clean Water Act.

Others say that because people were killed, BP and company officials should face prosecution for negligent and reckless homicide, although charge the deaths have been largely overlooked as the focus has been on the environmental catastrophe.

“The worker safety issue has been completely lost in this story,” said Tom O’Connor, executive director of the National Council for Occupational Safety and Health. “It’s one of the biggest industrial disasters in recent history, and yet Congress [views it] the same as the public: They’re not seeing it as a worker safety issue.”

Federal statistics support O’Connor’s call for concern. Between 2003 and 2008, 646 US oil and gas workers were killed on the job, according to the Bureau of Labor Statistics, including 120 in 2008.

OIL SLICK Directors of BP's London-based global board, including current CEO Tony Hayward, seem to be above justice when it comes to the firm's serial workplace safety and environmental crimes. But nice guys can (and do) kill you.

US President Barack Obama has vowed to end the “cosy relationship” between oil companies and US regulators in the light of the April 2010 Gulf of Mexico disaster. He also condemned “the ridiculous spectacle” of oil executives “falling over each other to point the finger of blame,” the BBC and other media reported.

Federal regulators had, the president said, sometimes approved drilling plans based on the oil companies’ promises to use safe practices. The rule from now on, he said, would be “trust but verify.” For some though, this is too little, too late.

If more attention had been paid to BP’s deadly workplace safety record – the oil giant owns the well that continues to spew oil into the Gulf – then it would have been shockingly apparent that trust was never warranted.

A Center for Public Integrity analysis published on 16 May 2010 found refineries owned by the oil giant account for 97 per cent of all flagrant violations found in the refining industry by Occupational Safety and Health Administration (OSHA) safety inspectors over the past three years.

This isn’t a matter of technical infringements. It is about corporate bad behaviour that could kill. In some instances the violations related to grievous failings that did actually kill, and kill a lot.

Hazards has been tracking BP’s safety record for years and the apparent impunity of the company’s decision makers. The disaster-prone London-based board generally escapes criticism from politicians in the US, UK and elsewhere, uses slick PR to fend off press attacks and has evaded all blame and punishment for a sequence of industrial and environmental catastrophes.

These board members are wealthy, respectable upstanding members of the community. They rub shoulders with the powerful – hell, they live in the same neighbourhoods, their kids go to the same schools. And they don’t die at work – they just make the decisions that consign others to an early grave.

Former CEO Lord John Browne was only brought down by a personal scandal; he escaped unscathed from the damning criticism spelled out in investigations after the 2005 Texas City refinery blast that killed 15 and injured 170 more. But despite official enquiry-determined culpability– he even signed off the company’s safety policy prior to the disaster – Lord Browne still enjoys a seat in the House of Lords, one of the UK’s two Houses of Parliament, and remains a government-appointed trustee of the Tate Gallery.

Lord Browne’s successor, Tony Hayward (pictured top), was BP’s second-in-command when Texas City exploded, and became chief executive in 2007. He has been in top management positions for over a decade, and was made an executive vice-president in 2002, the year BP received a then-record UK safety fine of £1m after being prosecuted by the UK government’s Health and Safety Executive (HSE) for criminal safety offences at Scotland’s Grangemouth refinery. He “chairs the group operations risk committee (GORC) which oversees safety performance,” notes the company’s website.

BP’s website also spells out the practices “we implement in pursuit of our goal of ‘no accidents, no harm to people and no damage to the environment’.”

It asserts: “Our commitment to safe, reliable and responsible operations starts with the group chief executive Tony Hayward and his leadership team: a commitment that filters down through the organization and is regularly communicated to all staff.”

On paper at least, responsibility for safety – and safety failings – goes right to the top.

There is now, tragically, another opportunity for the London-based board to be made to face up to that responsibility. Eleven workers died in the latest disaster linked to BP, when an explosion destroyed Tranocean’s Deepwater Horizon drilling rig on 20 April 2010. The rig was operated on behalf of  BP. White House officials have indicated the president will set up a commission to investigate the disaster. They say the panel will also examine industry practices and the government’s role in an incident that has seen oil spewing into the Gulf since the rig exploded.

President Obama would establish a presidential commission by executive order, White House officials said. The officials, who spoke to journalists on condition of anonymity, said the commission would be similar to panels created to investigate the space shuttle Challenger disaster in 1986 and the nuclear accident at Three Mile Island in 1979.

It would also study oil industry practices, rig safety, regulation and governmental oversight, including the functions of the Minerals Management Service (MMS) – the agency responsible for regulating offshore oil drilling, but which is also responsible for administering oil leases and with that government revenue from oil.

BRITISH POLLUTERS Environmental group Greenpeace rebranded BP's global HQ in London on 20 May.

A congressional hearing this month was told BP was aware of equipment problems aboard the Deepwater Horizon rig hours before the explosion. The House of Representatives’ energy and commerce committee said documents and company briefings suggested that well owner BP, rig owner Transocean and Halliburton, which made the cement casing for the well, ignored tests in the hours before the explosion that indicated faulty safety equipment.

President Obama clarified the position on 22 May: “First and foremost, what led to this disaster was a breakdown of responsibility on the part of BP and perhaps others, including Transocean and Halliburton,” he said.

These are not just serious issues, they are life and death issues. Refineries and rigs explode and workers die, families are bereaved. If board members can accept the bonuses and fat pay cheques when things go right, they must also accept the consequences when things go wrong. That means an appearance in court and, if found guilty, a lengthy spell in jail. This is not about blame. It is about justice.