Wednesday, November 10, 2010

BP's New "Culture of Complacency"

Oil Spew Commission Counsel Fred Barlit helped BP's risk management case with his comment:

"to date, we have not seen a single instance where a human being made a conscious decision to favor dollars over safety." 

Did WilmerHale's Jamie Gorelick give Fred that line?   If not, she had to be pleased with its delivery.  Fred noted the Commission did not have subpoena power.  Many refused to testify or plead the Fifth on incriminating questions.  BP CEO Tony Hayward didn't show, much less say how cutting 5,000 jobs and $4 billion in costs impacted safety.

This wasn't BP's first deadly accident.  After BP's Texas City refinery explosion, which killed 15 people, the company put together a list of approved terms for employees to use. Did WilmerHale advise them on language?  BP's internal report on Texas City stated it:

found no evidence of anyone consciously or intentionally taking actions or decisions that put others at risk.”

That sounds like Fred Barlit's statement.  Ironically, WilmerHale helped set up The Baker investigation.

Assisted BP in establishing and supporting the Independent Panel headed by former Secretary of State James Baker to review the safety systems at BP's US refineries.

The Baker report concluded BP had a "misplaced culture of safety," by focusing on personal safety and ignoring process safety.  CEO Lord John Browne, cost cutter extraordinaire,  knew little about his company, when he was deposed three years after the explosion.  Oddly, WilmerHale shares the Lord's cost cutting bent.  Heaven help British higher education survive Browne's slashing.

BP went from "safety challenged" to "complacent"  between April 2005 and April 2010.  What degree of indifference does that represent?  Where was BP's focus is not on safety?  Greed.  BP's Libya machinations are sure to turn one's stomach.

In the midst of asset sales post-blowout, BP invested in Azerbaijan.  Their quandary is where to send their gas, in short supply in Europe.  Recall BP needs to continue drilling in the Gulf of Mexico to fund the $20 billion compensation fund. That's another WilmerHale mantra.

While the final report is yet to be written, early signs favor BP risk management.  Covering for corporate friends, that's a familiar refrain in Washington, D.C.

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