A personal insight into BP and the corporate approach to safety

Ross Macfarlane is a regular reader of SafetyAtWorkBlog and an active safety professional in Australia.  Below he provides his perspective on BP’s approach to safety as an ex-employee [links added]:

As an ex-BP employee I am again feeling a strong sense of dismay at what is occurring in the Gulf of Mexico.  The fact that BP appears to be deliberately distancing itself from Deepwater is a further shift from the radical openness policy that prevailed up until the Texas City disaster in 2005.

Prior to Texas City, BP was in the thrall of its charismatic CEO (then Sir John, now Lord Browne,) but since then, it seems to me, it struggles with its identity and its corporate culture.  In 2000, when I became a part of BP with Castrol, I was struck by what I saw as a “Cult of Lord Browne” – he had led the company from an industry basket case in the early 90s to a market leader which acquired businesses like Amoco, Arco and Castrol.  BP was the first oil company to acknowledge the fact of global warming, and take a stand to ameliorate it.  In the eyes of the BP employees who survived the multiple restructures, their opinion of the CEO rose along with the net worth of their company shares.

But an oil company styling itself as the greenest business in the world was not the only irreconcilable contradiction in BP’s early noughties corporate culture.  The explosion at Texas City on 23 March 2005, which killed 15 and injured 170, was followed in the same year by a massive land oil spill at Prudhoe Bay, Alaska, and a serious insider trading scandal involving a few LPG traders on the Chicago commodities exchange.

As a result, not only the public, but many overly credulous BP employees were forced to confront the fact that the company wasn’t the greenest, nor was it the most ethical, and especially, it was far from the safest company in even its own dangerous industry.  In my view, that includes Lord Browne and his then probable successor John Manzoni, neither of whom are still with BP.  They were genuinely shocked, I believe, to discover the company wasn’t what they had spun it as.  How could they be so misguided, or misled?

In the early 2000s BP espoused four corporate values: green, progressive, innovative, and performance-driven.  The first three were the spin, but the fourth – that it would perform for its shareholders – told the tale.  Middle managers were driven to find ways to drive more cost out of the business (I recall a company-wide cash squeeze in early 2002, so BP could acquire the German oil company Veba.)  As Andrew Hopkins has eloquently described in Failure To Learn, over the long term, chronic underinvestment had its inevitable outcome at Texas City.

What I believe Professor Hopkins missed, though, was the effect of the Lord Browne personality cult.  His aura was such that right up to Group Vice-President level, he was surrounded by yes-men who simply couldn’t believe that it wasn’t all true, and couldn’t bring themselves to hear, less still be the bearers of, bad news.  When the truth of the company spin was out, the true believers simply didn’t know what to believe – and to this day, in my opinion, BP still doesn’t know what it stands for.  The current CEO, Tony Hayward, was one of those yes-men, and today he still comes across to me as a lightweight and out of his depth.

So where did BP go wrong?  Perhaps an anecdote from my own experiences has a clue.  In 2002, I had the task of preparing two Victorian BP sites for a SafetyMAP self-insurance audit.  Relatively new to BP and to safety, I sought the guidance of a senior HSE executive, who explained that BP had moved beyond a culture of simple compliance with OHS law and had embraced a DuPont-style “commitment” culture (he even showed me a nice graph!)  What I suspected though, and what was subsequently borne out by our experience with the WorkSafe compliance auditors, was that while BP employees were committed to achieving great health and safety performance, our compliance was pretty shoddy: very often, we just didn’t know what the law, or good OHS practice, required.  The wallpaper was nice, but a few beams were missing from the underlying structure.

Does this mean companies shouldn’t aspire to higher goals than pure profit and minimal compliance with the laws of countries where they operate?  No, of course not.  If BP’s failures turn other companies away from aspiring, as it did, to be “a force for good” in the world, that would be as great a tragedy as the actual outcomes.

But lip service isn’t enough.  Senior managers must continuously reinvest in safety, and must question every decision not to spend, as hard as they question every decision to invest.  And they must be compelled to do so by strong legislation and rigorous, independent oversight of their activities.

Meanwhile, oil pours into the Gulf of Mexico, 11 families grieve, and 15 others confront bitter memories of 2005.

Ross Macfarlane

reservoir, victoria, australia

10 thoughts on “A personal insight into BP and the corporate approach to safety”

  1. USG should have seized BP, North American assets and it\’s G-7 country bank accoun ts, based on your historical inisght and history of Exxon Valdez…let\’s start a facebook campaign for that!!!

  2. I really appreciated reading Ross Macfarlane\’s thoughts – it gels with some of the work done on \”sensemaking\” of chaotic & difficult situations

    I had been trying to make sense of how BP could be held up as iconic in terms of corporate Knowledge Management globally and yet there seemed to be problems over a number of years – Ross Macfarlane\’s post helps me to analyse this dichotomy.

    The Dupont safety program approach should not be dismissed lightly – it can lead to dramatic cultural change when led properly from Top Management – I have been part of a Dupont journey for nearly 20 years and respect it enormously.

  3. Ross\’ article has generated a good amount of interest. He was contacted by a representative of Independent News in Pensecola, Florida for an interview. He declined but it is a big compliment to Ross that a) someone read his piece and b) someone felt impressed enough for more information.

    Ross advised Independent News that there was little more he could add to the debate and, as he has shown in the previous comment above, the Gulf of Mexico incident spurred him to write about BP not about the Gulf incident.

    Congratulations Ross.

  4. Thanks for your comments Matt. However I didn\’t actually comment at all about the circumstances of the incident or the root causes, for which the information at the moment is quite limited – this NYT story has the most information I\’ve seen so far:
    http://www.nytimes.com/2010/05/08/us/08rig.html?hpw

    What I did comment on was the corporate response and how this reflects BP\’s corporate culture, which was drastically changed by the events at Texas City in 2005. Those events have been intensively investigated and the facts speak for themselves. No BP person I ever worked with, or knew, thought that BP had done other than very badly in the events surrounding that incident – how could they? How much blame will sheet home to BP for the Deepwater Horizon incident we cannot yet say, but that wasn\’t the point of the piece I wrote.

    I do take issue with your comments about safety professionals and \”management\’s fault\”. Yes, residual risk exists, but that does not mean the accident was not preventable. Whether you agree or not, all accidents are preventable, even if sometimes we don\’t know how until it\’s too late.

    We all know that we work in a world of tolerable risk, and sometimes judgements are made which hindsight proves to be wrong. In an incident like this, some judgements about the level of tolerable risk in the drilling process were wrong. Which ones we do not know until a \”very public investigation\” – and such there had better be – has taken place.

    In the meantime though, my thesis stands on its merits as an opinion on BP\’s corporate culture, not as an analysis of the events of 21 April.

  5. The following two paragraphs are telling and more \”professionals\” should join the chorus at every chance:

    \”Does this mean companies shouldn’t aspire to higher goals than pure profit and minimal compliance with the laws of countries where they operate? No, of course not. If BP’s failures turn other companies away from aspiring, as it did, to be “a force for good” in the world, that would be as great a tragedy as the actual outcomes.

    But lip service isn’t enough. Senior managers must continuously reinvest in safety, and must question every decision not to spend, as hard as they question every decision to invest. And they must be compelled to do so by strong legislation and rigorous, independent oversight of their activities. \”

    Ross is a man after my own heart when it comes to the issues causing absolute misery for injured workers, their families and the community in general. There seems to be a propensity to dehumanise the subject, the statistics do not exist without the culpability of employers.

    Ross your article is topical and should be distributed to every company board and CEO of all enterprises, no matter how large or small, along with the table of penalties for non compliance with OHSW law for all of the individual players. It just might start to focus attention as can be seen with the Government suggesting that the mining industry might have to cough up more money, by gosh! management of a whole variety of companies certainly became very focused very quickly, maybe there is a lesson to learn here.

  6. I think you have appended your existing beliefs to a convenient event.

    Your beliefs, in and of themselves, may be correct or incorrect, but the GOM event doesn\’t support them for two reasons; 1) We don\’t know what happened, 2) The initial indications are that this is not a Texas City style event with high corporate culpability.

    It\’s an easy old safety professional saw to say, \”all accident can be prevented, it\’s always management\’s fault\”, but in reality a residual risk will always remain even if everything is properly done. If risk is anything greater than zero, then a bad days will come around. It\’s just the dispassionate mathematics of our universe.

    My suggestion is that you post your thoughts based on facts that will come from what will be a very public investigation. Those facts will either support your thesis or they will not.

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