“We will trust but we will verify” – upcoming lessons from the Gulf of Mexico

The mass media is full of reports on legal action being taken on behalf of shareholders in BP over the continuing oil spill from the former Deepwater oil rig in the Gulf of Mexico.

An Australian video report was broadcast on 25 May 2010 and a composite article has appeared in The Australian on 26 May 2010 as well as elsewhere. Many outlets are mentioning the law suit (Southeastern Pennsylvania Transportation Authority and Robert Freedman v Anthony B Hayward et al, Court of Chancery for the state of Delaware, No. 5511) but no details of the suit are publicly available at the moment.

Although safety is mentioned as one of the bases for the suit, it is likely that environmental impact will get prominence over occupational safety and that impact on stock value will be of the most concern.   The shareholder outrage mentioned in some of the articles seems to focus mostly on the financial impact on BP share value rather than any moral outrage on environmental impact or dead and injured workers.

BP CEO Anthony Hayward has acknowledged the substantial  “reputational risk” but his comments are almost always reported surrounded by financial bad news.  The Australian article mentions the falling price of oil, the increasing cost of cleanup.  SafetyAtWorkBlog notes that the BP share price has been almost continuously falling since the magnitude of the April 21 explosion is understood.

Currently community outrage seems to outweigh shareholder anger as is indicated by the comments by the US Interior Secretary, Ken Salazar, and the more (global and corporately) significant comments by President Obama on 22 May 2010 (Audio of the President 22 May weekly address is available by clicking below.

The commission of inquiry should be extremely revealing about American corporate values in the energy sector.

One particularly useful comment for safety regulators and sfatey professionals was that spoken by the President on 14 May 2010 –

“We will trust but we will verify”

This sums up the self-regulation lobbying of business in Australia and should be remembered constantly as Australia moves to a new OHS regulatory regime that relies more on business cooperation and understanding than ever before.

President Obama  may govern the United States but his comments on a range of political issues set the tone for the aims and behaviour of politicians and corporate leaders in other countries.  It is important to note the President’s response to the appearance  and conduct of BP, Transocean and Halliburton executives at the Senate in early May 2010 (audio below):

“Let me also say, by the way, a word here about BP and the other companies involved in this mess….I know BP has committed to pay for the response effort, and we will hold them to their obligation.  I have to say, though, I did not appreciate what I considered to be a ridiculous spectacle during the congressional hearings into this matter.  You had executives of BP and Transocean and Halliburton falling over each other to point the finger of blame at somebody else.  The American people could not have been impressed with that display, and I certainly wasn’t…..

But it is pretty clear that the system failed, and it failed badly….And for that, there is enough responsibility to go around.  And all parties should be willing to accept it.”

All indications are that the spillage will continue for some time to come.  The cleanup effort will continue for many months but behind the environmental images are the following issues that SafetyAtWorkBlog will be monitoring

  • The deaths of 11 oil rig workers
  • The corporate approach to  responsibility
  • The government investigations.

Each of these elements in this saga will indicate the veracity and authority of the Obama Administration to workers’ rights and the  genuineness global corporate responsibility.  It is hoped that a better world comes of it all.

Kevin Jones

3 thoughts on ““We will trust but we will verify” – upcoming lessons from the Gulf of Mexico”

  1. Kevin,

    The law is the law, the only problem we have is the application of a without fear or favour prosecution of that law.

    It\’s not much good having the statutes and regs if they gather dust on the shelf and there is a lack of will or purpose on the part of the authorities to be proactive.

    The comparison to aircraft is, the regulations mandate minor and major servicing with inspection by authorities before an air worthiness certificate is issued – apply this to work places and maybe we are on the right track – we do it for cars in most states so what is the difference?????

    There are over 2.3 million business in Australia, by far the majority of them small and micro this is where the concentration needs to be for the greatest benefit. In many cases the education level for the business owners is limited and the demands of keeping heads above water take precedence over all else. Safety where there is a cost concerned is pushed to the back of their minds and is only addressed when an injury occurs or an issue literally forces an action.

    There is not a successful safety campaign aimed at small business which anyone can point to that has shown a marked reduction in any of the main stream injuries. I challenge anyone to identify anything different with clear before and after statistics.

  2. Katrina, the gulf and we are supposed to trust the big end of town. The statement that the clean up will take many months should be many years if not decades, if at all.

    Anyone who believes there will be change from the corporate world without absolute and unabiguous personal penalties of a high order at board level, including manadatory imprisonment for those proven to transgress. is drinking from the chalice of dillusionment.

    We complicate those things that do have simple answers to our own detriment. If you are to undertake a venture such as oil drilling then you know there are inherrent risks of outcomes such as the Gulf of Mexico disaster and the obligation to design the project taking into account all known and other potential risks, rather than the minimalist \”what can I get away with\” attitude we know is the norm through bitter experience, then you must accept the significant penalties of transgression.

    Maybe something similar to the aircraft manufacturing industry where every part and every process is documented for the life of the aircraft and checkable at any point is part of the answer.

    I nearly forgot, politics is involved which in turn means money, which in turn means lobbyists, which in turn means vote buying, which in turn means the world environment and its citizens get \”screwed\” again.

    No wonder we have a world wide Green movement that is a little \”wacky\” on the fringes. All the conspiracy theories that abound about the oil cartels may have some merit. I would like to see an accounting of all of the inventions the organisations associated with the oil industry have bought up to prevent commercialisation, because they may diminish the demand for oil or affect the price.

    1. Tony

      I know several OHS professionals who believe that workplace safety will never get the attention it deserves in companies until a CEO is jailed as a result of a prosecution. I do know that OHS gained considerable attention some years ago in Australia simply through the possibility of Industrial Manslaughter laws being introduced. But, in my opinion, the attention from senior executives and CEOs was \”how do I avoid being charged with this?\” instead of \”Let\’s improve workplace safety so we never have to face this charge.\”

      I will keep my ears and eyes open for an research done in countries that have industrial manslaughter laws that may indicate that the threat of personal prosecution increases the level of safety in companies. My suspicion is that there will be no evidence of improvement.

      That doesn\’t mean that the laws are not valid in increasing the awareness of OHS obligations in senior executives but only that perhaps we expect too much from such laws.

      On your comparison to aircraft manufacturing some OHS professionals and executives would say that such a system is already in place through the amount of internal and external auditing that is undertaken. There are weaknesses in any system but it doesn\’t mean it is a colander. There are many ways to minimise the weaknesses.

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