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BP: stonewalls before Congress « Previous | |Next »
June 20, 2010

The media continues to provide images of dead wildlife, fouled marshes and beaches, losses to owners of employees and small businesses, and continuing reports that BP is putting the health of cleanup workers at risk by continuing to refuse to allow respirators to be used and providing inadequate safety training in the face of evidence of health risks.

BP has continued to deny reckless behaviour towards safety ---cutting corners to save money---to a hostile House energy and commerce committee. Despite BPs’ awful record of safety risks, the CEO, Tony Hayward, knew zilch--he wasn't party to individual decisions.

BrownDBP.jpg Dave Brown

It's the standard corporate defence--"I don't recall." That did nothing to assuage the anger in Congress. Hayward's stonewalling was partly an attempt to avoid admitting liability, with both civil and criminal charges a possibility. It has been estimated that the total cost of the spill could range from $40bn to $100bn, much more than the $20bn that BP has agreed to ringfence into an escrow fund.

Industry experts warned that the out-of-control well will go on spewing oil into the Gulf of Mexico for the next two years or more if all attempts to contain or plug the gusher fail. The US government's present flow estimates is now up to 60,000 barrels a day or more. A relief well is the only sure way of stopping the gusher. Is this a case of gross negligence?

The problem for BP in this conflict of public good versus toxic industry is that it has not been straightforward with the government or the American people about the size of this spill. Ed Markey, the Democratic head of the House sub-committee on energy and the environment has said that "first they said it was 1,000 barrels, then they said it was 5,000 barrels, now we are up to 100,000 barrels."

So BP, with its horrid safety record, has misrepresented its commitment to turning a new leaf. Many however, are defending BP (corporate capitalism) by blaming the regulators. True, they didn’t do their job. But BP still bears primary responsibility for the oil spill.

| Posted by Gary Sauer-Thompson at 11:31 PM | | Comments (9)


BP seemed to believe its cover-up strategy would work: that by shooing people away from beaches, putting gag orders on clean-up workers, and preventing scientists from estimating the size of the leak, it could somehow reduce the bad PR and damages. And as they always do, the cover-up simply made BP look even worse.

The whole episode is an interesting case study in the extent to which corporations are literally uncontrollable in certain circumstances, and the inability of the nation state to hold anyone accountable for corporate actions that cause untold damage.

"Many however, are defending BP (corporate capitalism) by blaming the regulators."

Big corporations, including Big Oil, have engaged in an active campaign to weaken regulations and assure complacency at the regulatory bodies in the US. And their argument to legislators and the public was that they were capable of operating responsibly, and (supposedly) their incentives were aligned that way.

The Republicans are critical of the Obama administration for pushing BP for a $20 billion compensation fund---they call it a Chicago-style political shakedown. They have aligned themselves with Big Oil.

It's part of the old divide--Which do you trust less – Big Business (including Wall Street) or Big Government? The Republican offensive is always directed against Big Government.

In the face of the worst environmental disaster in American history, the Republican's trust in Big Business (and Wall Street) more than trust in Big Government” looks bizarre.

One of the benefits of the corporate form is that it gives giant corporations the ability to escape liability.

Gary the issues go beyond liability; in circumstance like these corporations are totally unaccountable because the outcomes are systemic. Congress can engage in charades like having the CEO appear if it makes them happy, but when he says he has no idea what happened or what's going on now I'm sure he's telling the truth. Lots of individuals are doing the tasks in their job descriptions, thanks to very complex organisational systems, but nobody is capable of controlling the whole organism. A large corporation is a complex adaptive system and its behaviour will be independent of anything politicians or managers try to dictate. Tony Hayward can no more ensure any particular outcome than General Petraeus can dictate the outcome of military operations in the Middle East. Uncertainty theory tells us that the complex adaptive systems involved are dynamic and will respond in ways that can be neither controlled nor predicted.

Poor old Goya...
As to the comments, yes, yes, yes; in spades!

your comments take things to a deeper level--- to the core of corporations driven by profit operating in a capitalist economic system.

Given what you say---and I agree with the comments-- then the issue becomes one of democracy over capitalism.

This entire issue with BP is insanity. The amount of petroleum spewing into the Gulf of Mexico sprung up by thousands of drums Wednesday right after an underwater droid seemingly hit the containment cap that has been getting petroleum from BP's Macondo well. I wonder how much devastation this whole oil spill is going to cost the gulf when it's all over