The Risk-Monger

Another environmental disaster, this time in the Gulf of Mexico, and industry again is getting its image pummeled by the media, concerned (and embarrassed) politicians and opportunistic environmental activists. There will be plenty of time and plenty of blame to go around, and the lawyers are already carefully advising companies on how to wordsmith their statements (eg, BP is responsible but not liable). Whatever their lawyers will come up with though, we need to ask: How many more disasters does BP have to be involved in before we find a way to say ‘Enough’.

Texas City was no accident, nor was the Thunder Horse disaster in Prudhoe Bay. The US authorities had chastised BP for a litany of safety and security breaches (even during the Bush years) and have imposed a catalogue of fines and investigations. Should we just accept their mea culpa now and trust their promise that they will be better? BP spends an enormous amount on PR – a nice sunny logo suggests that they are beyond petroleum, but their investment record there is dismal. They chose instead to pimp their reputation in tar sands, trader irregularities, shoddy alliances with questionable partners and cutbacks in safety standards. Consultants and lawyers love to fill their timesheets with clever projects that defend the indefensible, but the reality is that the company never had the intention to change nor the integrity to admit it.

A few years back I was marginally involved in an exchange of assets with BP. What was particularly difficult was to negotiate with an organisation that did not have a human resources department. BP outsourced its HR. What sort of company outsources human resources? One that doesn’t give a toss about anything other than making profits. They have a cut-back and cut-throat culture that makes them competitive, but not socially responsible. They do the bare minimum (or even less) to comply with the laws, try to change the laws, cut corners to maximise their profits and then get the lawyers out to twist things around when things understandably go wrong. They are opportunistic beyond the bounds of integrity. This is the image of BP but many people stereotype this as the image of industry.

Companies, like people, come in many stripes and colours. Their visions and cultures can range from unbridled opportunism to measured and sustainable interaction with clients and communities. Some companies and CEOs have committed themselves to improving standards, voluntary commitments, innovations that add value to society and avoid relationships that could damage their integrity or culture. They make a business case for CSR and lead their industry as a whole to new targets. I saw this when I worked at Cefic with leaders driving product stewardship and Responsible Care forward. But if a laggard like BP or, later, INEOS, were in the room, they would often fight to lower these targets or pay nothing more than lip service to them. They had bills to pay (especially after “Ratcliffe’s Revenge”) and margins to increase.

Industry associations are forced to move to the lowest common denominator and so they were often successful in stopping sustainability initiatives. When markets tighten, and BP’s profitability goes up compared to the competition, shareholders of other companies put pressure on their companies to abandon voluntary commitments and social responsibility. In other words, BP’s cut-throat culture drags down entire industries. This will continue to happen so long as such a culture in such a company continues to thrive. What happened in the Gulf of Mexico was not the fault of industry, it was the fault of BP (and it will happen again).

Now that BP is twisting in the wind, I cannot resist the chance to pontificate. I am doing my gardening and I know that my flower bed will grow better if I pull out the weeds roots and all. This needs to be done to BP in order to let the rest of the industry improve and thrive. Whether it is through the stock market, the legal and moral Gulf cleanup bill or through customer boycott, BP is a weed that should be yanked as hard as possible. It would create a text-book case study for generations of business ethics students to come.

As Obama has his boot to BP’s throat (an image I just can’t get out of my head), I would only kindly ask him, for the sake of industry as a whole, to press a little harder.

Tweet about this on TwitterShare on Facebook0Share on Google+0Share on LinkedIn0
Author :
Print

Comments

  1. Interesting piece, thanks for the insider point of view and the welcome words on BP’s track record.

    But you need some more training on gardening: pulling one weed out, roots and all, is a satisfactorily but very short-term measure. Eradicating the entire species is beyond your means. Using selective chemicals and GM herbicide-resistant flowers will look good but you’re creating a biological desert (and you’re trapped into spending a lot because you will need to buy more and more herbicides to combat the weeds that will develop a resistance to it, and to buy costly high tech seeds that usually cannot reproduce themselves naturally).

    The only way to efficiently and sustainably combat weeds is to change the structure of your garden:
    1) accept that weeds, unlike companies, are living beings that also deserve – and need – some space somewhere. Maybe the weed you’re pulling out is an efficient repellent for other pests… and 90% of European plants called “weeds” are in fact edible!
    2) change the structure of your soil by covering it with thick layers of wooden waste: this will considerably reduce weeds’ ability to grow, ease the weeding because their roots will be very weak, and fertilize your soil. You can also use cardboards to prevent light from getting in.
    3) Prefer local plant species, that will efficiently cover the soil and prevent undesired ones from settling in.

    In other words: as long as you’ll have shareholders structurally able to demand a high short-term return on their investment, you’ll have companies outsourcing their HR and paying lawyers or PR companies to cover up their wrongdoings. Persons and companies come in varied shapes and colours, but as long as the legal structure of companies doesn’t change, honest and responsible guys and companies will be losers. There’s no room for morals here.

  2. My dream is to have a garden in the tropics but I am stuck in Belgium. Rather than trying to plant a garden that won’t take and then get bitter when my mimosa won’t flower in the cold damp, I need to focus on what can be done with what I’ve got (which admittedly includes a lot of weeds). I am not able to move to the tropics so I need to focus on the little things I can do here.
    If shareholders lose all of their money with BP, they may think twice before investing in a company with no genuine regard for social responsibility. (Two years ago, the Rockefeller family raised serious points and almost upset the Exxon AGM.) If the next generation of business school students learn the BP case study, corporate integrity will not be considered as optional.
    … but if that case study concludes by showing how the lawyers and PR managers saved BP, then I had better get used to dandelion salad!

  3. Interesting thoughts, I’m preparing an MBA assignment on BP and what they say they do in relation to John Ruggie Framework, what the reality appears to be and what NGOs think of them. I imagine you a whole world of thoughts on this!

    1. Challenging subject Johanna. I suspect that if a BP PR manager would read Ruggie’s UN guiding principles on human rights, he or she would jump to the conclusion that this would be a good project management exercise, and assign it to some middle manager with a budget for a consultancy to prepare a report. That human dignity would be built, root and branch, into every aspect of a BP employee’s DNA would require an intensive HR revision (requiring an internal HR department rather than a project manager). Inconceivable. As for how NGOs think about BP, well, as I had predicted, the cynical BP strategy of paying off NGOs has paid dividends – see another blog on that one.

Comments are closed.