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Daily Telegraph: Business comment: The day lackadaisical BP’s good luck finally ran out

By Damian Reece, City Editor
Last Updated: 12:29am GMT 17/01/2007

It was a chilly morning that dawned in Houston yesterday, suitable weather for the cold, stark reality of BP’s failings exposed in the Baker report. Home-grown companies gave Americans probably their worst financial scandals of the past 20 years in Enron and WorldCom, but it was an ostensibly British company that gave the US one of its most serious workplace disasters of the past two decades.

It turns out that Lord Browne has been presiding over a scandal waiting to happen – a dangerous place to work where management did not provide adequate resources for safety and where there was a lack of accountability.

Lord Browne’s BP, according to the eminent members of James Baker’s team, didn’t even do the simple things when it came to important elements of safety, and tolerated “serious deviations” from safe practices. It was complacent toward serious risks and allowed its people to operate in the dark when it came to safety best practice. It failed to act properly on safety information it did have. There have been executive management failings and failings at board level, a group led by BP chairman Peter Sutherland. Things were so bad that there was a “substantial gulf” between the reality of BP’s safety management systems and the company’s flawed perception of its own performance.

Perhaps worst of all was BP’s failure to learn from past mistakes, notably those from its Grangemouth facility in Scotland which date back as far as 2000. In late May and early June of that year a series of dangerous incidents occurred including a fire and a power failure which disrupted production. As far as the Texas blast is concerned, the Baker report found that: “Many of the process safety deficiencies are not new but were identifiable to BP based upon lessons from previous process safety incidents, including process incidents that occurred at BP’s facility in Grangemouth, Scotland in 2000.”

Despite its record of accidents, BP had become complacent. In the words of the Baker report: “People can forget to be afraid.” The deaths and maimings at BP’s Texas oil refinery was the inevitable, grim reminder that such a lackadaisical company would inevitably receive.

The Grangemouth investigators found it was only thanks to “good fortune” BP avoided serious injuries in 2000. On March 23, 2005 luck finally ran out for the 15 people who lost their lives and the 170 people injured.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/01/17/ccom17.xml

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