Perspective makes all the difference. On this side of the pond, BP – along with its two US partners –made a dreadful error. In the case of BP the causes of the errors were complex. Its boss at the time was trying to change the culture, and make the company more safety aware. BP works with cutting edge technology, drilling for oil in the deep places of this planet. It possesses skills at searching for and releasing oil lying beneath the oceans which are second to none, but inevitably, when you push technology to its limit, you occasionally get it wrong. With the Macondo oil platform, the consequences of getting it wrong were calamitous. BP was unlucky, it could have been a rival, a US firm, for example, but alas BP was the one hit by a bolt of misfortune.
From the perspective on the other side of the Atlantic, the view is quite different. Run by a complacent Brit, “who wanted to get his life back”, BP put profits before all else. It ignored warnings. It allowed a culture to develop in which employees at the firm told their bosses what they thought they wanted to hear. BP was a company that represented all that was bad about corporate culture. Consider this anecdote to illustrate the point. Its partner, Halliburton told BP that it needed 21 metal centralising collars to stabilise cement laid down before drilling. So what did BP, with its attention forever on cost cutting, do? It laid down just six such collars.
There is no doubt that there are companies, individuals and indeed lawyers, in the region of the US affected by the Gulf of Mexico oil spill that have tried their luck. Ads have circulated urging people to lodge claims. Stories abound of firms gaining compensation from BP for the most spurious of reasons. Perhaps their turnover fell in the year of the oil spill, but for reasons quite unrelated to BP. Perhaps their turnover fell because their finance director booked invoices that would normally have been sent in the year of the oil spill into the following year. Perhaps their turnover fell because firms changed their accountancy practice for just that one year.
Is it fair? It depends on the narrative to which you are subjected. If you believe that BP was guilty of huge arrogance, with compete disregard to human life in the build-up to the oil spill, then you might say the company hasn’t changed; that it is shamelessly trying to put the blame on innocent US victims.
If you believe BP was unlucky, and is no more guilty than its two main US partners in the oil project – Halliburton and Transocean – if you believe that its former boss Tony Hayward was singled out by the US because they just didn’t get the British tendency for understatement, then you might feel that the giant oil company has been treated shamelessly by the US system of so-called justice.
The ‘FT’ has run a number of anonymous articles fighting BP’s corner. One article headlined America’s shameful shakedown of BP and said that the “gulf settlement should be fair, not an exercise in extortion.”
Robert Kennedy Jr told the other side of the story. In a recent interview with the ‘Telegraph’ he responded to the argument that BP was being bullied by the US legal system. He said: “They are being picked on as an oil company that wrecked our Gulf and lied about it… I don’t care if it’s a British company or Exxon. I would rather sue Exxon than BP, because I think Exxon is a worse company. But Exxon didn’t do the Gulf spill.” He said damages should be sufficiently punitive that “it gives an incentive to their industry to spend as much money on protecting the safety of the public and the environment as they do on their tax lawyers, who are trying to reduce their tax liabilities.” Now take legal fees. BP forked out no less than $1.5 billion in payments to law firms acting for apparent victims of the oil spill in May and June alone. BP called these charges “perverse and outrageous.”
What it has managed to do is get the US legal system to investigate and former judge and – more to the point – former director of the FBI Louis Freeh is on the case. The Feds, as it were, are trying to see whether BP has a right to cry foul.
Yet federal judge Carl Barbier doesn’t seem impressed with BP’s arguments. The oil company has been accusing the US claims administrator Patrick Juneau and his office of acting unfairly. But Judge Barbier accused BP Boss Bob Dudley of “going beyond the line”, and of making “unfair, inappropriate, personal attacks” on Mr Juneau.
It does seem to depend on the narrative to which you were subjected in the first place.
Supposing, however, the narrative is retrospectively changed. It turns out that had BP followed Halliburton’s advice and employed 21 metal centralising collars, instead of six, it would have made no difference. Soon after the oil spill, Halliburton ran two simulations of what would have happened in the event that BP had heeded its advice, and the simulations showed that the end result would have pretty much been the same. So what did Halliburton do? It asked the people who ran the simulations to destroy them.
Halliburton has been fined $200,000 for its wrong doing, while BP has forked out around $40 billion. Some say there is a disconnection there.
But then that is the snag with narratives. When pieces of the narrative are changed at a later date, the overall initial impression is unaltered. The narrative changes us, and retrospective changes to the narrative don’t reverse the original effect it had on us. If we were to find out years after we first heard the story that that actually Cinderella was a manipulative little so and so, we would probably still think she had an evil step mother and sisters. Not that BP is Cinderella, but there is someone who is as white as the hero from the best child’s story: Dick Cheney, former US Vice President, no less.
Of course Halliburton is essentially honourable; its former boss went on to become US Vice President.
But if your narrative of US history when Cheney was Vice President is a tad cynical, and you view him as something of a war monger, who made Attila the Hun seem like a socialist, then no doubt you will see this as yet more evidence that BP has been screwed by the US legal system, while Halliburton with its links to the very top of the US government, has got away with the tiniest of fines.
© Investment & Business News 2013
The Money Spy 