Fresh off chairing the Iraq Study Group, former Secretary of State James Baker has delivered a report to BP regarding the March 2005 accident at its Texas City refinery. Fifteen people died, 170 were injured.
The first one is rather stark from a compliance and governance perspective:
1: The Board of Directors of BP, BP’s executive management (including its Group Chief Executive), and other members of BP’s corporate management must provide effective leadership on process safety. Those individuals must demonstrate their commitment to process safety by articulating a clear message on the importance of process safety and matching that message both with the policies they adopt and the actions they take.
And this item will haunt BP’s board and senior management for at least five more years:
9: BP’s Board should monitor the implementation of the recommendations of the panel (including the related commentary) and the ongoing process safety performance of BP’s U.S. refineries. The Board should, for a period of at least five calendar years, engage an independent monitor to report annually to the Board on BP’s progress in implementing the panel’s recommendations (including the related commentary). The Board should also report publicly on the progress of such implementation and on BP’s ongoing process safety performance.
I wrote about the BP legal response previously.
The recent announcement that BP CEO John Browne would be stepping down later this year doesn’t seem entirely unrelated. Further management changes are ruled out for the time being.
The energy business is ferociously intolerant of operating mistakes, given the volatile nature of the materials being handled. This reality drives most industry companies to obsess about safety. Better having engineers on the site sooner rather than lawyers drafting a report later.