Davos Notebook

What Davos can learn from BP

By Guest Contributor
January 20, 2011

OILSPILL-BP/COMMISSION

By Christine Bader, who worked for BP from 1999-2008. The opinions expressed are her own.

Next week world leaders will gather in Davos for the annual World Economic Forum to discuss topics ranging from climate change to global risks and economic growth. Looming in the background will be last year’s massive Gulf oil spill, which has serious implications for all of those issues.

In the postmortem analyses of the spill, my former employer, BP, looks like the opposite of a model corporate citizen, having apparently contributed to 11 deaths, numerous other injuries, and the release of over four million barrels of oil into the Gulf of Mexico.

I struggle to reconcile the BP on view today, in which reckless cost-cutting and risk-taking seem to run rampant, with the BP I worked for, which went above and beyond what was required to take care of its employees and neighbors. The latter in no way exonerates the former, but examining the two different faces of the company shows how we can improve corporate behavior — not just of BP, but of business more broadly.

When I moved to Indonesia for BP in 2000, my assignment was to make sure that a planned liquefied natural gas plant would benefit the people of West Papua, the country’s easternmost province on the island of New Guinea.

History showed that communities from Azerbaijan to Zambia have had their hopes raised by the discovery of oil, gas, or minerals in their area, but ultimately reaped little more than corruption and pollution. And West Papua isn’t just any community — it’s home to flora and fauna that don’t exist anywhere else, and indigenous tribes that have had little contact with the West.

BP management gave me an ample budget and license to explore, intrigued by the possibility of creating a new model of development that would exorcise the so-called “resource curse.” At a minimum, they didn’t want the project to be yet another example of how things can go horribly wrong when local relationships turn sour.

I traipsed around villages near the plant site, organizing consultations, studies and programs on everything from education to entrepreneurship. When we learned that one of the plant’s jetties would cross over a site where local residents worshiped their ancestors, our engineers demonstrated their usual problem-solving gusto and rerouted the jetty. This maneuver cost the company money, but much less than the potential cost of conflict.

OIL-SPILL

While my work there wasn’t easy and we didn’t get everything right, an expert panel noted in 2009 that there was strong local support for the project and appreciation among Papuans for the consultations that BP conducted and for the infrastructure and economic benefits the project brought to the area.

That experience led me to believe that corporate and societal interests could be aligned, given the right leadership, staff and resources. My belief was sustained through my next assignment in China, where I worked to ensure that the worker dormitories for a chemicals plant met international safety standards. Through a stint at BP’s headquarters in London, I worked with colleagues in Angola, Colombia, Russia and elsewhere to develop a new human rights policy for the company.

In the U.S., however, a very different BP emerged. In 2005, an explosion at a refinery in Texas killed 15 people. In 2006, the Prudhoe Bay pipeline leaked 200,000 gallons of oil into the Alaskan tundra. On April 20 of last year, the Deepwater Horizon rig exploded.

How could a company that tried so hard to get it right in faraway lands get it so wrong in its own backyard? Maybe BP got complacent in the U.S., given the lack of scrutiny from regulators or anyone else? While the projects I worked on were in new markets that were lucrative but gnarly, eliciting concern from investors, campaigners, and the company itself, perhaps they were much more marginalized than I realized.

We need to demand that companies calculate risks not just for their bottom line, but for society at large — recognizing that in the long run the two are often the same. We need scrutiny of those calculations from all parts of society — not just by lawmakers and regulators (although that would be a good place to start), but by pension funds, neighbors and the media.

We need to understand what motivates companies, for better and for worse. As those at Davos discuss how to create a more sustainable future, we should study not just what BP did wrong, but also what it tried to get right.

Photos, Top: A copy of the report by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling in Washington January 11, 2011. REUTERS/Kevin Lamarque

Bottom: The damaged blowout preventer from the Deepwater Horizon oil rig is extracted from the Gulf of Mexico on September 4, 2010. REUTERS/Petty Officer 1st Class Thomas Blue/U.S. Coast Guard/ Handout

Comments
2 comments so far | RSS Comments RSS

Well stated… Michael Hopkins work in pursuing corporate social responsibility, and our own decade-long efforts in Azerbaijan (www.un-az.org/doc/BGHG_full_report1.pdf  ) brought us into close proximity with BP’s powerful influence in that young nation, and taught us how public and private interests can sometimes be usefully synchronized. But it is a chancy proposition for global mega-corporations, competing in their own gigantic arenas, to place societies’ interests ahead of their own essential profit motives, without intelligent, agile public regulation that seeks to maximize both goals. Above all, people need to pay close and more sophisticated attention to how business is conducted at these levels. Your op-ed is a great example… thanks!

Posted by jesltwit | Report as abusive
 

Your statement supports the behavior taken by BP in the Gulf of Mexico and Alaska.

“Maybe BP got complacent in the U.S., given the lack of scrutiny from regulators or anyone else?”

BP has not demonstrated this behavior in other parts of the world. Our political leadership in the past has fostered this behavior. Unfortunately, they forgot their responsibility is to protect U.S. Citizens. Their focus was to reduce Government Regulations, they did (non enforcement), and open up the opportunity to disaster.

BP accepted responsibility for our poor political decisions and lack of regulatory enforcement. The opportunity to improve is with our american political system. BP has done their part, when will our government (USA)do the same.

Posted by mje091652 | Report as abusive
 

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