Ethical Performance
inside intelligence for responsible business


There's no room for smugness: BP's latest failings touch us all

July 2010

We're far from seeing the end of the great BP Gulf of Mexico debacle; indeed the gushing oil has not yet been fully contained. It's therefore impossible to gauge all its costs and consequences. The only thing certain at this point is that it will sit right up there with the worst of corporate catastrophes - one for the annals.

Aside from being an environmental disaster of monumental proportions, the BP spill has shown, yet again, the deeply unhappy effects of a big company failing to grasp its place in society - and the responsibilities that go with that place. If it emerges from this self-inflicted nightmare in one piece, then BP will have escaped more luckily than many victims of the calamity.

Quite a few people have feared something like this coming. For a number of years BP has worn the faded air of a company that once had ambitions of being a responsible business leader but quickly became bored with the whole idea. Perhaps this change in culture began a decade ago, when it unveiled its Beyond Petroleum brand relaunch and, in so doing, substituted a broad developmental perspective for a large measure of greenwash.

One of the results of this focus on style above substance appears to have been insufficient regard for health and safety, greater attention to which might have avoided the current disaster. For an oil company, safety must be the number one priority. Yet even after the Texas City Refinery explosion in 2005 that killed 15 workers and injured more than 170 others, there was no sense that BP had absorbed the lesson. It has done some good things in furtherance of the Voluntary Principles on Security and Human Rights. But as the fall of Enron demonstrated, responsible corporate behaviour cannot be a curate's egg - good in parts. CSR needs to be all-encompassing, with particular attention to the matters most important to your business.

The Deepwater Horizon oil spill must be put down, in the first place, to a failure of leadership. For at whatever level there is a sense of CSR in BP, it does not appear to be within the top echelons. This is reflected even now in the impression, projected most strongly by chief executive Paul Hayward, that the people running the company barely understand popular reactions to the event. There has obviously been no appreciation that a multinational, wherever its home, needs to be aware of all the cultural aspects of operating outside its domestic base.

Oil companies face specific risks, especially as they search in ever darker corners for their lifeblood. But BP's tale could be replicated in any sector. One or another of its faults - preoccupation with PR, inability to read warning signs, cost-cutting above everything else, CSR in some areas but not in others, lack of leadership - can be found in many companies. BP's travails contain lessons for all.

Peter Mason | Global | Business ethics

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