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Wednesday, January 17, 2007


Straw Men: More Thoughts On The Baker BP Panel

I reported yesterday on the release of the Baker Panel's 374 page report on the sad state of BP's safety system at its North American refineries. I want to go back and discuss on aspect of the report and the panel's press conference: The assertion that BP deliberately endangered workers by cutting costs in its safety budget.

CNN-Money.com, for example, argued that the report
found no evidence that BP intentionally scrimped on safety in order to cut costs - a charge that has been disputed by the U.S. Chemical Safety and Hazard Investigation Board.
Reuters reported that:
A panel investigating the 2005 deadly explosion at BP's Texas City, Texas refinery (sic) said on Tuesday that the oil major did not purposely withhold spending for safety programs at its U.S. oil refineries

***

"We could not determine that BP ever purposefully withheld resources with respect to safety-related practices," Baker said at a press conference in Houston.
The report itself stated diplomatically:
During the course of its review, the Panel did not develop or identify sufficient information to conclude whether BP ever intentionally withheld resources on any safety-related assets or projects for budgetary or cost reasons. The Panel believes, however, that the company did not always ensure that adequate resources were effectively allocated to support or sustain a high level of process safety performance.
But all of this talk about intentionally cutting safety is what's known as "setting up a straw man" -- creating a position that is easy to refute, then attributing that position to the opponent. It's an argument frequently heard when employers defend themselves against being blamed for workplace accidents, and to fight calls for criminal prosecutions: "No one intended to hurt anyone, we just didn't know," or "We may have overlooked some things, but we never meant to hurt anyone." Drunk drivers don't intend to kill families on their way home from the party either. But try telling that to the judge.

And no one, including the Chemical Safety Board, has accused BP of intentionally cutting safety or deliberately trying to hurt workers. The CSB did present convincing evidence that the company cut back on maintenance and infrastructure that "caused a progressive deterioration of safety at the Texas City refinery" and that company officials knew about many of the safety problems at the plant.
"BP implemented a 25% cut on fixed costs from 1998 to 2000 that adversely impacted maintenance expenditures and infrastructure at the refinery," she said. Maintenance spending fell throughout the 1990?s at the then-Amoco refinery, and following the merger with BP further cuts were imposed. "Every successful corporation must contain its costs. But at an aging facility like Texas City, it is not responsible to cut budgets related to safety and maintenance without thoroughly examining the impact on the risk of a catastrophic accident."

By 2002, an internal BP report had identified the cost reductions as contributing to a decline of infrastructure in Texas City that would require significant investment to correct. These findings were corroborated in a survey of the refinery's safety culture in 2005 just prior to the accident, known as the Telos study. The survey interview with the Texas City refinery manager identified a history of decapitalization and a culture of "things not getting fixed."

"The refinery manager was not alone in this candid assessment," Chairman Merritt said. "Large majorities of the survey respondents reported significant maintenance backlogs that were harming safety. Disturbingly, most employees agreed that 'production and budget compliance gets recognized and rewarded before anything else at Texas City.'"

Economic pressures were evident in numerous decisions that were causally related to the March 23, 2005, accident.
The Houston Chronicle summarized some of the results of the failure to ensure that adequate resources were provided for vital safety-related functions:
  • In the Texas City, Carson and Whiting plants, known equipment problems such as thinning pipes and vessels went unrepaired for months, even years. In Texas City, nearly 200 thickness defects were unaddressed for up to eight years, for example.
  • In all refineries except Texas City, the consultants found that BP's tests of critical alarms and "emergency shutdown devices" were either improperly conducted or overdue.
  • "Action items" resulting from audits or near-miss investigations intended to improve safety often went uncompleted for months or even years, or were overlooked altogether at all five refineries. For example, in Carson about half of the action items generated between 2001 and 2004 remained open at the time of the team's visit last spring. At Toledo and Whiting, some items were left uncorrected for more than a year.
  • At all refineries, BP did not adequately inspect important refinery process equipment, resulting in extensive backlogs. "Some of these backlogs included hundreds of items overdue for long periods (i.e years)," the report said. In Texas City, nearly 400 pressure vessels, piping, relief valves, storage tanks and other pieces of equipment were overdue, for example.
  • After discovering dangerous problems in the pressure relief systems in Whiting, the team found similar problems in Carson, Texas City and Toledo, as well as a lack of understanding of the risks involved.
  • Near misses at all five refineries were not properly investigated, and in some cases not even reported. The team found that "BP was systematically missing opportunities to learn from near misses."
All of which makes me a bit skeptical about outgoing BP CEO Lord John Browne's statement:
Brown defended the company's record. "We've never focused on profits above safety -- safety has always come first" he said.
As Houston Chronicle business columnist Loren Steffy summarized the company's actions:
That's not to say it didn't care about safety or maintenance. It merely had other priorities.
And despite their protests, worker safety really wasn't one of them.

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