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代寫case study:Ethics and Governance Summative Assessment: A c

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核心提示:代寫case study:Ethics and Governance Summative Assessment: A case study about BP-The Baker report, commissioned by BP, tries to explain what happened. James Baker, formerly U.S. Secretary of State, set out to assess the sa
FN0360 Ethics and Governance Summative Assessment: A case study about BP (Texas City) “I’m absolutely the first to apologize for any distress caused by … the Texas City tragedy.” (John Browne) On March 23, 2005, 15 BP workers in Texas City were killed by a huge explosion. 170 were injured. ‘Texas City’ is a vast agglomeration of BP refining and processing facilities in Texas, U.S.A., acquired by BP when it purchased Amoco in 1998. The Baker report, commissioned by BP, tries to explain what happened. James Baker, formerly U.S. Secretary of State, set out to assess the safety culture of BP. His report administered a humiliating public rebuke to BP. There were occupied trailers too close to an isomerisation unit (‘isom’) that handled hazardous materials. The ‘blowdown’ drum on the unit could have been fitted with a flare, so that highly flammable liquid would burn off, not leak into the atmosphere. The drum was built in the 1950s and refitted in 1997. Before then, and since, it operated without a flare. Long before BP acquired Amoco, there was an explosion waiting to happen.
Baker savaged BP. He concluded that its problems were systemic; worker-management relations had broken down; safety resources were insufficient; and BP’s focus was short term: “Both at the corporate and at the refinery level, BP has not demonstrated that it effectively held executive management, line managers and supervisors accountable for process safety at its 5 US refineries.” BP’s chief executive, Lord Browne, says he is determined to reform the company but days before Baker’s report, he announced that he will retire sooner than planned. He said his decision to retire early had nothing to do with the report. John Manzoni, BP’s global head of refining and marketing, insisted he would not be resigning. • August 17, 2005 US Chemical Safety and Hazard Investigation Board (CSB) demands that BP form an independent panel “to assess and report on the effectiveness of BP North America’s corporate oversight of safety management systems at its refineries and its corporate safety culture” • October 24, 2005 Formation of BP’s (US refineries) Independent Safety Review Panel (‘Baker Panel’) is announced, aiming to reach conclusions that would “affect the industry worldwide” • October 27, 2005 CSB issues preliminary findings on BP Texas City refinery incident • December 9, 2005 BP issues its own report, promising to invest $1bn at Texas City • January 16, 2007 Baker Panel issues its final report in Houston, Texas • February 14, 2007 Financial Times reveals existence of Wilhelm Bonse-Geuking’s report ? March 20, 2007 CSB issues its final report An ‘isom’ at Texas City was overfilled during start-up. Vapour ignited. The inferno at Buncefield oil storage depot in Hertfordshire in 2005 was caused by overfilling a tank. No one was hurt. A catastrophic explosion in Toulouse at Total’s chemical plant in 2001 killed 30 people. The cause was poor storage of ammonium nitrate.
Oil, some say, is and always will be a risky industry and, if we want cheap fuel, people are going to die. That is monstrous. As technology improves, expectations of safety rise and our tolerance of error falls. Sophisticated process control is part of the answer but our ability to manage human behaviour has not improved nearly enough. At the inquiry into the 1988 Piper Alpha disaster that killed 167 oil platform workers, Lord Cullen said risk should be as low as reasonably practicable. The legal test is a balance between effort expended to reduce risk and the amount of risk abated: an employer should not be expected to take safety measures that create a “gross” disproportion of effort to produce a minor improvement in safety. Companies cannot, after all, ignore business and financial cycles. Oil, though, is an industry that prides itself on its ability to manage cycles, but sometimes margins are desperately slim. In 1998, oil had fallen to $10/barrel, below the cost of running a rig. For the oil majors, the mantra was simple: squeeze more cash out of a well, or plant, by cutting costs to the bone, and delay all but essential expenditure. More cash from shrinking assets: higher returns. Carolyn Merritt, chair of the CSB, squarely blamed the Texas City fire on “the drastic effects of corporate cost-cutting”. BP will spend heavily over the next few years to restore its reputation. It can afford to do so now, but that will not always be true. Who will prise open BP’s purse in the next oil price collapse? Safer energy is possible but not probable - unless we pay a whole lot more. The CSB Report In a damning final report into BP’s safety culture, divided into technical findings and organisational findings, the CSB found that: • budget pressures impaired safety performance; • internal audits and studies had revealed serious safety problems at Texas City; • the audits were shown to executives in London, including Manzoni. BP disagreed strongly with parts of the CSB report but said its own investigation's findings were "generally consistent with those of the CSB". However, spokesman Ron Chapman said, "The BP Texas City fatal investigation team [09/12/2007] did not identify previous budget decisions or lack of expenditure as a critical factor or immediate cause." He said maintenance spending at Texas City had risen 40% over the previous five years. It was higher than the industry average per barrel. The CSB, America’s leading chemical accident investigator, said years of cost-cuffing and low investment left BP’s Texas City refinery vulnerable to the catastrophic fire. The CSB found that organisational and cultural deficiencies at all levels of BP’s hierarchy were responsible. The CSB is also critical of Occupational Safety and Health Administration (OSHA), its sister regulator, for its lax performance at Texas City. OSHA is America’s occupational safety ‘watchdog’. The CSB said OSHA failed to see warning signs. "Rules already on the books would likely have prevented the tragedy in Texas City," Merritt said. "If a company is not following those rules, it is ultimately the responsibility of the government to enforce good safety practices before lives are lost." The CSB calls for “comprehensive inspections” and controversially urged OSHA to adopt a new policy requiring companies engaged in major change, such as mergers, to conduct mandatory process safety reviews, as a matter of due diligence. The recommendation of a review of the safety impact of mergers and corporate restructurings will cause eyeballs to bulge on Wall Street.
The CSB found that warning signs were present for years, but BP’s chief officers did not intervene appropriately. The CSB reviewed more than 30,000 documents, conducted 370 interviews, tested instruments and assessed damage. In its first ever examination of corporate safety culture, the CSB adopted the model used by the Columbia Accident Investigation Board in its inquiry into the causes of the loss of the space shuttle Columbia in 2003, going beyond mechanical failures and human error: “Simply targeting the mistakes of BP’s operators and supervisors misses underlying and significant cultural and organisational causes of the disaster, factors that have a greater preventative impact [than identifying operational mistakes].” The accident happened when a crew tried to start up the raffinate splitter tower in the ‘isom’ after a maintenance shutdown. Flammable hydrocarbons were pumped into the tower for three hours but no liquid was removed, contrary to proper procedure. Moreover, alarms and instrumentation provided false indications. Unknown to the crew, the 170ft tower was overfilled and liquid was discharged into a ‘blowdown’ drum with a 113ft ‘smokestack’ venting to the sky. The drum overfilled, leading to a geyser from the stack. “This blowdown system was antiquated and unsafe; originally installed in the 1950s, it had never been connected to a flare to safely contain liquids and combust flammable vapours released from the process.”
The liquid formed a vapour that condensed and fell to the ground, where it was probably ignited by backfire from an idling truck. The fire killed people working in and around trailers nearby. The CSB found several technical failures that caused the accident, notably: failure of the alarm on the tower level indicator; absence of any other indicators or automatic safety devices; inadequate control board display; lack of supervisory oversight and trained personnel; fatigue of operators working 12-hour shifts for 29 days; and the location of trailer-type accommodation too close to the ‘isom’ unit. The CSB found that BP had failed to fit blowdown drums and stacks with a flare, despite a series of incidents and a written warning (‘citation’), by OSHA, that the drum and stack were unsafe. In the years before the incident, eight serious releases of flammable material from the ‘isom’ occurred, uninvestigated.
“In 2002, BP engineers proposed connecting the blowdown drum system to a flare but BP chose a less expensive option.” During project development for construction of a naphtha desulphurisation unit (NDU), a link between the ‘isom’ and the NDU flare was proposed. There was discussion whether future regulation might require a flare to control emissions. In an e-mail, the refinery manager vetoed the expense, ruling: “Bank the savings in 99.999% of the cases.” In its organisational findings, the CSB report concludes: “Cost-cutting and budget pressures from BP Group executive managers impaired process safety performance.” BP relied on personal injury statistics that fail to provide a true picture of process safety. BP exhibited a “check-box mentality” - personnel completed paperwork and checked off on safety policy and procedural requirements, even when those requirements were not met. The CSB said that BP lacked a learning culture and failed to respond to its own surveys and studies that had revealed deep-seated safety problems. Merritt said: “Beginning in 2002, BP commissioned a series of audits that revealed serious safety problems, including a lack of necessary preventative maintenance and training. These audits were shared with BP executives in London, and were provided to at least one member of the board.” In its report, the CSB refers to a study in 2002 initiated by the new Texas City director, who observed that the plant’s infrastructure was “in complete decline”.
The study expressed “serious concerns about the potential for a major incident due to the large number of hydrocarbon releases [over 80 in the 2000-2001 period].” The CSB also refers to a follow-up report in October 2002: the Texas City Refinery Retrospective Analysis (TCRRA). It found that “current integrity and reliability issues at Texas City are clearly linked to the reduction in maintenance spending over the last decade”. Citing internal BP documents, including safety audits, e-mails and surveys commissioned by BP, the CSB concluded that a cut of 25% in fixed cost ordered by Browne, after the Amoco takeover, played a role in making Texas City “vulnerable to catastrophe.” Capital spending fell 54% between 1992 and 2000, and maintenance spending was reduced by 41%. Browne introduced a target to cut fixed costs by 25% more over 1999-2000. According to the CSB, one manager at another refinery refused to implement it. He thought it unsafe. However, Texas City came close to reaching the target. The CSB report states: “Items cut included turnarounds, safety committee meetings, plant maintenance and training courses. Safety and maintenance expenditures were a significant portion of the cuts.” In October 2002, BP’s group refining vice-president warned refinery managers that the financial state of the refining business was in “crisis”. The Texas City West manager, responsible for the ‘isom’ unit in the 2005 disaster, then instructed further expenditure cuts, including training. The CSB says BP failed to maintain equipment adequately, and that the number of training staff at the plant had been cut by 73%. Merritt blamed the explosion on "ageing infrastructure, overzealous cost-cutting, inadequate design and risk blindness." Her initial findings showed that cuts “adversely impacted maintenance expenditures and infrastructure. Every successful corporation must contain its costs. But at an ageing facility, it is not responsible to cut budgets without thoroughly examining the risk of a catastrophic accident. BP's global management was aware of significant safety problems well before March 2005." Browne and other directors "did not exercise effective safety oversight. The big problem is that we did not find any evaluation, by anybody, at any level, that said these cuts were impacting safety. BP had said in their early report that this was a one-off, that Texas City was unique in these problems. From my experience and the experience of our investigators, we didn't believe that could be the case."
She said suspicions were raised when the investigation team found evidence of "failure to identify very serious near-miss accidents ... and problems with equipment that was not repaired". Programmes designed to protect staff and the public, Merritt said, "deserve the same level of attention, investment, and scrutiny as companies now dedicate to maintaining their financial controls. The combination of cost-cutting, production pressures and failure to invest caused a progressive deterioration of safety at the refinery." In September 2003, an audit entitled Getting Health, Safety and Environment Right found assets at Texas City in a poor state and identifed a problematic “cheque-book mentality.” Insufficient to meet clearly identified risks, budgets needed topping-up by discretionary supplementary payments. In 2004, BP ordered a 25% budget reduction ‘challenge’ for 2005. Texas City management wanted more funds but initially headquarters denied the request. The plant manager negotiated a reduction in the cut demanded, by half, but the attitude in London affected workforce morale. An internal presentation on safety in November 2004 included a slide show entitled Texas City is Not a Safe Place to Work. Photos of 23 workers killed at the site since 1974 were displayed.
The CSB also cites a report from the Telos Group, a safety culture consultancy, which surveyed 1,080 workers and interviewed 112, including plant leaders and supervisors, in 2004. Telos said that it had never seen such “intensity of worry” among those “closest to the valve.” BP’s own documents reveal the terror of local managers, convinced that catastrophe was imminent. Two weeks before the explosion, Texas City executive Joe Barnes waved a desperate red flag in an email: "I truly believe that we are on the verge of something bigger and that we must make critical decisions tomorrow morning over getting the workforce's attention around safety." Until recently, senior BP officials in London were pointing to local failings among staff at Texas City. Local staff “were blind to safety,” was the view in London. The Baker Panel noted that BP had not always provided adequate resources to ensure process safety. The CSB’s report goes further, linking the accident to determined penny-pinching. BP indicated its “strong disagreement with the CSB report, particularly many findings and conclusions”. The Baker Report Browne thanked the Baker Panel members for "their insights and their recommendations. We asked for a candid assessment from this diverse group of experts and they delivered." BP said it was putting in place all the recommendations of the Baker report, adding that it had taken "significant steps" to improve safety at its US refineries. Baker found that "BP mistakenly interpreted improving personal injury rates as an indication of acceptable performance at its US refineries. The Panel found instances of a lack of operating discipline, toleration of serious deviations from safe operating practices and apparent complacency at each refinery." Yet speaking after publication of his report, Baker said the Panel "did not find any deliberate or conscious efforts on BP's part to short-circuit safety". Baker says BP failed to act on known safety information. There were management failings and failings at board level. There was a "substantial gulf" between the reality of BP's safety management systems and BP's perception. "People forget to be afraid. Many of the process safety deficiencies are not new but identifiable, based upon lessons from previous incidents, including incidents at BP's facility in Grangemouth, Scotland in 2000." Grangemouth was plagued by incidents, including a big fire in 2000 and an explosion in 1987 that killed two workers. Baker concluded that BP’s failure to learn from mistakes there contributed to the deaths of 15 workers at Texas City in 2005. His investigation found that insufficient attention was paid to process safety by managers, executives and the board of directors. The report emphasizes repeatedly that safety systems and monitoring to ensure worker safety were not as rigorous or effective as the company believed. During 2000, there were three significant incidents at Grangemouth and a subsequent Health and Safety Executive (HSE) report “suggested major weaknesses in monitoring, audit and review” of safety. Baker concludes: “The Panel considers similarities between the Grangemouth and Texas City incidents to be striking: lack of leadership and accountability, insufficient awareness of process safety, inadequate performance measurement, a safety program too focused on personal safety and failure to complete corrective actions. Many underlying deficiencies identified after both incidents appear to be the same, especially as they relate to evaluating process performance and then taking corrective actions.” Baker discusses how the company’s safety culture concentrated on reducing personal injuries. The success of this system was monitored by studying injury data.
This lulled the company into a “false confidence that [it] was properly addressing process safety risks”. The problem was compounded by ‘initiative overload’, created by management directives to improve operations, without the extra staff required to do so. However, the report does not find that BP cut safety costs deliberately: “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.” Baker’s report does, however, say that BP’s entrepreneurial corporate culture, which enabled it to increase its market capitalization five times to more than £100bn in a decade, contributed to the problems: “BP tended to have a short-term focus. [Its] entrepreneurial culture delegated substantial discretion to US refinery plant managers, without clearly defining process safety expectations, responsibilities or accountabilities. BP has not provided effective leadership in making certain its management and US refining workforce understand what is expected of them regarding process safety performance.” BP’s board of directors does not escape censure. Baker calls for it to improve its “oversight of process safety” at refineries. Production targets, operational goals and budgets were the priority at BP’s US refineries, not safety. That was the interpretation of extensive interviews conducted by the Panel with hourly-paid workers and middle management at its five US refineries at Toledo, Texas City, Whiting, Carson and Cherry Point. The Panel found that attitudes differed by location and by seniority. For example, at Toledo, senior managers said that cost savings and production targets did not override safety. Lower down the chain of command, the perception was different. “Toledo hourly-paid workers widely believed that production was a higher priority than process safety.” Questioned last February, Texas City hourly-paid workers stated that profit came before safety and many managers interviewed by Baker’s investigators agreed that production had been a priority. Meeting output targets seems to have become a ‘cult’ at Whiting, where those interviewed spoke of their “can-do” culture: doing whatever it takes to keep the refinery running. “Whiting management acknowledged the problematic ‘culture of heroism’ and is trying to change the culture to one of planning and compliance - scheduling work and getting it done in an orderly manner.” Conclusion In 2000, BP had just completed the takeover of Arco. BP had timed its takeover well but oil prices were low and it needed brutal efficiency to keep its share price from being dragged down. Its drive for optimizing performance at the local level was called ‘self-help’. Self-help took two forms: extra barrels; and cost-savings. In 2000, BP boasted that it had generated $2bn in cost-savings and then in 2001 Browne announced a further $2bn in performance improvements. By late 2002, $1bn extra was saved and Browne announced $2bn stock repurchases, the effect of which is to improve earnings per share (EPS).
Amoco had kept Texas City managers on a tight leash as it tried to improve its financial performance. When it took over, BP strove to ensure that billions of ‘self-help dollars’ bolstered its annual results, with hardly a penny for anything except essential investment. BP had a culture of stumbling from crisis to crisis. Its management had lost confidence in its core activity: refining oil was seen as chronically unprofitable. In 2000, BP rebranded itself: it was to go “Beyond Petroleum”. BP spent $100mn in one year promoting the idea that it had left behind the ‘pots, pans and pipes’ of a dirty, smelly business. By erecting solar panels on petrol stations, it tried to distract attention from its clutter of ageing refineries, rusting and starved of cash. Supplementary materials 1. date consecutive articles on the sequel to the CSB and Baker Reports 2. Extracts from Lord Browne’s memoirs and a review dated 09/02/2010 3. One employee’s story Supplementary Materials: 1 25/03/2005 Lord Browne arrived in Texas yesterday morning. An explosion occurred the day before yesterday that killed at least a dozen people when contractors were attempting to bring a unit on line that had been closed for maintenance for several weeks. "It is the worst tragedy I have known during my time with the company," said Browne. "I spent the morning with the men and women that operate and maintain the refinery. I heard harrowing stories but the team is in very strong spirits. "I have come to assure everyone that the full resources of BP will be made available to investigate the causes of this tragedy." Manzoni also flew in. A spokesman said only a "tiny part" of the 12,000 acre site was affected; the refinery would stay open.
Asked whether the explosion was a tragedy waiting to happen, Browne said: "I don't believe so. All events are investigated and remediation is done after any event. There is no limit to the action we have undertaken. If there is more to do, we will do it." Don Parus, the site manager, said: "It's a sad day for BP." BP said the isom unit had been working normally before the explosion. 12/12/2005 BP’s own report on Texas City has blamed "management failures" and "employee mistakes." It said that the working environment at Texas City "had eroded to one characterized by resistance to change, lacking trust, motivation and a sense of purpose". 29/08/2006 Judge Criss of the 212th Judicial District, Galveston, Texas, ruled that Browne and Manzoni must give depositions in the civil law-suit brought by survivors and family members of workers who died in the explosion. BP will appeal, said Art Gonzalez, a lawyer with Brent Coon & Associates (BCA). "The judge ruled that both Browne and Manzoni have unique and superior knowledge," he said. BP has broadly accepted responsibility. The oil giant has settled with many victims but is fighting the claim that the accident resulted from gross negligence. BP has tried to restrict lawyers’ access to Browne and other senior executives because they don't have ‘unique’ knowledge. Earlier this month BCA took a deposition from BP Global Refining Vice President Mike Hoffman. 10/09/2006 BP has promoted a new head of US operations, Bob Malone, to sort out safety and environmental troubles. "I am not going to [blame] bad luck. If we have to further enhance our safety value system, we will." His own pay fell 10% last year because of a change in BP's safety compliance regime which encourages contractors to report incidents. That lowers the group's safety rating, and therefore bonuses. Malone’s appointment signals that US operations, roughly 40% of the company, can no longer be treated as just another subsidiary. "For 10 years, the US has had very weak central leadership. Browne is trying to remedy that with Malone’s appointment," said one analyst. 8/10/2006 Browne has been told, again, to testify on oath over BP's Texas City refinery explosion. Another judge has ruled that plaintiffs can seek a deposition from him in their case against the firm. The ruling by District Judge Kent requires that over the next three weeks Browne makes six hours available to lawyers, in his London office. BP’s spokesperson said: "We respect the judge's decision and are weighing the options." "Primarily there will be questions regarding the budget and why, for years running up to the explosion [Browne] ordered 25% budget cuts," said Tony Buzbee, the plaintiff's lawyer. 9/11/ 2006 Eva Rowe, who lost both parents in the explosion at Texas City, has settled the only remaining lawsuit arising from the incident. BP spokeswoman, Sarah Howell, said: "We are deeply sorry she had to go through an ordeal like this and truly regret her loss." Rowe’s lawyer, however, said the secret settlement included stipulations that BP make the refinery and other facilities safer.
Part of the financial settlement will be used to establish university endowments. Settling the Rowe case lifted the immediate threat of other damaging documents being made public, and averted the prospect of Browne having to testify. 26/11/2006 To help restore belief that its top-brass share a coherent vision, BP has hired Tony Podesta, a heavyweight ‘spin doctor.’ A lobbyist at Podesta Mattoon, Podesta is one of Washington's canniest ‘movers and shakers.’ However, observers say lobbyists are adding to a febrile atmosphere by siding with factions within the company. Podesta is allegedly Manzoni’s man. Manzoni’s reputation took a hit from email he wrote after the Texas City explosion. "I arrived in Texas City at 3 am along with Lord Browne. We spent a day there at the cost of a precious day of my leave." Revealed in October, this was among documents forced into the open by court order. 11/12/2006 Documents dragged out of BP by bereaved families' lawyers show there had been 23 deaths at Texas City in 30 years. The local fire brigade says there were 50 fires a year. The refinery's director, Don Parus, felt the place was patched up with "band aid and super glue". He told a confidential safety commission before the accident that "killing somebody every 18 months seems to be acceptable at this site" and he wondered why staff turn up for work. The training budget at Texas City was reduced virtually to nothing. There was no money for a new emergency response system that BP's fire manager insisted was needed. Amoco had earmarked the blowdown drum for removal on safety grounds in 1992. One internal email, disclosed by The Guardian on Saturday, suggests that Browne knew of problems at Texas City as early as 2003 and that he was personally monitoring the site's monthly safety statistics. BP said it had "no evidence to support" the assertions in that email. 12/12/2006 A website set up by lawyers is publishing more damaging documents that show that Browne knew of the poor safety record at the refinery. 19/12/2006 Tony Hayward, BP’s global head of exploration and production, has made comments to a couple of hundred employees at a ‘town hall’ meeting of its exploration staff in Houston, Texas, on December 8. Hayward’s critique of BP’s top-down culture and obsession with cost-cutting is devastating. “We have a leadership style that is too directive. The top doesn't listen sufficiently well to what the bottom is saying." His remarks were put on the BP intranet anonymously. "Quite a lot of work," he said, remains to be done for BP’s plant, equipment and processes to meet safety standards. "The front line teams, I think, have lived too long in the world of making do and patching [quarter by quarter], rather than really thinking about how we are going to maintain a piece of equipment for the next 30 or 40 years." He also said the firm's cost-cutting "mantra of 'more for less' ...needs to be deployed with greater judgment and wisdom. When it isn't you run into trouble," he added. His remarks look like an attack on Browne, just as he braces himself for the Baker Report. Cynics say Hayward knew his remarks would mark a public break with Browne, putting him ahead in the race to succeed him. BP said: "Tony's criticism was aimed at his own team and at himself. Such meetings happen throughout BP.
Division heads are encouraged by Lord Browne to be candid.” BP is trying to find a successor to Browne. Browne was due to retire in February 2008 when he turned 60. He agreed to leave in December 2008, after a showdown with BP's chairman, Peter Sutherland. Browne wanted BP to scrap mandatory retirement at 60 for executive directors. Sutherland told him the board was unanimous that he should abide by the original decision to retire at 60. They compromised. Yesterday one investor stressed that shareholders want Browne's successor to be announced in "good time." Investors continue to be happy with BP's plan to find its next chief executive internally. If internal strife continues, perhaps they will change their view. 12/01/2007 Browne will step down at the end of July, this year, after 12 years at the helm. He will be succeeded by Hayward. Browne had agreed to go in 2008, but will now leave 18 months earlier. Sutherland described Browne as "the greatest British businessman of his generation. His vision, intellect, leadership and skill have been a wonder to behold. He will be a difficult act to follow." 14/01/2007 Given the timing of the announcement of Browne's departure, it is hard not to connect it with the Baker Report. BP insists otherwise but some shareholders think Browne is being lined up to take the rap. "The fact that we were moving into a succession period – combined with quite negative reports – has dictated the shortening of the time-table," says Robert Talbut of Royal London Asset Management.
"It is convenient to have [him] around for six months to take the blame." Any manager – and Browne is as good and decent as they come – would have a lump in the throat at the thought of responsibility for employees’ deaths. Nobody can be held directly responsible for every dangerous nut and bolt, yet senior management ‘set the tone’ for a company's safety culture. Sympathisers say that the problems at Texas City predate BP’s ownership. That misses the point: buying a company means acquiring responsibility, too. 14/02/2007 The Financial Times has heard that a secret ‘internal affairs’ inquiry recommends the sack for four men. BP admitted that the inquiry found "shortcomings" in the performance of some managers. 2/05/2007 Browne has quit suddenly after revelations about how he had met his boyfriend, Jeff Chevalier, a young Canadian he met through a gay escort agency. When the relationship ended, Chevalier sold his story to a Sunday newspaper. Browne sought an injunction to stop publication. He lied to BP lawyers when he told them he met Chevalier while jogging in Battersea Park. 4/05/2007 In Germany yesterday to meet BP staff, Hayward acknowledged that BP had perhaps relied too heavily on outside contractors, technicians, and engineers during its rapid growth, which may not have helped reliability and safety. He says that under him, BP will not grow so fast. Fadel Gheit, senior energy analyst at Oppenheimer in New York, has studied BP for years. "I credit [Browne] with all the M&A in the sector. He was the guy who dared.” In 1998, the $62bn purchase of Amoco was the world's biggest industrial merger. It catapulted BP into the league of super-majors like Exxon and Shell. Within months, Exxon bought Mobil. Browne quickly struck again, buying Arco, another US company, in 1999, for $27bn plus $4bn of debt. 4/05/2007 BCA is still attempting to force Browne to testify about how much he knew of safety concerns and cut-backs at Texas City. BCA said this week's disclosure that Browne lied in the High Court would be noted in the Texas Supreme Court, as evidence that his affidavit (that he had no personal, unique or superior knowledge of the explosion) should be discounted. BCA added that, having resigned as CEO, Browne would no longer be able to avoid the court by saying that giving evidence would be a distraction. In Texan law, that is a legitimate reason not to give evidence but his resignation means it no longer applies. "He is no longer in charge of affairs at BP, so he has time to discuss relevant matters in this case. He can no longer claim he is too busy." BCA was speaking as a freshly unearthed report recommended that four BP employees in the US be fired: Mike Hoffman, BP's North American refining and marketing group vice-president; Pat Gower, the regional vice-president for US refining; Texas City plant manager, Don Parus; and Texas City West supervisor, Willie Willis. Wilhelm Bonse-Geuking, BP's European refining group vice-president, conducted the ‘internal affairs’ probe. "Neither poorly maintained assets nor muddled and confused lines of authority [directly caused the explosion]," The root problem was a culture that "seemed to ignore risk, tolerated non-compliance and accepted incompetence." The Bonse-Geuking report, completed in February but released yesterday under court order, said Manzoni failed to act on "serious warning signals.'' It said the BP board should consider whether Manzoni should be fired. Manzoni admitted to the internal inquiry that he was ill-prepared when visiting the refinery.
After releasing Bonse-Geuking’s report, BP spokesman Neil Chapman said that while the forthcoming CSB report would also find "shortcomings" in some managers, Bonse-Geuking “found no evidence that anyone acted in bad faith or violated BP's Code of Conduct." There is a growing expectation at BP that Manzoni will leave soon. However, one source said: "Hayward and the board will give him time to find a new job, rather than dismiss him." 30/05/ 2007 BP’s head of refining is to leave the company and take charge of Talisman Energy. Manzoni will leave BP at the end of August. Iain Conn, currently head of safety and environment, will replace him. Manzoni will succeed Jim Buckee as president and chief executive of Talisman, which was originally BP Canada, the Canadian subsidiary of BP. BP sold its 57% stake in BP Canada to the public in 1992, and the firm's name changed to Talisman Energy. 31/05/2007 "It's about a year-and-a-half too late, but better late than never," BCA said. Manzoni’s exit is a relief for Hayward. Several senior executives in the US have already quit but there was no sign that Hayward was ready to force Manzoni out. Yesterday, both BP and Manzoni, who has worked at BP for 24 years, insisted his decision to step down was completely unconnected to Texas City. A spokesman for Manzoni said: "This was purely about him not being awarded the top job." 2/02/2008 BP’s new CEO has continued his series of top-tier management changes with the replacement of David Allen as managing director and chief of staff. Allen was a close associate of Browne. The role of chief of staff will no longer be a board position. Allen has been with BP for 30 years, and was tipped as a potential successor to Browne. Browne and Allen were directors of Jeff Chevalier’s now defunct mobile ring-tone company. In the past year, half the executive members of BP’s board have left or are about to leave.
Those include Anne Quinn, vice-president of Natural Gas and Power and group general auditor, Ian Rushby. 代寫留學生作業 Supplementary Materials: 2. Quotes from Lord Browne’s memoirs, Beyond Business, Orion Publishing, 2010, especially pages 203-6 and 219-222, with one book review, dated 09/02/2010 “The first sign came … in November 2002. I had been trained to ‘under-promise and over-deliver. But I knew that sometimes you need a very stretching target to drive a big change. I was over-ambitious in setting short-term production targets for the company. Even when we were failing to hit them, I did not move them down far enough or fast enough. I had to reduce the targets three times in two months and took some heavy criticism. … … Not reaching production targets was bad but not as important as the saddest and probably the worst day in my working life at BP, some three years later. … … 23 March 2005: “There has been an explosion at the Texas City refinery.’” My blood ran cold. The call came through when I was in California at an Intel board meeting. And, like any report on a disaster which is unfolding, the message was unclear. … My advisers told me not to go; I would only confuse things and by the time I arrived it would be dark. As … I learnt of the fatalities, I knew I had to fly to Texas immediately. … … Lawyers had told me not to say anything. But I made a decision to say that I deeply regretted the accident and that BP took responsibility for what happened at its sites. Those words were said from the bottom of my heart. They would be interpreted and reinterpreted in the following years. … … Initially, some BP people in London underestimated the tragedy. … …
For years we had been trying to improve safety in BP. Injuries, accidents and fatalities were all on a significant downward trend. Safety was a top priority and it was something which had our full attention. … … we agreed with the US Chemical Safety and Hazard Investigation Board that we should appoint an independent panel to look at safety across all five of our US refineries. I asked James Baker … to chair the panel. … Baker is independent and tough-minded and my brief to him was that the panel should produce a report that would contain not just lessons for BP but for the entire industry. … The Baker Panel’s conclusion was that the … explosion was a process safety accident which could have been prevented. … … BP had an aspiration of ‘no accidents, no harm to people.’ We had emphasized … ‘personal safety.’ That led to dramatic improvements. But we had not emphasized that processes and equipment had to be safe under all circumstances and operated in a safe way at all times – ‘process safety.’ I remembered the cause of the Piper Alpha tragedy … I also remembered the strenuous efforts we had made to learn from this … and the subsequent … accolades we had been given. … … It was not the first process safety incident at Texas City. There had been a serious incident in the previous year. Texas City … had been part of Amoco for more than 70 years. … Its workforce felt they were the heart and soul of the refinery. But I had a sense that they felt put upon; relations were not good between management and the rank and file. Changes of local leadership did little to improve the situation. I suspect some of these issues got in the way of fully integrating Texas City with the rest of BP. Integration might have changed nothing but it might have changed everything. The Baker Panel believed that there were issues with the quality of management, clarity in who was to do what and, importantly, with the relationship with the workforce. They said that we ‘had not established a positive, trusting and open environment with effective lines of communication between management and the workforce.’ The Panel’s view was that our decentralized management system and our entrepreneurial culture delegated substantial discretion to the US refinery management without clearly defining process safety expectations, responsibilities and accountabilities. We did not make the executive managers and the refining line managers fully accountable for process safety management. BP accepted the findings …
There were questions in some people’s minds as to whether the accident happened because of our size and reach. I do not believe so. Big companies can operate at a distance but they need to pay careful attention to the quality of the management and have a very clear understanding of people’s roles and responsibilities. We had proved we could do this in other countries … and, indeed, in other parts of the US. The media said the accident happened because BP was cutting costs. That was the easy-to-understand, single point explanation. It was not true and the Panel said that it had ‘found no evidence of deliberate cuts to safety funding.’ Industry observers agreed with the Panel’s view that the deficiencies in process safety culture and management were not limited to BP. However, the tragedy happened at BP. Anything good we had done before no longer mattered. My instruction immediately after the accident was to settle everything as quickly as possible, particularly to settle the claims of families whose loved ones were dead or injured. But once lawyers became involved everything slowed down. And … litigation further damaged the reputation of the company since it went on for such a long time. My deepest regret is that we might have avoided that accident.” 09/02/2010 In his last years at BP, things started to go wrong for Browne. “For some time, I looked at my career with distaste and dissatisfaction. When determination and enthusiasm turn into obsession, you lose balance. It is hard to find [a] balance between confidence, humility and arrogance. You need confidence to make decisions, to keep moving the business forward, yet arrogance may cause you to make a decision before considering the range of possibilities. I wish someone had challenged me and been brave enough to say: ‘We need to ask disagreeable questions.’” For 20 years, until she died in 2000, Browne lived with his mother, first taking her to California after his father died, little realising “how dramatically that decision would impact [on] my private life.” She didn’t know he was gay: “… she would not listen. I was ashamed and embarrassed, and could not bring myself to tell the truth. The law [on homosexuality] changed while I was at university, but earlier intolerance cast a long shadow. … someone much younger, … can’t understand the fear." "I wish I could have been more truthful with my mother." After she died, “I was not just lonely, I was alone. I became increasingly aware of the emptiness of my life." Extracts from Beyond Business, pages 219-222 In 2002, “loneliness led me to search for a boyfriend. I became involved with a young Canadian. … Only very close friends knew … and I did not want them to know we had met through an escort agency. He and I agreed that if anyone ever asked how we met, we would say ‘While running in Battersea Park.’ … Things did not work out. After we parted, I supported him financially…. But after a while, I stopped … I still would not pay for his silence, even knowing all I know now. … When I did not respond [to his e-mail], my former boyfriend sold his story to the press. … 5 January, 2007: …
Roddy Kennedy, BP’s chief press officer, phoned to break the news. … I decided … I would find and brief top lawyers and take out an injunction. That was my first mistake. I was talking to a lawyer … When asked how I met my former boyfriend … I used the ‘Battersea Park’ story. I just could not bring myself to tell the truth. … I was in denial. I knew that the statement to my lawyer contained an inaccuracy. I should have corrected it as soon as I got back to the UK [from Barbados, via Trinidad, where I had to do some business] but I was focused on professional matters, particularly the freshly published findings of the Baker Panel. … I had to concentrate on how I would manage the impending press conference. … I spoke to the chairman [of BP] who … judged the combination of the Baker Panel report and my personal story as a ‘perfect storm.’ The board, however, agreed that I should stay on until the summer. Friday 19 January [2007]: I came to my senses. I knew I had to correct my witness statement. I did, but it was too late … I lost the case against the newspaper, which meant they could publish the story. What I did was wrong but at least I had not lied under oath. I had not committed perjury but I had made a false witness statement about how I met a man. … I might have been ‘most admired’ for years but all that was overshadowed because of a momentary slip. Friends and colleagues knew that this was not how I would normally have behaved, but to explain then why I had made that error seemed futile. … I soon discovered who my friends really were … I had a lot of friends. Many said that if they had found themselves in similar circumstances they would have done the same thing. This does not justify what I did; I know that too well. I also saw the very few who would cross to the other side of the street as they saw http://livesitehelp.com/casestudyzy/2012/0330/988.html me coming; I was no longer useful to them.” Supplementary Materials: 3. One employee’s story BP engineer Kristof Harris has had 14 operations and is on pain-killers and anti-depressants. He has a badly damaged foot and says he misses playing ball with his children. "I have a psychiatrist and I tell her I live about 10% of the life that I used to live before the explosion. I lost 90%." Harris says he is not sure he can go back to work at BP: "I had 12 people that died, and many more were mangled. My job was to keep them safe. I was betrayed ... and that's very hard to deal with."