Report: BP plants lack culture for safe work

Published: Wednesday, January 17, 2007 at 6:01 a.m.
Last Modified: Wednesday, January 17, 2007 at 12:00 a.m.

HOUSTON — An independent panel left little question Tuesday about BP's poor safety oversight, its deficient leadership and short-term focus at its U.S. refineries — critical indictments for a company still reeling from the 2005 Texas City refinery explosion that killed 15 people and injured more than 100 others.

What remained largely unanswered was how exactly the British company would fill a void in the safety culture at all five of its U.S. refineries, or how long it would take to fix.

"Culture is forever," said former U.S. Sen. Slade Gorton of Washington, one of 11 on a panel led by former Secretary of State James A. Baker III. "To change hearts and minds and … the attitudes individuals have toward their jobs is a difficult and a human task, and it's never complete."

The 300-plus page report said the company emphasized personal safety over what it called "process safety," or containing potential hazards such as explosions.

Baker noted the panel did not set out to investigate the causes of the March 23, 2005, explosion at its Texas City refinery, nor did it seek to lay blame.

Instead, it set out to provide BP with specific and extensive recommendations to improve the company's corporate safety oversight and culture. The panel made 10 recommendations, including that an independent monitor report to the company's board of directors for five years.

"If BP dedicates itself to implementing the panel's recommendations, we believe BP U.S. refineries can significantly improve their process safety performance," Baker said.

On a video link from London, BP PLC chief executive John Browne said the company will implement the panel's recommendations, which the company received Sunday and which Browne labeled a "hard-hitting and critical analysis that focused on deficiencies and negatives."

But he stopped short of giving a time frame. He noted that BP already had taken a number of steps since the explosion to improve safety, and it was important to compare the panel's suggestions with the company's own plans.

"The timing taken to get it right is appropriate," he said.

Browne defended the company's overall safety record but said its oversight of the kind of safety measures that prevent huge mishaps "wasn't excellent enough."

"BP gets it and I get it, too," he said.

Browne also denied charges the company has placed profits above safety and said the company had never forgone spending on safety resources when necessary. However, some BP workers told panel members that safety wasn't a spending priority and recommendations for repairs were often met with resistance.

BP said Tuesday it plans to increase spending on improvements at U.S. refineries from $1.2 billion in 2005 to an average of $1.7 billion a year from 2007 to 2010. BP's net profit for 2005 amounted to $22.34 billion, up 31 percent from the prior year.

Baker and Gorton both said the panel found no evidence that BP ever withheld resources for safety practices.

"Clearly, there were times when BP didn't recognize the urgent need for process safety improvements," Gorton said. "But we didn't find any deliberate and conscious efforts on their part to short-circuit safety."

Harlan Platt, a finance professor at Northeastern University in Boston, said the task ahead of BP is daunting but not impossible. He said the key was identifying ways the company — and its new monitor — can measure progress, or the lack of it, and find so-called "champions" who believe in the safety initiative and aren't afraid to speak up.

"You have to find champions within the organization who are focused on more than just the bottom line," Platt said.

The U.S. Chemical Safety and Hazard Investigation Board, known as the CSB, urged BP in August 2005 to hire outside experts to look at the company's oversight of safety management systems and make its findings public — similar to an investigation at NASA following the space shuttle Columbia tragedy.

The Baker-led panel, announced in October 2005, traveled to BP's five U.S. refineries, interviewed more than 700 employees and reviewed more than 340,000 pages of documents. The panel also surveyed about 7,500 employees and contract workers to assess their attitudes of BP's process safety culture.

Panel member Nancy Leveson, a professor of aeronautics and engineering systems at Massachusetts Institute of Technology, said the surveys revealed positives and negatives at all five plants, though two — Carson, Calif., and Cherry Point, Wash. — scored highest in safety culture.

In the middle of the pack were Texas City and Whiting, Ind., Leveson said. The refinery that revealed the largest number of flaws in process safety culture was its Toledo refinery, which is located in Oregon, Ohio.

Baker, a senior partner at the Houston-based Baker Botts law firm, was White House chief of staff and treasury secretary in the Reagan administration and secretary of state in the first Bush administration. The release of the BP report was twice delayed because of his work with the Iraq Study Group, which made its recommendations to President Bush last month on how to revamp U.S. policy in Iraq.

The release of the report comes less than a week after London-based BP said Browne would step down by the end of July, more than a year ahead of schedule.

Browne said Tuesday the report had "nothing to do" with his decision to retire earlier than expected, noting that he decided in December that when the company's board found a successor, he would step aside.

John Manzoni, the company's head of refining and marketing, said Tuesday he had no plans to resign.

The 2005 explosion has so far cost the company around $2 billion in compensation payouts, repairs and lost profits. BP has settled hundreds of lawsuits related to the accident, putting aside $1.6 billion just to resolve legal disputes.

Based on its investigation, the CSB has criticized BP for its safety systems at Texas City, about 40 miles southeast of Houston, finding the company fostered bad management at the plant and failed to fix problems.

In September 2005, the U.S. Occupational Safety and Health Administration found BP committed more than 300 willful violations of its rules and fined the company $21.3 million.

BP's own December 2005 report blamed failures by management at the refinery, saying it didn't make safety a priority, tolerated risks and failed to communicate. But BP added it "found no evidence of anyone consciously or intentionally taking actions or decisions that put others at risk."

The CSB has credited BP for cooperating with its investigation, making sweeping changes in how it recognizes potential hazards and hiring the Baker panel.

BP has said it will invest about $1 billion over five years to improve and maintain the Texas City site. BP also operates refineries in California, Indiana, Washington and Ohio.

BP shares fell 1.5 percent to close at 5.41 pounds ($10.62) on the London Stock Exchange.

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