BP might fix their well, but big industry is still broken

As I write this, BP have capped their gushing oil well in the Gulf of Mexico (although they still need to complete tests on the cap – read the news here). At last! But the crisis is, of course, nowhere near over. A longer term fix for the well is needed, and the cleanup of the Gulf will take years. So, as we enjoy this moment, it’s important to realise that we need to change the way our big industrial companies are run. We live in a fragile world at huge threat from the choices we have made and the industries we require to fuel our lifestyles.

This conversation is not made any easier by the fact that BP have bungled the handling of this issue from the start. From Tony Hayward’s ridiculous attempts to put solar panels on his house to their denial of access to dirty beaches making the “land of the free” more draconian than communist Russia used to be. President Obama has also mishandled this with his “kick ass” approach to “British Petroleum”. But at least they’ve been in the news, and had huge pressure placed on all parties to find a solution. And at least BP has admitted the mess and promised a pot of money to clean it up.


The problem is that similar environmental carnage happens all around the world every month – outside the glare of the media, and away from a rabid American public. Is it a case of different rules for rich people? For example, a report in the New York Times on “The Oil Spills We Don’t Hear About” chronicles the problem with ongoing oil spills in the Niger delta in Africa. Since oil exploration started in 1958, oil companies have spilled about 13 million barrels of oil in the Niger delta (about 50 times the size of the Exxon Valdez disaster, but smaller than the estimated 150 million barrels pumped into the Gulf of Mexico in the past weeks). This has meant 50 years of ongoing pollution and environmental damage.

More worrying, though, is the lack of concern oil companies seem to have for this area. The largest operator by far is Shell (Royal Dutch Shell). It operates in 100 countries around the world, but a Greenpeace report indicated that a “staggering” 40% of its oil spills happened in Nigeria. The number of those spills doubled from 2007 to 2008, then doubled again from 2008 to 2009. Why are so few people reporting on this?

While the world has been focused on the Gulf of Mexico and BP, other oil companies have slunk into the shadows, but only to carry on their nasty habits. In areas of the world where governments are not as loud as America’s, they continue to operate in dangerous and unethical ways. They’re not governed by “standards” and “ethics”, but just by profits and what they can get away with. And worse, our team at TomorrowToday predicted something like this could happen. In 2007, I wrote about the danger BP faced by cutting out costs and chasing profits above all other considerations.

Some may argue that BP is shouldering responsibility by making payouts to people affected in America. My understanding is that in order to get access to these payouts, though, you have to sign away your rights to further and future action against BP (in other words, it’s less of a payout and more of a payoff).

And, ironically, all of this is happening in the week that a final verdict was handed down in the Union Carbide court case in India. This relates to the massive chemical spill made by the US company in Bhopal, India, 26 years ago. The court handed down a mere 2 year jail sentence and a $ 2,000 fine to seven local managers at the Bhopal plant which released a chemical cloud in 1984 that killed tens of thousands of people in a slow agonising death. The human carnage was way worse than the current BP oil spill, yet no American senators have dealt with their own country’s company in any way approaching how they have mauled BP. Why not? And no American will be indicted – and all extradition attempts have been blocked – on the Union Carbide case.

After the Bhopal disaster, Union Carbide’s CEO, Warren Anderson, was arrested and charged in India. But the Reagan administration succeeded in cutting a settlement deal with Indian authorities which resulted in all court charges being dropped, a measly $470 million paid out in compensation for all the victims (and that divided between 574,367 victims). Anderson fled to the US. Neither Anderson nor any of the American executives of Union Carbide’s parent company have ever faced prosecution.

Journalist, P. Sainath has sagely noted:

Bhopal marked the horrific beginning of a new era. One that signalled the collapse of restraint on corporate power. The ongoing BP spill in the Mexican Gulf tops off a quarter of a century where corporations could (and have) done anything in the pursuit of profit, at any human cost. Barack Obama’s ‘hard words’ on BP are mostly pre-November poll-rants…. All that Union Carbide did and got away with in Bhopal is shocking. But not, alas, surprising. In the quarter of a century since then, corporate power has only grown. Bhopals happen when societies privilege corporations over communities, and private profit over public interest.

And he reminds us that the US Supreme Court seems to favour judgements in favour of big corporations – especially American ones. For example, in 2008, the Supreme Court ruled on the Exxon Valdez oil spill of 1989 — till then the biggest recorded (or admitted to) oil spill in history. A jury in 1994 had imposed penalties of $ 5 billion on the company. In 2006, an appeals court halved the punitive claim to $2.5 billion. And in June 2008, the Supreme Court reduced that amount by 80%, to roughly $500 million – an average of $15,000 per plaintiff. Exxon CEO Lee Raymond – who fiercely fought the damages – retired with a $400 million package.

While Bhopal is a huge reminder of a quarter century of industrial excess, I think you can track unfortunately this back even further. BP’s own history is a sordid story itself. It started back in Iran in 1908, when oil was discovered in Iran and a license was granted to William Knox D’Arcy by the Shah to mine the oil field. This became the Anglo-Iranian Oil Company in the 1930s. In the 1951, after a number of changes in government, the Iranian government nationalised the oil company. This led directly to President Eisenhower supporting the British government and authorising a CIA coup attempt in 1953. This led to a new Shah being installed, and changing the Constitution. The oil rights were given to a consortium of oil companies under the same name (AIOC), who agreed to share profits on a 50–50 basis with Iran, but not to open its books to Iranian auditors or to allow Iranians onto its board of directors. One commentator has called this the “biggest corporate bailout in history”. The AIOC became the British Petroleum Company in 1954. Yes, that’s how BP started. Sometimes things do carry on as they start!

So, when BP announced this week that it had spent $ 100 million buying a biofuels business, I don’t think they’re really going to change their spots. It has spent about $ 3 billion on alternative energy since 2005, that is true. But to what effect? Less than 1% of their output is alternative energy – “Beyond Petroleum”, I think not. There is a darkness at the heart of big industry. It is a darkness that can overtake us all.

Can we live without big industry? Probably not. At least, not as we live now. That much may be (sadly) true. But we should hold them to a high standard. And that standard should be universally held and applied everywhere. The future of our planet depends on it!

Let’s hope this BP oil spill helps us all to change our ways.

2 thoughts on “BP might fix their well, but big industry is still broken”

  1. pseudoTWIT says:

    If “corporate greed” had not cut corners and ignored workers’ concerns regarding safety, perhaps the rig would not have exploded, and it’s very easy to be wise in hindsight.

    However, the lesson to be learned by all gazillion-dollar corporations is to rid themselves of “corporate greed” for profit.

    I trust a global lesson has been learned.

  2. Just how dumb are BP? This past weekend, they released a photo of their oil spill command centre that had been photoshopped. Read the story at: http://tgr.ph/cAbAGN

    What are they thinking? Oh wait… that’s right…. they’re not!

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