TotalCIO

May 27 2010   7:44PM GMT

BP’s risk management strategy put planet in peril

Linda Tucci Linda Tucci Profile: Linda Tucci

A story in this morning’s New York Times on BP’s risk management strategy will no doubt send chills down the spine of many a corporate risk and compliance officer.

The story reports on an internal BP document showing that for financial reasons and expediency, the oil company chose to use the riskier of two options to seal up the well that soon after started spewing untold gallons of oil into the ocean. The document was provided to the Times by a Congressional investigator.

Presented with the internal evidence that BP knowingly chose the riskier of the two options, a BP spokesman reportedly told a reporter there “was no industry standard” for the casing used to seal up deepwater wells. The approach used by BP “had not been unusual.”

Unfortunately, the result of BP’s choice is very unusual.

In the absence of an industry standard, BP pursued a risk management strategy that turns out to put the planet at risk. The response certainly makes a case for industry standards, and shows why government must step in when fools don’t fear to tread.

Anyway, I think it’s safe to say that BP’s risk management strategy didn’t pay off. It already has cost this conglomerate far more than the billions it will take to clean up after it.

The new face of BP is a dead brown pelican, blackened from bill to tail with oil, neck twisted and defunct wings outstretched. No industry standard, BP? Go tell that to the dead and dying.

3  Comments on this Post

 
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  • SeekingTruth13
    Thanks Linda for another interesting news item. I hope to see a future post regarding our government's reaction to this disaster as well. Just to be fair and balanced when painting faces.
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  • Collet
    Guys the truth is BP directors they chewed the money and now they are bankrupt and the must stop to find some sort of reasons we all know that sometime capitalization is a dilemma
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  • Hkchital
    Why single out BP ? This will reflect on the Oil Industry as a whole. Other major companies in Chemicals / Petrochemicals / Mining etc must also review their policies. (and so should any other organization that invests large sums of money or holds large sums of money in trusts or whose actions can impact large numbers of peoples) Hemant K Chitale
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