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.