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BP: Putting Profits Before Safety?

BP: Putting Profits Before Safety?
Case Code: BECG071
Case Length: 21 Pages
Period: 2005-2007
Pub Date: 2007
Teaching Note: Available
Price: Rs.400
Organization: BP Plc.
Industry: Oil and Chemical
Countries: USA, Europe
Themes: Business Ethics, Employee Safety culture
BP: Putting Profits Before Safety?
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

This case is about the safety problems faced by BP, the third-largest oil and gas producer in the world. On March 23, 2005, an explosion at BP's Texas City refinery resulted in one of the most serious workplace accidents in the US. An investigation by The US Chemical Safety and Hazard Investigation Board (CSB) uncovered many safety lapses at the Texas City refinery. BP was accused of endangering its workers by compromising on process safety due to its high emphasis on cost cutting.

The Texas accident was not the only safety lapse at BP. In March 2006, a large oil spill was discovered due to a corroded pipeline at BP's Prudhoe Bay refinery in Alaska, USA.

Critics alleged that BP had put profits before safety. BP was also criticized for spending millions of dollars to project a 'green' and 'environment-friendly' image, while failing to take care of basic operational safety issues. BP surprised many when it announced that its CEO, Lord Robert Browne (Browne), would step down by end of July 2007, which was earlier than scheduled retirement in 2008. It also announced that Tony Hayward (Hayward), the head of BP's exploration and production, would succeed Browne.

This case discusses the findings of the report released by the BP US Refineries Independent Safety Review Panel (popularly known as the Baker report), the criticisms regarding BP's safety culture, and the steps taken by BP to rectify these issues.

Issues

The case is structured to achieve the following teaching objectives:

  • Understand the importance of safety culture and process safety management.
  • Understand the role of the top management in establishing and maintaining a safety culture within the organization.

Contents

Keywords

BP Plc., Safety Culture and Leadership , Process Safety Management, Baker Panel Report, Industrial Management, Green washing , Texas City Refinery, Prudhoe Bay Alaska, Corporate Culture, Succession Issues, Corporate Social Responsibility, Exxon Mobil Corporation, Lord Browne, Employee Safety, Exxon-Valdez

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