The Demise of Teflon John

Article 21 Aug 2006 admin

As speculation intensifies about who will lead BP after boss John Browne’s retirement in two years time (see notes from Gog and Magog), with it comes the question of Browne’s legacy in the company – This article was first published in Platform’s Carbon Web Newsletter, Issue 5.

Browne’s leadership has been defined by his branding BP as a progressive oil company, concerned about climate change, investing in environmental and safety improvements and going ‘beyond petroleum’.

What is most surprising about this spin is how long it lasted. Sufficient repetition of these largely unfounded claims gave the company’s reputation a ‘Teflon coating’, to which no bad news would stick. Time and again, activists, trade unionists and communities would point to evidence of brutal or irresponsible practice, only to be disbelieved, because “BP’s not like that”.

Now, finally, the Teflon is peeling away, after a string of high-profile failures in the USA. Last year’s explosion at the company’s Texas City refinery, in which fifteen workers tragically lost their lives was followed by recent documentation of systemic safety flaws at BP’s Toledo refinery. An inspection by the Occupational Safety and Health Administration proposed a $2.4 million fine finding 39 violations, many of them echoing problems at Texas City.

BP is also facing a grand jury investigation over its March Alaska oil spill, the state’s sixth largest ever spill. The incident was caused by pipeline corrosion, combined with the failure of BP’s leak detection systems. As Carbon Web goes to press, BP has announced the closure of its Prudhoe Bay oilfield, the largest field in North America, because of further corrosion fears.

Now civil rights activist Jesse Jackson has launched a campaign accusing the company of ‘profiteering and racial discrimination.’ Since June, Jackson’s Rainbow Push Coalition has been picketing BP/ARCO stations across the US. “BP has the largest share of the African American market, yet its pattern of discrimination amounts to a virtual lock out of African American businesses and consumers. They want our business but don’t want to do business with us,” said one member of Jackson’s coalition.

Meanwhile, BP faces a lawsuit brought by the US Commodity Futures Trading Commission, accusing BP of “unlawfully attempting to manipulate and manipulating” the price of propane gas. Dennis Abbott, a former BP energy trader, pleaded guilty to federal charges of conspiracy to manipulate prices and could face up to five years in prison.

So where does all this leave Browne and BP? With the Teflon flaking away, the stories highlighting the gap between BP’s image and reality will continue to increase. For example, it is well-documented that BP has cut corners on safety on the newly-opened Baku-Tbilisi-Ceyhan pipeline, making leaks almost an inevitability, although the company will likely blame them on sabotage.

In the run-up to Browne’s departure, his personal reputation will decline with that of BP. Depending how far this goes, his successor may try to distance the company from the thirteen-year Browne era, whose real legacy may be seen as maximising financial returns whilst papering over increasingly profound environmental and social impacts.

Focus Areas