BP: Still Beyond Belief
I meant to post last week, but got behind on things, but I put BP on our Walk of Shame for the week. This still feels very timely though, as the crisis continues to wear on. I am not an expert on the industry, but it has come across as blundering and occasionally even lackadaisical response to this disaster (which will have environmental as well as economic ramifications for a heck of a lot of people). I was also floored by some of CEO Tony Hayward's comments on the situation that have been reported by the media. I'm pretty sure most of us would like to think that there are contingency plans for such disasters, that folks actually know what to do when they occur, and BP has not given a very comforting impression over the last month that it has much of a clue how to proceed at all.
I then remembered some of the resolutions BP shareholders shot down at the annual meeting, just days before the Deepwater Horizon disaster, and I couldn't help but point out that I think some of those resolutions could constitute some degree of foreshadowing of possible losses down the road. Activist shareholders are often pointing out some kind of risk, and shareholders do not have to agree but hopefully they aren't simply dismissing them out of hand.
On a related note, I ran across what I thought was an interesting op-ed piece recently, discussing liability caps and spill subsidies, which of course brings some added complexities into the discussion of why things like this happen. (I don't regularly follow this industry, so I was previously unaware of anything like this.) I would like to avoid getting too political, but what I liked about this piece is it points out some good food for thought, perhaps: that giving special protections to an industry is NOT pro-market, as much as the rhetoric likes to suggest it is, maybe it's simply pro-Big-Oil (or some other industry). I think there's a big difference, although I feel like people get these elements confused or muddied a heck of a lot of the time. And of course, special protections certainly may reduce the incentive for an industry to be prepared for worst-case scenarios. Why prepare if the financial damage probably won't be that great? Something to think about maybe, and I think I'm sensing a bit of a "theme" these days. (Being accountable for all of the liabilities seems pretty fair to me, and seems like it would send a pretty important message about safety and the importance of having contingency plans, not to mention being responsible.)