Lessons learned from the British Petroleum disaster.

• Jurisdiction: Canada
• Author: Bone, Jeff
• Date: 01 July 2012

During the summer of 2010 the world was absorbed in live footage of the Macondo oil prospect bleeding 4.9 million barrels of oil into the surrounding ocean. Many months of helplessness followed the explosion of the Deepwater Horizon platform; an oil rig owned by Transocean but ultimately under the control of British Petroleum (BP). The explosion instantly killed eleven men and injured seventeen others. It was the largest marine oil spill in the history of the petroleum industry. The spill crippled commercial and residential interests alike along the Gulf coast and imprinted a permanent scar on the Gulf ecosystem.

After completing an internal investigation BP admitted partial liability. As of 2011, BP has paid nearly $5 billion to almost 200,000 claimants with litigation ongoing. The U.S. Attorney General continues to investigate which has resulted in at least one charge of obstruction of justice against a former BP engineer in April 2012.

More recently at one of Canada's largest engineering companies, the CEO of SNC-Lavalin resigned after an internal investigation revealed that irregular payments amounting to $56 million were approved by his company to an undisclosed foreign agent. The incident has resulted in a high-profile arrest of SNC-Lavalin's former vice-president. Further, Walmart has recently been implicated in allegedly giving bribes worth $24 million to Mexican officials.

In the same way that SNC-Lavalin and Walmart are under fire today for apparent lapses in corporate ethics and controls, I suggest that the genesis of the Deepwater Horizon disaster is connected to a long-standing cavalier approach inside BP towards safety, ethics and good governance. This article highlights the importance of incorporating ethical, social and environmental safeguards into corporate governance structures based on the lessons learned from BP.

What Went Wrong?

Prior to the Deepwater Horizon tragedy, BP's safety...