LONDON, Jan. 17 –- BP's US refinery and corporate safety culture has been severely criticized in a report by an independent review panel investigating the explosion last March that killed 15 people and left 170 people injured at BP's Texas City refinery.
The 374-page report, led by James Baker, former US secretary of state, said BP management had failed to implement process safety as a core value across its five US refineries.
"BP has emphasized personal safety in recent years and has achieved significant improvement in personal safety performance, but BP did not emphasize process safety. BP mistakenly interpreted improving personal injury rates as an indication of acceptable process safety performance at its US refineries," the report concluded.
Employees working at BP refineries in Texas City; Toledo, Ohio; and Whiting, Ind. did not feel comfortable about communicating with management about safety issues, according to the panel, which said safety culture appears to be improving at Texas City and Whiting.
Neither did BP ensure that there were sufficient resources to underpin a strong process safety performance, the report added, stating, "BP does not have a designated, high-ranking leader for process safety dedicated to its refining business."
The panel was unable to conclude whether BP had problems with its safety culture because of cost-cutting. "BP tended to have a short-term focus, and its decentralized management system and
entrepreneurial culture have delegated substantial discretion to US refinery plant managers without clearly defining process safety expectations, responsibilities, or accountabilities," the panel wrote.
The report also criticized the company's delay in adopting engineering practices that could otherwise improve safety culture. BP's accident was the worst in US industrial history for the past 2 decades, but the US refining industry has lower accident rates than US manufacturing, the American Petroleum Institute said. In 2004, the rate of job-related injuries and illnesses for US petroleum refinery workers, as compiled by the US Occupational Safety and Health Administration, was 1.5 for every 100 full-time employees, compared with a rate of 6.6 for all US manufacturing employees.
John Browne, the chief executive of BP who last week announced a surprise early retirement from the role in July, denied cost-cutting was responsible for the failings. Browne has insisted that his departure is not related to the report.
A Citigroup research analyst note said Tony Hayward, Browne's successor, will need to focus on making changes in the company following the Baker report, rebuild BP's US reputation, safeguard TNK-BP's assets, deliver on growth, and restore market confidence in BP.
BP has committed to implementing the report's recommendations and has initiated some measures which include:
-- Creating a senior executive team to support and oversee process safety, integrity management, and operational integrity initiatives.
-- Forming a Safety and Operations division to establish group operations and process safety standards and auditing safety and operations performance.
-- Empowering the chairman and president of BP America to monitor BP's US operations and compliance with regulatory requirements and company standards and to rectify problems when they are identified.
-- Appointing retired federal Judge Stanley Sporkin to receive, investigate, and resolve concerns raised by BP staff and contract workers in the US.
-- Investing $1.7 billion/year during 2007-10 to improve the integrity and reliability of refining assets in the US. The company spent $1.2 billion in 2005.
Contact Uchenna Izundu at email@example.com.