Posted by Sheila Shayon on November 16, 2012 02:12 PM
It's understandable that the record-breaking sum that BP will be paying out — $4.5 billion in fines and other payments — as a result of the Department of Justice settlement over the 2012 Deepwater Horizon accident, oil spill and response raised eyebrows. While two employees are being charged wth manslaughter, the company also pled guilty to 14 criminal charges in connection with the cataclysmic oil spill in the Gulf of Mexico two years ago, and admitted to criminal conduct and deliberately misreporting the impact of the spill.
It's a record-breaking sum, but as a reader noted on our story, it's "a drop in the barrel" for the oil and gas giant. Even the fact that the DOJ investigation is ongoing, and BP will be subject to additional including federal civil claims and claims for damages to natural resources and fines under the Clean Water Act, with potential fines of up to $21 billion, the brand is more than prepared to absorb the financial hit.
The bigger question is how much, if at all, things have changed in the corporate culture that led to the accident, and led to harsh criticism over its handling of the accident. As Tom Zara, Interbrand's global Corporate Citizenship practice leader, comments, the DOJ penalty is directed at the "ethical bone structure" that led to the disaster, and the loss of 11 lives. "Notoriety of criminality isn’t the death knell of a brand, but corruption of culture will kill the brand."
The Justice Department press release detailing BP's guilty plea doesn't mince words on that front:Continue reading...
Posted by Shirley Brady on November 15, 2012 10:07 AM
The Associated Press is reporting that "BP has agreed to pay the largest criminal penalty in U.S. history, totaling billions of dollars, for the April 2010 oil spill in the Gulf of Mexico" that killed 11 workers in 2010. Bloomberg also reports: "The company will plead guilty to obstruction of justice for lying to Congress. Two of the company’s employees face manslaughter charges over deaths in the explosion of the oil well, said the person, who requested anonymity to discuss the deal which has not been made public. The amount wasn’t disclosed." The BBC is putting the figure at between $3 billion and $5 billion, and hears that up to four BP staff may be arrested.
Update: The settlement for the DOJ's Deepwater Horizon oil spill fraud case levies $4.5 billion in penalties against the company, including $1.26 billion for 14 criminal charges, and eliminates any further criminal and Securities and Exchange Commission (but not civil) charges against the company. As part of the deal, BP "has agreed to plead guilty to 11 felony counts of Misconduct or Neglect of Ships Officers relating to the loss of 11 lives; one misdemeanor count under the Clean Water Act; one misdemeanor count under the Migratory Bird Treaty Act; and one felony count of obstruction of Congress." It's also agreeing to pay $525 million in civil penalties through 2015 to settle claims by the SEC over the company's reporting on the oil flow rate into the Gulf of Mexico in the days following the accident. The deal is still subject to US federal court approval.
The Justice Department press release confirms that BP's two highest-ranking supervisors are being charged with manslaughter while a former senior executive is being charged with obstruction of Congress:Continue reading...
Posted by Sheila Shayon on November 12, 2012 05:05 PM
You know things are bad when the BBC is covering itself under the banner, "Crisis at the BBC." The British Broadcasting Corp. has fallen from its venerable pedestal, with its latest embarrassment triggering the resignation of senior executives, who are taking the fall for the corporation's newsgathering operation failing to maintain the ethical and journalistic standards at the heart of its brand promise.
BBC director-general George Entwistle resigned on Saturday, after only 55 days in the role, holding himself responsible for "unacceptable journalistic standards" on the BBC's flagship current-affairs program, Newsnight, after it failed to verify an accusation it aired against Lord McAlpine, a former Conservative Party treasurer, of child sex abuse in Wales. The BBC's director of news, Helen Boaden, and her deputy, Stephen Mitchell, have also stepped down.
No wonder Chris Patten, chairman of the BBC Trust, is calling the network a "ghastly mess."Continue reading...
Posted by Mark J. Miller on May 28, 2012 10:02 AM
As tourists start returning to the Gulf of Mexico two years after the disaster that marred its name, BP would like to rebuild its image as an oil company that actually gives a hoot about the environment. Ever since the explosion on its Deepwater Horizon rig in 2010 that led to about 4.9 million barrels of oil spilling into the Gulf of Mexico, BP has been extra cognizant of its environmental image.
Perhaps that mindset helped the company decided on a $400 million settlement with environmental groups and federal authorities to help “significantly reduce noxious air pollution from its massive refinery in northwest Indiana,” according to the Chicago Tribune. As it is, the paper notes, the refinery is letting loose “lung-damaging soot and other air pollution throughout the Chicago area.”
The EPA had signed off on a refinery upgrade in the final month’s of President George W. Bush’s time in the White House, but another look was ordered up by President Obama when he took office. That new look eventually led to this legal squabble. Now the refinery will need to reduce its emissions extensively.
Environmental groups are hoping that the standards set against this refinery will set new precedents for other refineries around the country, the paper notes.
Posted by Dale Buss on May 17, 2012 05:53 PM
How far away is Mexico from the United States? It might as well be on the other side of the world as far as many Walmart shoppers in America are concerned. When they're hunting bargains in the store, the allegations of bribery against Walmart executives as they built their operation in Mexico are about as pertinent to U.S. shoppers as the won-loss record of the 1953 Brooklyn Dodgers.
Walmart executives have been saying as much since the New York Times broke the news on April 21 about the Mexican bribery scheme, as the company said the investigation wasn't expected to have a material impact on its business. But today, those executives acknowledged that the scope of the bribery scandal could widen — and that it had taken a hit on its reputation.Continue reading...