BP's mea culpa a sorry tale of spin-doctoring and promises not to repeat mistakes

Sydney Morning Herald

Friday March 4, 2011

Leonie Wood

After a 'profoundly painful' year, BP says it finally gets why it is so reviled, writes Leonie Wood. There are times when words fail; when disasters are so profound that one's vocabulary runs dry.That's not the case at BP, though, the London-based global oil giant whose undersea rig blowout and subsequent oil spill in the Gulf of Mexico ranks as North America's worst environmental calamity triggered by man.In its 2010 annual report BP is not short of words. Far from it: the company's finest spinners have joined forces to produce a triumph of apologia and bravado, describing what the chairman, Carl-Henric Svanberg, avows was a "profoundly painful and testing year".With few prepared to forgive it for the Deepwater Horizon oil spill - a cataclysmic event that killed 11 workers and injured many more, then fouled vast expanses of the Gulf's fishing and fauna reserves and decimated Gulf economies - plucky BP has tried to explain to investors what it did wrong and how it intends to rebuild its reputation.It is a textual symphony of squirming, book-ended with accounts that underscore the impact on the company. As its chief executive, Bob Dudley, points out in a classy understatement: "Part of BP's task right now is to show we can be trusted to handle the industry's most demanding jobs, including exploration and production in deep water."Yup. That would be right, Bob.And there's this pearler, also by Dudley: "I have heard people ask 'Does BP 'get it'?' Residents of the Gulf, our employees and investors, governments, industry partners and people around the world all want to know whether we understand that a return to business-as-usual is not an option. We may not have communicated it enough ... but, yes, we get it."But what exactly does BP 'get'? Dudley (who points out that he was raised in Mississippi) says the message of the past year seems to be that BP, like other corporations, bears a responsibility to be "part of society, not apart from it".Well, that's a relief. BP gets it. Not before time, and not before the company has spent $40 billion trying to mop up the spill; committed $20 billion to a trust fund to cover liabilities, and endured blistering criticism from governments, environmental groups and the public. It still faces multiple investigations and a maze of litigation.Dudley says what happened was an "unprecedented oil spill with deep consequences for jobs, businesses, communities, the environment and our industry. From this grew a corporate crisis that threatened the very existence of the company'.'So how does BP even start to make good its reputation? The annual report offers some insights. It contains acknowledgments of "weakness" and "failures", yet peppered throughout are keywords such as "risks", "demands" and "challenges", "complexity", "crisis" and "trust", balanced by "determination" and "responsibility".BP's investigation of the spill found what Dudley called "a complex and interlinked series of mechanical, human judgment, engineering design, operational implementation and team interface failures". Yet he acknowledges BP has to do more than talk about gaining trust; he says it has to show clearly that it can manage the risks inherent in the oil industry and "demonstrate that we respect the environment and the needs of local communities and society as a whole".It is Dudley who makes the apology directed to the families of the 11 men killed when the Deepwater Horizon raged with fire. "We are deeply sorry for the grief felt by their families and friends," he says. "We know nothing can restore the loss of those men."The chairman, Svanberg, stops short of an apology, but says in his first few sentences: "The accident should never have happened. We are shocked and saddened that it did."Whether the public believes that BP really does "get it" is yet to be seen. Whether investors believe it is something that probably can be measured by the share price. From about 6.50 in April, before the spill, BP's shares tumbled to lows of 3 in June. The stock has since edged up to 4.80 as crude oil prices surge to their highest since 2008.The company, which suspended three of its quarterly dividend payments after the spill, has already sold $22 billion of assets to fund its liability commitments. It will resume dividends this month.In other words, BP is on the slow path back to investor acceptance, but the destruction wrought to its reputation is something that, despite the best efforts of executives and the company's spin doctors, will dog the company for decades to come.Workplace errors that cause human tragedy and oil spills that cause such environmental and economic devastation as the Deepwater Horizon ones did should not be forgotten. Words can soothe but they don't fix things. Actions do.