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Gulf Oil Spill 2010

Re: Gulf Oil Spill 2010

Man, I found myself defending BP tonight when a bunch of us started to debate the whole thing... I feel ill.

How dids that conversation go down? Did someone compare BP unfavorably with child cancer or something?
 
Re: Gulf Oil Spill 2010

They made some stupid comment about how companies like BP should have to test every critical piece of equipment daily. PSVs, rupture disks, pumps, tanks, whatever. The notion that a plant or oil rig should check hundreds if not thousands or tens of thousands of these pieces of equipment on a daily basis is ridiculous.

That and they said the CEO should be put in jail. I don't see how someone who isn't in charge of the daily operations of a rig can be held criminally liable for this. BP has engineering standards written up and they apparently may not have been followed. Is the CEO going to personally check that they are being followed for each site? Unless there is evidence that he specifically circumvented the standards or safety guidelines in a way that violated a law (or multiple laws for that matter), then yes, he should be sent to jail.
 
Re: Gulf Oil Spill 2010

They made some stupid comment about how companies like BP should have to test every critical piece of equipment daily. PSVs, rupture disks, pumps, tanks, whatever. The notion that a plant or oil rig should check hundreds if not thousands or tens of thousands of these pieces of equipment on a daily basis is ridiculous.

That and they said the CEO should be put in jail. I don't see how someone who isn't in charge of the daily operations of a rig can be held criminally liable for this. BP has engineering standards written up and they apparently may not have been followed. Is the CEO going to personally check that they are being followed for each site? Unless there is evidence that he specifically circumvented the standards or safety guidelines in a way that violated a law (or multiple laws for that matter), then yes, he should be sent to jail.

That's the problem when dealing with a corporation. How do you hold someone criminally responsible for anything? The CEO and his employees are required by law to maximize profits...even if that means they break the law. So a crime has obviously been committed but no one will be held responsible for it.
 
Re: Gulf Oil Spill 2010

That's the problem when dealing with a corporation. How do you hold someone criminally responsible for anything? The CEO and his employees are required by law to maximize profits...even if that means they break the law. So a crime has obviously been committed but no one will be held responsible for it.

Te way I see it, you find who was the person that didn't adhere to plant standards and if it lead to the explosion. If he was instructed by someone or it was approved by someone, and you keep working your way up the ladder until you find who was the person that approved it.

Second, the CEO and his employees are required by law to maximize profits while operating WITHIN the laws and regulations set out by the company, the authority having jurisdiction, and the relevant codes.
 
Re: Gulf Oil Spill 2010

That's the problem when dealing with a corporation. How do you hold someone criminally responsible for anything? The CEO and his employees are required by law to maximize profits...even if that means they break the law. So a crime has obviously been committed but no one will be held responsible for it.

Not necessarily. In some industries, a criminal conviction can cause a business to cease business, e.g., Arthur Andersen. Financial services firms can suffer the same fate in many cases. Moroever, find one me corporation where employees are encouraged to break the law and I'll show you a corporation that isn't long for this world. Besides, even if a corporation or individual breaks the law, it does not necessarily rise to the level of a criminal offense resulting in jail time, fines, etc. That's the problem DOJ will face, unless the can show records falsification, fraud, etc. And contrary to some of what some of the dullards in Congress and the media think, there's still a rule against ex post facto criminal violations.
 
Re: Gulf Oil Spill 2010

Moroever, find one me corporation where employees are encouraged to break the law and I'll show you a corporation that isn't long for this world.

The corporations who did "business" with Hitler's Germany - even after the United States declared war. IBM had to program the primitive computers that were used in the death camps. Aside from the human rights violations, that was high treason against America. IBM, Coke (hello Fanta!) and other businesses sure weren't hurt by their crimes.

Are you going to tell me that the employees of quite a few of the mining companies aren't encouraged to look the other way when it comes to violations?

You aren't going to nail the CEO or anyone else at BP because they'll tell you it was Halliburton's fault. They'll tell you it was someone else's fault...by the time they get done, it'll be your fault. If you didn't demand fuel they wouldn't have been drilling in the first place and a spill would never have happened.

"I was only following orders" wasn't a valid excuse before, and it shouldn't be now.
 
Re: Gulf Oil Spill 2010

The corporations who did "business" with Hitler's Germany - even after the United States declared war. IBM had to program the primitive computers that were used in the death camps. Aside from the human rights violations, that was high treason against America. IBM, Coke (hello Fanta!) and other businesses sure weren't hurt by their crimes.

Are you going to tell me that the employees of quite a few of the mining companies aren't encouraged to look the other way when it comes to violations?

You aren't going to nail the CEO or anyone else at BP because they'll tell you it was Halliburton's fault. They'll tell you it was someone else's fault...by the time they get done, it'll be your fault. If you didn't demand fuel they wouldn't have been drilling in the first place and a spill would never have happened.

"I was only following orders" wasn't a valid excuse before, and it shouldn't be now.

Um, crimes? Why wasn't IBM and/or certain of it executives prosecuted for "treason"? Well, maybe the FCPA wasn't in effect in 1942 ...

I can't speak to mining companies, but around here if employees are caught breaking the law and/or internal policies, they can be fired. And if it's a criminal violation, they can be turned over for prosecution. We have alot of regulators looking over our shoulders, and nobody wants to be the guy who let us become a negative headline on the Wall Street Journal or NY Times.

The fact remains that even if BP, or anyone else, violated drilling or environmental laws, even intentionally, they may not rise to the level of a Title 18 violation. And all of the hysterics in the world won't change that.
 
Re: Gulf Oil Spill 2010

In honor of BP:

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Re: Gulf Oil Spill 2010

Um, crimes? Why wasn't IBM and/or certain of it executives prosecuted for "treason"? Well, maybe the FCPA wasn't in effect in 1942 ...

I can't speak to mining companies, but around here if employees are caught breaking the law and/or internal policies, they can be fired. And if it's a criminal violation, they can be turned over for prosecution. We have alot of regulators looking over our shoulders, and nobody wants to be the guy who let us become a negative headline on the Wall Street Journal or NY Times.

The fact remains that even if BP, or anyone else, violated drilling or environmental laws, even intentionally, they may not rise to the level of a Title 18 violation. And all of the hysterics in the world won't change that.

Considering that we have de-criminalized pretty much all activity, I'm not surprised. But seriously, if I'm a middle manager and I find a problem with product X am I going to tell my boss or turn my back and wait for someone else to notice (or maybe no one notices at all). Now, if I point out the problem, it may cost Y to fix it (not to mention a media relations hit) and that means when it comes time for my performance review, the company just might find a reason not to give me a raise. When layoffs happen, my name might just go to the top of the list. Oh sure, I could try to claim it was retaliation for being a whistle-blower, but that's incredibly difficult to prove - and it takes years.

The math is very simple. If the cost of fixing a problem is X and the cost of not fixing it and the public discovering the problem is Y, then I have to try to determine the values of X and Y. If Y > X then I fix the problem. If X > Y I don't fix the problem. If people get hurt or die, that's too bad, but the "value" of that life is factored into Y. But my activity has been de-criminalized, so I may have to pay a fine (or rather, the company does) but I'll never see the inside of a jail cell. Now, had I taken a gun and shot the people I hurt with my actions, I'd be locked up. If they are killed because my mine blew up or there was an explosion on my oil rig, too bad so sad but I get off Scot-free.

It's like when my mother had AOL and they had limited local numbers, so she would call and complain and they'd give her a free month. She wondered how long this would go on. Again, it's very simple math. When the cost of all the free months they were giving away exceeded the amount they would pay for additional lines, they would get additional lines.

No one is going to put in their business plan "We expect employees to break laws." But you're being incredibly naive if you think it's not implied.
 
Re: Gulf Oil Spill 2010

Considering that we have de-criminalized pretty much all activity, I'm not surprised. But seriously, if I'm a middle manager and I find a problem with product X am I going to tell my boss or turn my back and wait for someone else to notice (or maybe no one notices at all). Now, if I point out the problem, it may cost Y to fix it (not to mention a media relations hit) and that means when it comes time for my performance review, the company just might find a reason not to give me a raise. When layoffs happen, my name might just go to the top of the list. Oh sure, I could try to claim it was retaliation for being a whistle-blower, but that's incredibly difficult to prove - and it takes years.

The math is very simple. If the cost of fixing a problem is X and the cost of not fixing it and the public discovering the problem is Y, then I have to try to determine the values of X and Y. If Y > X then I fix the problem. If X > Y I don't fix the problem. If people get hurt or die, that's too bad, but the "value" of that life is factored into Y. But my activity has been de-criminalized, so I may have to pay a fine (or rather, the company does) but I'll never see the inside of a jail cell. Now, had I taken a gun and shot the people I hurt with my actions, I'd be locked up. If they are killed because my mine blew up or there was an explosion on my oil rig, too bad so sad but I get off Scot-free.

It's like when my mother had AOL and they had limited local numbers, so she would call and complain and they'd give her a free month. She wondered how long this would go on. Again, it's very simple math. When the cost of all the free months they were giving away exceeded the amount they would pay for additional lines, they would get additional lines.

No one is going to put in their business plan "We expect employees to break laws." But you're being incredibly naive if you think it's not implied.

This is Jack's cynicism :D
 
Re: Gulf Oil Spill 2010

No one is going to put in their business plan "We expect employees to break laws." But you're being incredibly naive if you think it's not implied.

A company will encourage its employees to whistle-blow against personnel issues (harassment, pilferage) -- that saves the company money and protects against lawsuits. If anybody thinks a company appreciates whistle-blowing against company assets (products, policies), they have never stared into the black, empty shark eyes of an HR officer.
 
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Re: Gulf Oil Spill 2010

No one is going to put in their business plan "We expect employees to break laws." But you're being incredibly naive if you think it's not implied.

Uh, yeah. Unlike you, I actually deal with corporate governance and compliance matters on a near-daily basis, and have no problem terminating people who do break the rules. Regulatory action, shareholder suits, enforcement orders, criminal indictments, etc. are a risk we prefer to avoid, even if we lose a few bucks along the way.
 
Re: Gulf Oil Spill 2010

Uh, yeah. Unlike you, I actually deal with corporate governance and compliance matters on a near-daily basis, and have no problem terminating people who do break the rules. Regulatory action, shareholder suits, enforcement orders, criminal indictments, etc. are a risk we prefer to avoid, even if we lose a few bucks along the way.

I agree. What priceless is saying is patently ridiculous.
 
Re: Gulf Oil Spill 2010

They made some stupid comment about how companies like BP should have to test every critical piece of equipment daily. PSVs, rupture disks, pumps, tanks, whatever. The notion that a plant or oil rig should check hundreds if not thousands or tens of thousands of these pieces of equipment on a daily basis is ridiculous.
Not really. Every commercial airplane does exactly that for thousands of pieces of equipment on airplanes on a continuous (not daily) basis. We use fault trees, functional hazard analysis, failure modes and effects criticality analysis, etc to root out areas where danger could be lurking in the system designs and then address those with built-in-test monitoring by the system control computers, redundancy, procedural checks on an appropriate periodic basis, etc. This information is prioritized and provided real-time to the pilots via an EICAS (Engine Indication and Crew Alerting System) display.

Sure, performing all that work is expensive (someone has to pay my salary!), but is nowhere near the cost of the consequences of not doing it. Given the level of demand for oil, the public would definitely pay the additional pennies per gallon that it would take to double or triple (whatever that means) the safety precautions and equipment monitoring provisions on every platform.

Of course, no matter how many precautions you take, you can still have a bad day. Black swans can (by definition) never be eliminated.
 
Re: Gulf Oil Spill 2010

Uh, yeah. Unlike you, I actually deal with corporate governance and compliance matters on a near-daily basis, and have no problem terminating people who do break the rules. Regulatory action, shareholder suits, enforcement orders, criminal indictments, etc. are a risk we prefer to avoid, even if we lose a few bucks along the way.

I'm glad you work for a company that seeks to avoid fines and lawsuits. For many, that's just a cost of doing business. For example, in 2006 the Crandall Canyon mine was cited for 64 safety violations. For that, they paid the whopping fine of $12,000. In 2007, the mine collapsed killing six workers. Three rescuers were killed by a subsequent collapse. Minutes of a meeting from March 2007 show the CEO knew about the problems, but he took no action. The cost for killing nine people? $1.85 million for the company, not a dime for the CEO; certainly no jail time for the deaths of nine people.
 
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