The British media and commentariat is working itself into a frenzy over President Obama’s attack on BP. The Mayor of London, the patrician Boris Johnson, has said ‘I do think there’s something slightly worrying about the anti-British rhetoric that seems to be permeating from America when you consider the huge exposure of British pension funds to BP it starts to become a matter of national concern if a great British company is being continually beaten up on the airwaves.” Much of the press comment has been in the same vein – but it is nearly all uninformed, xenophobic and self-righteous.
BP has previous. Five years ago their Texas City Refinery exploded killing 15 workers and injuring 170. And over the years BP has had a highly questionable environmental record – as well as its lamentable health and safety performance. But nevertheless BP promotes its commitment to Corporate Social Responsibility (CSR) as follows: “Were proud to set universal standards of behaviour across our entire operation developing our own set of rigorous guidelines – [which are] often more rigorous than local laws and regulations”. Intellectually, of course the logic of this is inescapable. If your CSR commitment is absolute then even if you don’t legally need to apply your standards you will do so anyway – because that is what you believe in. Sadly, however, this is all too often a chimera. As “The Guardian’s” environment correspondent John Vidal put it recently in respect of BP’s Gulf of Mexico disaster, “If this accident had occurred in a developing country, say off the west coast of Africa or Indonesia, BP could probably have avoided all publicity and escaped starting a clean-up for many months.”
So the defence of BP from Boris Johnson and the rest is disingenuous and President Obama is quite right to criticise a company which has not just got very unlucky with one disaster but which has a history of dysfunctional behaviour. The Pension Fund argument is wrong and ill informed as well. Whilst it is true that collectively British Pension Funds’ investments in BP make up a big number individually no Fund can have any great risk nor be over-exposed. True there will have been a paper loss as a result of the stock price fall for all Funds holding BP – but for none of them will that be individually too material.
More light and less heat please – David Cameron’s’ much more measured recent statement is a good start!