There has been deluge of news concerning the recent deep water drilling disaster in the Gulf of Mexico for which BP has been held responsible. A remarkable turnaround in the fortunes of the company, where its value in the eyes of market investors have more than halved since April this year. As one of four giants of heavy carbon producers of the Oil industry, it is now reputed to be a sitting duck as a takeover target.
The Gulf of Mexico disaster has virtually destroyed the local economies devastated by the oil spill where the President of the United States has been forced to make visits to the scene of the disaster personally number of times. The special relationship has been challenged between the USA and Britain. Prime Minister Cameron has been forced to telephone President Obama to ask him to go easy on the rhetoric bashing a British company and so much so as the senior managers have been summoned to the White House and the CEO of the company forced to answer questions before the Senate committee.
It has been turbulent few weeks and the relationship has been severely tested and the resolve of the new coalition British Government to take a stand to the continued public dressing down of the more international than a British company (40%) is owned by UK investors and 39% by USA investors, BP shares held mainly by pension funds. The BP CEO, Anthony Hayward, has had to eat his words on awarding a dividend whilst forced to pick up a huge bill for the cleanup of the spill and compensate the people affected by the disaster. The oil spill has yet to be tackled effectively as all measures to date have failed to stem the outflow. The disaster has had its toll on the whole industry and will force a much needed rethink of our dependency of this much in demand carbon rich oil sector. The whole episode is far from over as the politicians in USA take turns to raise the temperature on BP, to many which seems, as if they are diverting the attention of the domestic audience away from other domestic and international issues such as the war in Iraq and Afghanistan.
During the same period, it is ironic to note that a USA company based in India in 1984 was finally held accountable for the biggest industrial disaster some 25 years later. The Union Carbide plant in Bhopal manufactured pesticides and one night in early December 1984 whilst most of Bhopal slept, a silent and deadly toxic cloud spread across the neighbourhoods surrounding the Union Carbide plant claiming thousands of lives and left hundreds of thousands of people with repertory other related chronic diseases for life. Despite repeated requests from the Government of India for the extradition of the senior USA management to stand trial for their alleged mis-management of the safety procedures, the USA is yet to respond. Warren Anderson was the Chairman of the company at the time of the disaster and an international warrant for his arrest is yet to be fulfilled as USA refuses to extradite him to India, due to lack of evidence. Despite this impasse last month seven ex-employees, including the former chairman of Union Carbide India Limited, were convicted in Bhopal of causing death by negligence and sentenced to two years imprisonment and a fined around $2,000 each, the maximum punishment allowed by law. Many have drawn parallels with what has recently transpired after the aftermath of the oil disaster in the Gulf of Mexico and public flogging of BP by the American establishment. This is by the far the worst oil disaster since the Exxon oil spill in Alaska and some $20bn BP fund has been set up (dividends payout cancelled) and this is only the beginning. Contrast this to the paltry payout made to the Government of India by Union Carbide of $470m in a settlement in 1989. The worry for the world is that not only the multinationals should be held accountable for their ‘polluting’ role regardless of whether they are in the advanced or the developing world. There are countless USA companies and others like Shell who continue to pollute on a much bigger scale than the recent BP disaster, in parts of Africa such as the Niger Delta in Nigeria. Nothing seems to be off limits for our thirst for oil as parts of the Amazon forest and surrounding areas have been heavily polluted scarring the lives and livelihood of the indigenous people. Companies like Chevron have had law suits filed against them for their role in this.
What is clear is that despite the human and environmental tragedy of these high profile cases, once the media has moved on to the next story, the political follow through seldom follows its full course as it has been sadly witnessed in India with the aftermath of the Bhopal disaster. There may be an opportunity for the advanced world to take the lead in holding the polluter responsible for their actions – the BP disaster may just be a beginning. It may also be a start of the end of our dependency on the black gold. Time will tell if we are serious in investing in developing and grasping the alternatives and away from our reliance on heavy carbons.
For many it is clear that the world cannot afford another Bhopal or BP anywhere on the face of our precious planet.
Semra Eren-Nijhar 