Working In These Times
Should BP CEO Tony Hayward Go to Prison?
In the wake of the Gulf of Mexico oil spill disaster, many have called for BP CEO Tony Hayward and other top executives of the London-based energy giant to go to prison. Most of this is just anger, but the idea deserves consideration. Indeed, in May the U.S. Department of Justice opened criminal and civil investigations into what caused the spill. “We will prosecute to the fullest extent of the law anyone who has violated the law,” Attorney General Eric Holder said June 1.
But the fact that 11 workers died in the April 20 Deepwater Horizon oil rig explosion doesn’t automatically mean than Hayward or other BP executives should go to jail. Sometimes workers are hurt even when management is careful—and even if they're not, negligence isn’t enough for a criminal conviction in U.S. courts.
I say this from personal experience. When I worked as a business executive, a worker lost three fingers on a power saw and almost bled to death, despite the fact we had hand guards on every machine and no one was allowed to use them unless they were properly trained. So how did it happen?
But Trevor came in on Saturday without telling his boss and tried to use the saw, on which he hadn’t been trained. He took the guard off, and his hand slipped. We deserved having to pay for Trevor’s medical expenses, lost income while he was out of work, and the decrease in his future earnings. We deserved every penny the Occupational Safety and Heath Administration (OSHA) fined us. In fact, OSHA should have increased the fine.
But I shouldn’t have gone to prison because I didn’t anticipate this series of events. Fortunately for me, U.S. law doesn’t provide prison terms for negligent managers and executives. It’s not enough that an accident could have been prevented, and management wasn’t as careful as a reasonable person would have been. For managers to go to jail, they must have been “recklessly indifferent” to danger. They must know that a situation exists that will probably cause harm, and do nothing.
What does all this mean for Tony Hayward? Whether BP’s CEO—now rumored to be resigning in October— belongs in jail depends upon whether the Deepwater Horizon’s problems were obviously going to hurt someone, and how much Hayward and other executives knew about it.
BP (including Hayward) obviously knew that drilling releases methane gas and that methane is explosive. The company knew it had to take steps to prevent a fatal explosion. The right thing to do would have been to have two seals in the well. That way, if one seal developed a leak, the methane would still be contained. This is what BP’s own safety engineers recommended. But managers ignored their own experts’ advice in order to save money.
The backup plan (if seals fail) is to push a huge set of iron slabs, called a blowout protector, through the pipe to seal it. BP had a blowout protector at Deepwater Horizon. A manager that cared about safety would have had it inspected regularly and stopped drilling if it wasn’t working properly. BP knew there were problems with blowout protector, but continued to drill, not just for a few days while they fixed the problem, but for 10 years, during which they paid little attention to it.
The final backup in this situation is a methane gas detector in the engine room. If all else fails, this will tell workers that they need to shut down the machinery before a spark causes an explosion. But the engine room on Deepwater Horizon didn’t have a methane detector.
Most of all, a company that cares about safety would reward workers who report dangerous situations so they can be fixed. BP reportedly did the opposite. In 2006, technician Stuart Sneed found a crack in BP’s Alaska pipeline near a location where welding was taking place, told the welders to stop, and told his boss about the situation. Sneed should have been rewarded. Instead, he was fired. BP’s own inspectors substantiated Sneed’s concerns about the cracked pipe. An arbitrator ruled that Sneed had been fired for reporting the crack. But he didn’t get his job back, and his legal dispute with the company is still pending.
It’s hard to escape the conclusion that BP knew it was endangering workers’ lives, and didn’t care. If what the media has reported about the Deepwater disaster is true, BP is guilty of manslaughter.
But I learned long ago that you never learn the entire story from news reports. That’s why we have trials. In order to prosecute Hayward, and not just his company, we need to establish what he knew about the Deepwater rig and when he knew it. We can’t assume that he knew everything that was happening on a rig 5,000 miles from his office in London.
But if the answers are what they appear to be, there is no doubt that the team of Justice Department attorneys President Obama dispatched to the Gulf on April 30 should bring criminal charges against the responsible BP executives.