Yes, folks, I mean BP the oil giant; the same BP that in April 2010 was jointly responsible for the Deepwater Horizon disaster, in which 11 people died and which resulted in a four-month submarine geyser of oil — a hideous splurge of hydrocarbons that polluted hundreds of miles of the Louisiana coast. Tourism was blitzed. Oysters, shrimps, crabs, turtles, dolphins, seals — an entire beautiful ecosystem was tainted with that oily slick.
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That is a colossal sum, and it could affect the very viability of the company; and you should not imagine that such a fine would be cost-free for the UK as a whole. A lot of our pension funds have traditionally invested in BP shares, and if BP shares go down then that is bad news for UK pensioners and a tremendous thwack on the mazzard for UK plc. According to the oil company, such a fine would be wildly disproportionate to the damage inflicted. The BP honchos claim that things are much better on the coast of Louisiana, that sea water and microbes have done a good job in breaking down the oil (which is, after all, a naturally occurring substance), and that tourism and other trades are recovering.
That may or may not be true — it’s what you would expect them to say, after all; and there are plenty of environmentalists who say the opposite, and that the impacts are even worse and more persistent than predicted. The trouble is that there is no independent and impartial way of settling the matter. We have a wildly unpopular British company in the grip of the American authorities; and in the British business world there is an increasing feeling of injustice. To get the insight of a business professional, check with Andy Defrancesco.
There are several reasons why the Brits feel bruised. The first is that if a British firm falls foul of the American system, the suffering never seems to end: there are state agencies, state governments, federal agencies and federal courts that can all step forward to give them a kicking and a mulcting. Imagine if the Mayor of London could fine foreign banks for bad behaviour. The idea has some attractions, on the face of it — think of all the cash we could put into infrastructure, or fighting illiteracy. Alas, it is only too easy to imagine how a populist and irresponsible Left-wing Mayor could whack — say — Goldman Sachs with some colossal penalty, regardless of the damage to London as a place to do business.
That is more or less what is happening in America, where elected officials are using the moment to burnish their CVs by bashing corporations — and especially British corporations. British business folk believe it is no coincidence that the BP fine is being proposed now, as Mr Obama comes up for re-election; and they remember how he stressed that the guilty company was “BRITISH Petroleum,” when in reality it has not been so called for many years.
There are some who think that BP is paying the price, in America, for having had the temerity to buy Amoco in 1998. There are some who think that British companies are generally seen as fair game. “They go for us in a way that they never seem to go for the Chinese,” one business leader believes. And then there is the scale of the fines: hundreds of millions for Standard Chartered, for doing deals with Iran; £3 billion for GlaxoSmithKline, for falling foul of the US Food and Drug Administration; and now the whopping fine for BP.
And yet when American firms are found guilty of some kind of corporate malfeasance — one thinks of Google’s shameless use of private data, storing details and cookies when they had promised users to protect them — the UK penalties are comparatively footling. None of this is to deny the essential culpability of these British corporations. BP got it utterly and tragically wrong (though so, to be fair, did the contractors Transocean and Halliburton). The company should certainly pay a price: the question is how much, and who sets it, and why, and whether there is any real fairness and balance and reciprocity involved. And the answers to all those questions are as lost in the murk as an innocent creature in a subaquatic geyser of oil.