BP has now moved into the zone of no return with its latest reputational disaster, argues Mallen Baker
BP has now moved into the zone of no return with its latest reputational disaster, argues Mallen BakerIt wasn't so very long ago that BP was seen as the most environmentally progressive of the oil majors. For some, that was still the best of a bad bunch, but for others there was potential for real vision in "Beyond Petroleum" that would move the industry from oil to sustainable energy.
If BP had a major setback with the Texas explosion, it has now moved into the zone of no return with its latest oil spill. As day has followed day, and the oil spill has relentlessly continued, its reputation has fragmented and all but disappeared.
We used to marvel (many in a horrified way) at the size of the company's annual profit. That profit is likely to be wiped out by the costs, the fines, and the compensation from this episode.
But more than that, it is quite likely the company will be forced to leave the US altogether. It's name has become so firmly associated with the destruction of part of America's natural environment - it is hard to see how it would benefit by staying in the face of all the hurdles that will be placed before it.
And what of Tony Hayward, BP's relatively recently arrived CEO? He turned up in the wake of the Texas explosions that showed that systemic failings in health and safety had taken place during the reign of his much-lauded predecessor. He was the one who took one or two mini-steps away from the environmental leadership, and instead promised to focus in on the fundamentals.
It may be that he couldn't have done much differently to avoid this. But it won't matter. In a matter this large, a number of very important stakeholders - some of whom have a financial share in the company - one of whom inhabits the office of President of the world's superpower - will insist that heads must roll.
When Exxon became associated with environmental harm through the Exxon Valdez accident, the company made the situation worse than it needed to by its slow and incompetent handling of the immediate aftermath. In some ways, BP has not been so demonstrably guilty in the days that followed - but it is actually an extremely difficult accident to halt.
If it had been otherwise - and a week's worth of intense activity and clean-up could have put a stop to the damage - the company would have survived by the skin of its teeth. But not even the most sophisticated crisis management in the world was going to pull the company out of this one.
As it is, it has played out in the worst possible way. There is enough blame that sticks that the company can be held by reasonable people to have failed where it should have succeeded. The nature of the failing is probably unrelated to the vast nature of the consequences - but it is by the consequences that the company will be judged.
It shows that you don't have to operate with villainous intent to end up firmly and irrevocably on the list of Great Corporate Villains of Our Time.
Mallen Baker is a regular Ethical Corporation columnist. Read more of his blog posts at: http://www.mallenbaker.net/csr/post.php?id=340