Home > Uncategorized > Risk management – should BP be banned from contracts with the federal government?

Risk management – should BP be banned from contracts with the federal government?

December 7, 2012

Recently, on November 28, 2012, the EPA announced (Click Here) that it has temporarily suspended BP from new contracts with the federal government “due to BP’s lack of business integrity as demonstrated by the company’s conduct with regard to the Deepwater Horizon blowout, explosion, oil spill and response, as reflected by the filing of a criminal information.”  The suspension does not affect existing agreements BP may have with the government.

Perhaps a contrarian question: but should BP be suspended from new contracts?  Obviously the spill was a human and environmental disaster.  And I have previously expressed surprise that in addition to BP, the oil companies in that geographic region apparently did not have available collective equipment that any of them could have used in the case of a spill or other emergency.

But what if BP now has fixed its risk management practices, and what if those practices are state of the art?  What if BP’s risk management practices are now better than other operators in that region?  And what risk management practices did the federal government as the entity that leases the oil rights require in that region before the spill, and how have those required practices and the government’s oversight now been improved, if at all?  These are some of the questions that I would like to see answered with a view toward current and future risk management.

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Categories: Uncategorized