Why BP is not very slick in an emergency

When companies adhere to the rituals of risk-aversion, they lose sight of how to deal with real emergencies. Now we can see the consequences.

Frank Furedi

21st June 2010

The most important lesson of the tragic Gulf of Mexico oil spill is that the tendency today to dramatise risk creates a climate in which risk management becomes a kind of performance.

At a time when taking risks is seen as culturally unacceptable, companies and individuals tend to make a big, performative display of their concern to manage risk. Yet when company executives become preoccupied with being seen to tackle risks – rather than with actually thinking in a rational way about risk – then they often end up confusing their adherence to the rituals of risk management with actually taking real-world, effective action. Far from making the world a safer place, the transformation of risk management into impression management diminishes institutions’ capacity to respond to disasters in a sensible and resilient fashion.

The US Congress House Energy and Environment Subcommittee’s hearing into the oil spill exposed some of the more sordid features of the performative nature of Western risk culture. The hearing grilled the chief executives of the five largest oil companies about their drilling safety and regulatory standards in the wake of the Gulf oil spill. There was, of course, the usual theatrical grandstanding by politicians determined to demonstrate to their constituents their holier-than-thou credentials by contrasting themselves to grubby oil men. But more revealingly, we also learned that the oil companies’ emergency-response strategies consist largely of what sociologists describe as ‘fantasy documents’.

In the early twenty-first century, there is a veritable industry devoted to writing and publishing mission statements, declarations of values, codes of practices, and, of course, risk-management and risk-impact statements. These documents are written to comply with regulations, to minimise the threat posed by potential litigants, and to protect the reputation of companies. They can be characterised as ‘fantasy documents’ because they provide no real guidance to individuals actually trying to tackle practical problems in the real world. Instead, they often seem to be written from the same template, using the same language as lots of other risk-impact statements with no variation on the basis of different companies’ needs or real-life risk assessment.

Many institutions and companies have mission statements and risk-impact statements that seem to have been ghost-written by the same person. Indeed, thanks to the House Energy and Environment Subcommittee hearing, we now know that the five oil companies drilling in the Gulf of Mexico had virtually identical emergency-response plans – and according to press reports these emergency-response plans were written by the same Texas subcontractor. That five multibillion-dollar businesses could not bring themselves to invest very much time or resources into drafting their own emergency-response strategies, instead all singing from the same, customised ‘fantasy document’, is striking. It really shows that they believed that no one – literally no one – would read or check these plans, and therefore all they had do was to be seen to go through the motion of performing risk assessment.

What is even more remarkable is the poor quality of these fantasy documents. Three of them cited the views of the same University of Miami marine science expert, Peter Lutz, who, it turns out, passed away in 2005. While the documents provided little guidance on how to respond to a genuine emergency, they did reveal the oil companies’ sensitivity to the world of public relations. That is why, for example, four of the oil companies’ emergency-response plans made a declaration of their commitment to protect walruses. Walruses are widely seen as big, majestic creatures of the sea and no big oil company is prepared to court the anger of the public by causing the death or injury of one of these animals through its oil-drilling operations. It seems hardly relevant to note that the walrus does not even inhabit the Gulf of Mexico. The same emergency-response plans also mentioned seals and sea lions – which also live in different parts of the world.

Critics of Big Oil have criticised the companies for making unnecessary references to walruses. But it would be wrong to interpret the inclusion of walruses in an emergency-response plan for the Gulf of Mexico as just a stupid mistake. Rather, the documents refer to these animals because their real objective is to cultivate a public-friendly and environment-friendly image for the oil companies concerned. This is probably the most disturbing revelation to come out of the Washington hearings: that oil companies now devote far greater time and energy to managing how they appear in the eyes of the public than they do developing an effective emergency-response plan. So we learned that ExxonMobil’s emergency-response plan has 40 pages on dealing with the media but only nine on dealing with an oil spill. The plan seems more preoccupied with the science of drafting press releases than with the science of taking practical steps in an emergency.

It is important to point out that this performance of ‘protecting walruses’ and appearing concerned is not confined to a handful of oil companies. There is now a widespread culture of deception – often self-deception – in the West’s confused relationship with risk, and it is widely codified and institutionalised throughout society. As I have argued before, risk is no longer regarded as an opportunity but as a hazard to be avoided. As a result, risk-taking is now culturally stigmatised. People who take risks are frequently denounced for being, by definition, irresponsible. Parents who let their children roam in the outdoors are told off for ‘taking a risk with your child’. Scientists and businesses engaged in experimentation or technological innovation are often treated as pariahs for ‘putting communities at risk’. In contrast, risk aversion, the act of avoiding risk, is increasingly held up as a positive value.

And once an institution or a business begins to organise itself around the principle of risk management, it will soon become influenced by what we might call the Walrus Factor. One reason why the Walrus Factor takes over – even when there are no walruses around – is because once risk management becomes dominant within an organisation, then virtually nothing can be left to chance. Every aspect of an organisation’s life and daily activities becomes rule-bound; spontaneous and informal interaction are diminished. In a world where jobs and tasks are carefully defined, and where human interaction is subject to strict codes of conduct, everyone is encouraged to perform this risk-aversion ritual – and in such circumstances, fantasy documents flourish. When the rule-book dominates, what people are seen to be doing becomes as important as what they really do.

Such rule-book focused management encourages the juridification of organisational life. Red tape and bureaucratisation thrive, and what really matters is not what someone achieves, but whether or not they adhered to the ‘right processes’. So when oil companies submit a fantasy emergency-response plan, they are ticking the right boxes, and that is really what counts in the contemporary climate of risk-performance. This focus on process is dangerous: it encourages a flight from judgment and a culture of defensiveness. Too often, people are discouraged from acting on the basis of their professional judgment in case they deviate from the predictable path set out by process. In such an environment, people adopt the kind of qualities normally associated with bureaucrats. They follow, or rather perform, the rules.

In a world where management feels that, above all, it is judged by appearances, then the risk it becomes most concerned with is reputational risk. That is why oil companies, like other major players, devote so much energy and resources to public-relations initiatives. When organisations are under pressure to make a performance of their serious attitude towards risk, then they have little incentive to acknowledge mistakes and tell the truth. On the contrary, they feel compelled to protect their image and their reputation. Now and again, public-relations advisers will instruct them to go through the ritual of issuing an apology, but only to project an image of Being Concerned. That’s how their world works. And since reputational risk can rise or fall regardless of what a company achieves or fails to achieve, managers have a strong incentive to keep up appearances regardless of what is really going on. Most of the time, this performance of risk does no real harm. But when a company like BP is faced with a crisis, the imperative of keeping up appearances exacts a heavy cost – the oil company bosses have spent more time proving that they are ardent followers of the ‘risk process’ than they have thinking about what to do in an actual emergency, and we can see the consequences of that now.

So yes, BP and any other company that causes serious damage to the environment and to people’s livelihoods should be held to account. But not all the fault rests with BP. In a world where performing risk-management is preferred to taking risks, organisations will often lack the moral resources and leadership qualities needed to respond effectively to an emergency.

Frank Furedi’s latest book, Wasted: Why Education Isn’t Educating, is published by Continuum Press. (Buy this book from Amazon(UK).) Visit Furedi’s website here.