Protecting Walruses

One of the true tests of leadership is the ability to recognise a problem before it becomes an emergency.

Honestly Lay Bare was going to move on from the Gulf of Mexico environmental disaster this week until we saw footage of the Congressional Inquiry.

The Inquiry was a United States House of Representatives hearing where the big oil companies were all required to attend.

In the Committee hearing there was discussion about the oil companies emergency response plans.

The following is a direct transcript:

The committee asked each of the five major oil companies for their oil spill response plans.

On paper they are very impressive, each document is more than 500 pages long.

But what they show is that ExxonMobil, Chevron, ConocoPhillips and Shell are no better prepared to deal with a major oil spill than BP.

The same company, The Response Group, wrote the five plans and describes them as cookie cutter plans.

What we found was that these five companies have response plans that are virtually identical.

The plans cite identical response capabilities and tout identical ineffective equipment. In some cases they use the exact same words.

We found all of these companies, not just BP, made the exact same assurances.

The covers of the five response plans are 4 different colors, but the content is 90 percent identical.

Like BP, three other companies include references to protecting walruses, which have not called the Gulf of Mexico home for 3 million years.

Two other plans are such dead ringers for BP's that they list a phone number for the same long dead expert.

Source: http://energycommerce.house.gov/documents/20100615/transcript.06.15.2010.ee.pdf

Such a commentary was of sufficient interest to Honestly Lay Bare that we shared it with a number of colleagues and friends (of which we have both!) and the responses were a fascinating cross section of what the rest of the world is thinking in response to what is easily the risk management case study of our times.

We have removed any identifying references from the responses but contained within is a great catalogue of what issues ALL companies should consider in the event of a doomsday scenario visiting their organisation.

Hard to believe such large organisations would take such a large risk on such an important issue!

Pretty tricky to have a proven emergency response when you're drilling in depths/conditions where no-one has ever had to manage this sort of incident before. You can't do practices for this sort of thing.

Unbelievable. Wonder what the consultants charged for producing the same plan for each client?

MBAs are going to be built on the back of this one ! It is interesting how these issues can be interpreted and it will be interesting to see where it all ends up. One might also argue that having consistent approaches across the industry might have some advantages - although the walruses are a bit of a worry and each has probably paid some consultant a ridiculously high fee to have them take the same product off the shelf and change the cover.

It does demonstrate key risks around using contractors who develop template solutions to meet timeframes and keep costs low. Also highlights the need to have executable plans able to be used by operators rather than a top shelf plan to meet compliance requirements.

There must be a concept that something trivial undermines the whole.... This is it

Given the size & nature of the risks involved this is pretty surprising. I have been heavily involved in liquidity crisis plans, so I forwarded your commentary to some of the guys here who are responsible for liquidity crisis planning.

Very interesting indeed, especially given the other super majors seem to be hanging BP out to dry.

They need to consider the "unthinkable" as a real possibility!

I believe BP Tony's plan should have been to move himself and assets to Brazil

That's what happens when a company hands over its basic responsibility to an external service provider .....

Hopefully, a diligent risk process applied to Business Resilience at BUs and Functions would uncover such a risk.

As a 'practicing' consultant there are deeper messages about tailored solutions!

Quite right - auditors will be looking at these response plans more closely considering the impact such disasters can have on financial position of companies - contingent asset???

But perhaps the final word is that from a New Orleans resident that has lived through Katrina:

Soooo sad, isn't it. Lives, economy, and ecology and environment forever changed.