Independent Report Criticizes BP's Safety

Oil Giant Failed To Emphasize Operational Safety, Panel Led By James Baker Says

(CBS/AP)  Baker, a senior partner at the Houston-based Baker Botts law firm, was White House chief of staff and treasury secretary in the Reagan administration and secretary of state in the first Bush administration.

The release of the BP report was twice delayed because of his work with the Iraq Study Group, which made its recommendations to President Bush last month on how to revamp U.S. policy in Iraq.

The release of the report comes less than a week after London-based BP said Chief Executive John Browne would step down by the end of July, more than a year ahead of schedule.

BP said Friday that Browne, 58, will be succeeded by Tony Hayward, the head of exploration and production, who will assume the task of trying to repair the company's reputation with the public and investors. Problems stem from a series of well-publicized mishaps that include the Texas explosion and last year's giant oil spill in Alaska.

The 2005 explosion has so far cost the company around $2 billion in compensation payouts, repairs and lost profits. BP has settled hundreds of lawsuits related to the accident, putting aside $1.6 billion just to resolve legal disputes.

Based on its investigation, the CSB has criticized BP for its safety systems at Texas City, about 40 miles southeast of Houston, finding the company fostered bad management at the plant and failed to fix problems.

In September 2005, the U.S. Occupational Safety and Health Administration found BP committed more than 300 willful violations of its rules and fined the company $21.3 million.

BP's own December 2005 report blamed failures by management at the refinery, saying it didn't make safety a priority, tolerated risks and failed to communicate. But BP added it "found no evidence of anyone consciously or intentionally taking actions or decisions that put others at risk."

The CSB has credited BP for cooperating with its investigation, making sweeping changes in how it recognizes potential hazards and hiring the Baker panel.

BP has said it will invest about $1 billion over five years to improve and maintain the Texas City site. BP also operates refineries in California, Indiana, Washington and Ohio.

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Lest we forget, BP also confessed to negligence in the recent spill of oil from its portion of the Alaska pipeline. BP admitted it had not observed proper maintenance of the pipeline, as required, by routinely running automated devices known as "pigs" through the pipes to check for deterioration.

BP, caught red-faced, could not claim oversight-- the company was intensely focused on working the pipeline to the limits of its ability to provide oil profits for the company. BP knew the risk to the pipeline, and took that risk, anyway.