Argument

Back to Petroleum

Thanks to the unfolding catastrophe in the Gulf of Mexico, the public is finally seeing through BP's decade-long greenwashing campaign.

A decade ago, the company then known as British Petroleum launched a multimillion dollar advertising campaign to rebrand itself as the greenest of oil giants. Since then, it has gone only by the initials "BP" and has popularized a new slogan: "Beyond Petroleum." The campaign launched with a $200 million public relations and advertising budget and a new logo featuring the now-ubiquitous green-and-yellow sunburst. Ten years later, the company still spends big on advertising, dropping $76 million on radio and TV ads touting its image in the United States just last year.

The campaign has paid off for the company. A customer survey in 2007 found that BP had by far the most environmentally friendly image of any major oil company. That year, the "Beyond Petroleum" campaign also won the Gold Award from the American Marketing Association. The company reported that between 2000 and 2007, its brand awareness jumped from 4 percent to 67 percent and sales rose steadily.

But those hundreds of millions of dollars worth of green branding can't fortify the company against the environmental and public relations catastrophe unfolding in the Gulf of Mexico. At least 210,000 gallons of crude are hemorrhaging into the Gulf each day after the April 20 explosion and subsequent collapse of BP's Deepwater Horizon rig 50 miles off the Louisiana coast, a blast that killed 11 workers and injured 17 others. In a worst-case scenario for the spill, it could gush up to 6 million gallons per day. The spill is already well on its way to eclipsing the 1989 Exxon Valdez disaster, which dumped 10.8 million gallons into Alaska's Prince William Sound and stands as the worst environmental disaster in U.S. history.

The spill has wiped out years of ad spending for the company -- but it has also highlighted how disingenuous much of that advertising was. Despite all BP has spent on rebranding, the company hasn't done nearly as much to move "beyond petroleum" as its campaign implies. In fact, BP has been turning away from investments in nonfossil energy, last year cutting investment in alternative sources from $1.4 billion to $1 billion. Weeks before the spill, BP announced that it was shuttering its solar manufacturing plant in Maryland. The company brought in $73 billion in revenue in the first quarter of 2010, but only about $700 million of its business was alternative energy sources like wind and solar.

The company has also spent a lot of time and money convincing political leaders that offshore drilling is clean, safe, and environmentally friendly -- while at the same time actually fighting against safety measures that might have prevented the horror in the Gulf. Last September, David Rainey, a vice president at BP America in charge of Gulf of Mexico exploration, appeared before the Senate Energy and Natural Resources Committee to assure legislators that new technology enables "safe and reliable production" of offshore oil and gas and that "any release from our operations is unacceptable" and "rare."

But the Deepwater rig lacked a remote-control shut-off switch, a backup system that would close the underwater well even if the rig above were destroyed, as happened two weeks ago. Norway and Brazil require this added precaution for rigs off their coasts, but it is voluntary in the United States. In 2003, the Interior Department's Minerals Management Service considered mandating the devices, but decided against it under pressure from oil companies that complained that the $500,000 devices were too burdensome.

As recently as last fall, the company pushed back against new mandatory safety and environmental planning procedures. In a letter to Minerals Management Service, the division of the Department of Interior that overseas offshore development, dated Sept. 14, 2009, BP head of Gulf of Mexico production Richard Morrison criticized proposed rules that would require rig operators to develop and implement a Safety and Environmental Management System as "extensive, prescriptive regulations."

"We believe industry's current safety and environmental statistics demonstrate that the voluntary programs ... have been and continue to be very successful," he wrote. The proposed rules have not been implemented.

It's also clear that BP underestimated the possible risks of an accident on the rig. The plan filed with MMS in February 2009 for Deepwater Horizon stated that the company thought it "unlikely that an accidental surface or subsurface oil spill would occur from the proposed activities." And if something were to happen, BP wrote, because of the distance to shore and planned response, "no significant adverse impacts are expected." BP's worst-case scenario for an accident at the site was a leak of 162,000 barrels per day, which it said it could handle. MMS agreed, certifying at the time that it thought BP "has the capacity to respond, to the maximum extent practicable, to a worst-case discharge, or a substantial threat of such a discharge." But even MMS knew that there were substantial, well-known problems with the "blowout preventers" that were supposed to seal the well after the blast.

Now BP is scrambling to build domes to place over the gushing well, but that could take another six to eight days to deploy. The company didn't have the containment vessels on hand because it "seemed inconceivable" that the blowout preventer would fail, BP spokesman Steve Rinehart told the Associated Press. "I don't think anybody foresaw the circumstance that we're faced with now."

But in fact, there have been plenty of warning signs in recent years that the company has little regard for the safety of workers or the environment. A 2005 explosion at the company's Texas City refinery killed 15 workers and injured 170 others. The Occupational Safety and Health Administration (OSHA) fined the company $21 million for safety failures that led to the explosion, at the time a record for the agency. The Justice Department fined BP an additional $50 million. Despite assurances from BP that it would take comprehensive action to protect employees after the incident, the company continued to fail in that regard -- prompting OSHA to set another $87 million fine.

"Instead of living up to that commitment, BP has allowed hundreds of potential hazards to continue unabated," said Secretary of Labor Hilda Solis in announcing the new fine last December. The Department of Justice also fined BP $20 million for Clean Water Act violations stemming from a March 2006 incident in which 200,000 gallons of oil from a major oil pipeline spilled into Alaska's Prudhoe Bay. OSHA fined BP another $3 million just this March for safety violations at an Ohio refinery. The company has paid $485 million in fines in the United States alone in just the past five years.

This, of course, is small change for a company that posted $5.65 billion in profits in just the first quarter of this year. But it highlights both the company's lack of regard for worker and environmental safety, and the inadequacy of current enforcement mechanisms. Interior Secretary Ken Salazar has pledged to "keep the boot on the neck" of BP to fulfill its responsibility in cleaning up the spill. But that boot should have been there a long time ago. It shouldn't take a spill of this magnitude to remind us that we are still far from "beyond petroleum." No amount of rebranding can change that.

BEN STANSALL/AFP/Getty Image

Argument

Lawyers vs. Pirates

As if catching pirates weren't hard enough, now we have to figure out what to do with them. And no, they can’t all just walk the plank.

Somali pirates have not exactly had a banner month. Last week, 11 pirates charged with firing on two U.S. Navy warships were hauled into a U.S. federal court in Norfolk, Virginia, where they could be sentenced to life imprisonment. Other Navies have also captured their share of buccaneers, including the French, who nabbed six, and the Spanish, who took another eight. Dozens of ships from various countries are currently patrolling the Gulf of Aden and parts of the Indian Ocean, looking to round up marauders.

Unfortunately though, better (albeit still very imperfect) enforcement is leading to its own headaches. Yes, it looks great for the United States and other countries to be tossing more and more pirates into the brig. But the problem of what to do when the pirates land there is turning every pirate-hunter into a scholar of international law, and may make all the heightened security look a bit useless. 

At least in theory, there should be no legal ambiguity about putting pirates behind bars. Pirates, after all, have been regarded from time immemorial by the Law of Nations (jus gentium) as enemies of the entire human race, subject to the universal jurisdiction of any state that could get its hands on them. That spirit was codified in the U.N. Convention on the Law of the Sea, which has been ratified by 160 countries (albeit not by the United States).

And the U.N. Security Council has worked to shore up the international legal framework even further. Two years ago, a resolution authorized states cooperating with Somalia's largely moribund Transitional Federal Government to "enter the territorial waters of Somalia for the purpose of repressing acts of piracy and armed robbery at sea, in a manner consistent with such action permitted on the high seas with respect to piracy."

But the devil is in the details. Many countries either lack the right legal code to dub piracy a criminal offense or the procedural provisions to do so. Even in countries with the right laws are on the books, conducting successful prosecutions can be extremely difficult. There are few lawyers skilled in the minutiae of piracy law, gathering evidence at sea is logistically very hard, and transporting witnesses from the Gulf of Aden is no small task. The United States is about to learn this lesson now with the trial of Abduwali Abdukhadir Muse, the sole survivor of the four-man pirate gang who attacked the MV Maersk Alabama in April 2009 and held Captain Richard Phillips hostage for nearly four days. In fact, to avoid a complicated trial, prosecutors may allow him plead guilty to a lesser offense.

Up until now, Kenya and the Seychelles have taken the majority of the caught pirates, thanks to memoranda of understanding they signed with the anti-piracy fleet. But over the last year, they have simply reached their limit. Their judicial systems are overburdened as it is. It's not just a matter of funding, although that has been one hold up: The two countries simply don't have enough local prosecutors and defense counsels capable of handling these complicated cases. And in the case of Kenya, the country's own restive ethnic Somali and Muslim populations were growing antagonized by a seemingly endless parade of Muslim Somali prisoners captured by Western warships.

All the legal hoopla meant that very few pirates actually made it to court. According to one U.S. tally, some 706 individual pirates were encountered by naval vessels of the ad hoc counter-piracy coalition between August 2008 and December 2009. Eleven of these were killed resisting arrest and another 269 turned over for prosecution. Just 46 have been convicted so far and 23 acquitted. All together, that means that nearly 60 percent of the pirates encountered were simply released.

This week, the U.N. Security Council stepped in once again, unanimously adopting a Russian-sponsored resolution on the matter. The resolution requires the secretary-general to report back with options for prosecuting and imprisoning pirates, including the creation of special international piracy courts. If countries can't or won't try the pirates, then darn it, the U.N. will.

The United Nations proposal is well-meant, but it may never come to fruition -- or if it does, it may be too late for the current crop of pirate-hunters to take advantage. The secretary-general's recommendations are still three months away and their implementation is still further in the horizon. And if past internationalized criminal proceedings are any indication, the courts will take several years to actually set up -- and that's assuming that the political will and money can be found to do so. (The International Criminal Tribunal for the former Yugoslavia, for example, cost $376 million just for 2008 and 2009.)

Meanwhile, despite all the international community's efforts, the pirates are still plying their trade. Just last week, they pulled one of their most daring heists to date, sailing some 1,200 nautical miles from the Somali coast -- right past the naval task forces led by the United States, the European Union, and NATO, as well as the independently commanded Chinese, Russian, and Indian flotillas -- to seize three Thai fishing boats along with their 77 crew members. In terms of distance offshore and sheer number of hostages taken, the raid broke all previous records.

For the buccaneers, the equation still works out in their favor: exceptionally high rewards -- in January, a Greek-flagged tanker, the MV Maran Centaurus, was ransomed for a record $7 million -- traded for an extremely low probability of ever being prosecuted, much less convicted and sentenced. No wonder the pirates just keep on coming.

TONY KARUMBA/AFP/Getty Images