Cost-Cutting Is Cited as 'Root Cause' of BP's Texas Disaster ; BUSINESS

Article excerpt

Budget cuts at BP's Texas City refinery were a root cause of the explosion there that killed 15 employees and injured 180 others, according to the US government's official report into the incident.

The ruling will open the floodgates of legal action against BP, which had fought hard to prevent such an unequivocally damning conclusion.

The US government's Chemical Safety Board (CSB) said that senior executives at the oil giant "did not provide adequate resources to prevent major accidents", leading directly to the explosion in March 2005.

Setting out "root causes" of the accident, the CSB said senior executives, including the outgoing chief executive, Lord Browne of Madingley, "inadequately addressed controlling major hazard risk" and "did not provide effective safety culture leadership". It added: "Budget cuts impaired process safety per-formance at the Texas City refinery."

There was also stinging criticism of managers at Texas City for failing to heed dozens of warning signs that might have prevented the accident.

A string of explosions ripped through the refinery after a fuel tower overflowed, and old or faulty safety equipment failed to detect anything wrong. The report adds that operator fatigue was an additional factor, since all four operators had been working for more than four weeks without a day off.

BP has already set aside $1.6bn to pay legal bills and compensation for the families of the dead, the injured and local residents who suffered property damage in the blast. While many complainants have settled, lawyers say more than 100 outstanding cases are making their way to court. The US Department of Justice is also investigating whether BP is criminally responsible for the accident. …