Case Bp Texas City

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Case BP TEXAS CITY

HRM

SUBMITTED TO: PROF. F.A FAREEDY

SUBMITTED BY

Muhammad Ali Asim

13P01453


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OVERVIEW

In March 2005, an explosion and fire at British Petroleums (BP) Texas City, Texas refiney killed 15 people and injured 500 people in the worst U.S industrial accident in more than 10years. The disaster trigged three investigations: one internal investigation by BP, one by the U.S

Chemical Safety Board and another independent investigation chaired by former U.S secretary ofstate James baker and an 11 member panel and organized at BPs request.

To put the results of these three investigations into context, its useful to understand that underits current management, BP has pursued, for the past 10 or so years, a strategy emphasizing costcutting and profitability. The basic conclusion of the investigation was that cost cutting helpedcompromise safety at the Texas city refinery.

The Chemical Safety Boards (CSB) investigation, according to Carol Merritt, the boardschairwomen, showed that BPs global management was aware of the problem with

maintenance, spending, and infrastructure well before March 2005. Apparently, faced withnumerous earlier accidents, BP did make some safety improvements but catastrophic safety riskswere still remained their due to unsafe and antiquated equipments. The explosion followed a

pattern of major accidents at the facility. In fact, there had apparently been an average of oneemployee death every 16 months at the plan for the last 30 years.

Statement of the Problem

According to CSB significant safety gaps were found, a lack of leadership competence,

systematic underlying issues such as widespread tolerance of noncompliance with bacis safetyrules and poor monitoring of safety management systems and process.

A working environment that had eroded to one characterizes by resistance to change, and lack oftrust. Safety, performance, and risk reduction priorities had not been set and consistentlyreinforced by management. Changes in the complex organization led to lack of clearaccountabilities and poor communication. A poor level of hazard awareness and understandingof safety resulted in workers accepting level risk that were considerably higher than atcomparable installations. A lack of understanding early warning systems, and no independentmeans of understanding the deteriorating standards at the plant.

BP did not always ensure that adequate resources were effectively allocated to support or sustaina high level of process safety performance, it tend to have short term focus and its decentralizedmanagement system and entrepreneurial culture delegated substantial discretion to refinery plant.The companies corporate safety management system did not sure there was timely compliancewith internal safety standards and programs as well as BPs executive management either did not


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receive refinery specific information that showed that process safety deficiencies existed at someof the plant and sometimes didnt ef fectively respond to any information it did receive.

.

RECOMMENDATIONSThe top management should take interest in personally to get what is happening in the industry.

Company should establish a process of safety management system . The companys corporate

management must provide leadership on process safety; it should establish a safety management

system that identifies reduces and manages the process safety risks of the refinery as well as I

should make sure its employees have an appropriate level of process safety knowledge and

expertise. As far as possible it should involve relevant stake holders who should develop and

maintain a positive safety culture at each refinery. BPs executive management and should have

specific information that showed that process deficiency existed at some of the plant and should

provide effective leadership on safety. Monitor process safety performance using appropriate indicators;

Invest sufficient resources to correct problems by maintaining an open & trusting safety culture. Ensure

equipment & procedures are maintained up to date, carefully manage organizational changes and budget decisions

to ensure safety is not compromised

Common Shortcomings

1. Lack of leadership2. Focus on short term profit3. Negligence4. Improper work culture5. Lack of communication6. Improper Planning7. Government leniency

Two major issues:

1. Cost cutting and a cheque bo ok mentality

2. Failure of all levels of BP management including the board


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Questions

Q1) The text book defines ethics as .. how would you defend your conclusion?

ANS) The breakdown in the companys ethical systems as it is in its safety system is one of the

core major reason of explosion in the industry. The global management was aware of the

problems with maintenance, spending and infrastructure well before the explosion. According to

Chemical safety board unsafe and antiquated equipment designs were left in place and

unacceptable deficiencies in prevention maintenance were tolerated.as well as the according to

the internal audit by CSB found that the potentially explosive situation inherent in the

depreciating machinery remained.

Q4) The text book list numerous suggestions for how to prevent accidents.three steps

employer can take to prevent accidents?

Ans)

1. Firstly BPs executi ve management and should have specific information that showed

that process deficiency existed at some of the plant and should provide effective

leadership on safety

2. Monitor process safety performance using appropriate indicators; Invest sufficient resources to

correct problems by maintaining an open & trusting safety culture

3. Ensure equipment & procedures are maintained up to date, carefully manage organizational changes and

budget decisions to ensure safety is not compromised

Q5) Based on what you learn from chapter 16 would you make any additional

recommendations.what would those recommendations be?

Ans) Safety is the integral part of the system, woven into each management competency and a

part of everyones day to day responsibi lities. The employer should institutionalize top

management commitment with a safety policy and publicize it. It should give safety matters high

priority in meetings, including board of director meetings with a brief safety message. Also

analyze the number of accidents and safety incidents and then set specific achievable safety goals

as well as reducing unsafe conditions i.e improperly guarded equipment, defective equipment


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and hazardous procedures in on or around machines or equipment. Moreover employees should

wear personal protective equipments and managers should conduct safety and health audit

inspection for possible problems.

Q6) Explain specifically how strategic HRM at BP seems to .. advisability of linkingHRM strategy to a companys aims?

Ans)

Case Bp Texas City

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