BP will be accused on Tuesday of failing to provide adequate resources to ensure safety at its US refineries, detailed a damaging report that calls on the board of directors to take the lead in ensuring standards are improved.
The report, by James Baker, the former US Secretary of State, will state: “BP has not always ensured that it identified and provided the resources required for strong process safety performance at its US refineries.’’
The finding is certain to be used against the company in the many outstanding civil cases against BP and could be seized upon by the grand jury investigating whether to bring criminal charges over the explosion at the Texas City refinery disaster that killed 15 and injured 500 in the worst US industrial accident in a decade.
The report, which runs to several hundred pages, identified safety culture problems across the North American refining organisation, according to someone who has read the document. And it put the onus on BP’s board of directors to lead an overhaul of the safety culture at BP’s US refineries and monitor progress over the next number of years, the person said.
It will make a dozen recommendations, all of which will be accepted by BP, although the company will dispute some of the findings.
Another source, who also has read the report, said it implicates BP’s current management in the problems with the company’s US safety culture.
BP was given the report last Wednesday, two days before the announcement that Lord Browne, its much-feted chief executive, was to stand down early.
The announcement that he would make way for Tony Hayward, head of exploration and production, at the end of July is thought in part to have been an attempt to limit the damage done by the report’s publication on Tuesday.
However, it has emerged that Lord Browne’s final payout is likely to be severely curtailed by the company’s poor recent performance.
He is likely to receive an extra year’s base salary – which was about £1.5m in 2005 -– but looks set to forego many of his remaining 5m long-term performance related shares for 2004-2008 on which the board has yet to decide, people close to the company said. In 2002-2005 he was only granted about a third of the possible 2.2m maximum
His remaining, unexercised 4.6m options have hardly fared better. Their average weighted strike price is £5.06, barely below BP’s Friday closing share price of £5.46.
His total package is unclear because some of the periods covered by long-term incentive payments expire after Lord Browne’s expected departure date.
However, he will leave with a pension pot estimated at £20m and existing shares as of the end of 2005 worth £12.2m.
The investigative report by Mr Baker was urged on BP by the US Chemical Safety Board, an independent federal agency responsible for investigating the causes of accidents due to hazardous materials in commerce and industry.
Mr Baker and his panel of industry specialists and former company executives spent more than a year reviewing BP’s US refineries, even delaying the release of the report several times because of the breadth of the information gathered.
