Case BP TEXAS CITY

HRM








SUBMITTED TO: PROF. F.A FAREEDY








SUBMITTED BY
Muhammad Ali Asim
13P01453
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 10
years. 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 of
state 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 under
its current management, BP has pursued, for the past 10 or so years, a strategy emphasizing cost
cutting and profitability. The basic conclusion of the investigation was that cost cutting helped
compromise safety at the Texas city refinery.
The Chemical Safety Boards (CSB) investigation, according to Carol Merritt, the boards
chairwomen, showed that BPs global management was aware of the problem with
maintenance, spending, and infrastructure well before March 2005. Apparently, faced with
numerous earlier accidents, BP did make some safety improvements but catastrophic safety risks
were 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 one
employee 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 safety
rules and poor monitoring of safety management systems and process.
A working environment that had eroded to one characterizes by resistance to change, and lack of
trust. Safety, performance, and risk reduction priorities had not been set and consistently
reinforced by management. Changes in the complex organization led to lack of clear
accountabilities and poor communication. A poor level of hazard awareness and understanding
of safety resulted in workers accepting level risk that were considerably higher than at
comparable installations. A lack of understanding early warning systems, and no independent
means of understanding the deteriorating standards at the plant.
BP did not always ensure that adequate resources were effectively allocated to support or sustain
a high level of process safety performance, it tend to have short term focus and its decentralized
management system and entrepreneurial culture delegated substantial discretion to refinery plant.
The companies corporate safety management system did not sure there was timely compliance
with internal safety standards and programs as well as BPs executive management either did not
receive refinery specific information that showed that process safety deficiencies existed at some
of the plant and sometimes didnt effectively respond to any information it did receive.
.
RECOMMENDATIONS
The 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 leadership
2. Focus on short term profit
3. Negligence
4. Improper work culture
5. Lack of communication
6. Improper Planning
7. Government leniency

Two major issues:
1. Cost cutting and a cheque book mentality
2. Failure of all levels of BP management including the board



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 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
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 responsibilities. 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
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 linking
HRM strategy to a companys aims?
Ans)