HUMAN RERSOURCE MANAGEMENT

BP TEXAS CITY
CASE STUDY ANALYSIS AND ANSWERS TO
QUESTIONS

SUBMITTED TO:
Prof. F.A Fareedy
SUBMITTED BY:
Rana Noraiz Ali
MBA 2
13P00033
Section C

DATE: September 19, 2014

Introduction
In March 2005 an explosion and fire at British Petroleums Texas City, Texas, refinery killed 15 people
and injured 500 people. This disaster triggered three investigations: one internal investigation by BP, one
by the U.S chemical safety board, and another by independent investigation chaired by former U.S
.Secretary of the states James Baker and his 11-member panel.
BP nearly for the past 10 years are emphasizing on the strategy of cost cutting and profitability. The basic
conclusion of the investigations was that cost cutting strategy actually helped to compromise on safety
level.
The investigation done by U.S Chemical Board concludes as

The management was fully aware of the problems regarding to the maintenance and faced with
numerous earlier accidents.

BP make some safety improvements but the focus of these improvements are on the personal
employee safety and procedural compliance and the catastrophic safety risks remained

BP management has serious problems like leadership competence and systematic underlying
issues as a widespread tolerance of non compliance with basic safety rules and poor monitoring
systems.

BP had implemented a 25% cut on its fixed costs between 1998 and 2000 that adversely impacted
maintenance expenditures and refinery infrastructure.

The final report headlines two major issues

1. Cost cutting and a cheque book mentality.
2. Failure of all level of management including the board.
The internal investigation done by BP itself concludes as

Work environment inside the BP itself cause organization to have negative practices as lack of
trust and vigilance for change

Safety, performance, and risk reduction became less preferred and not consistently reinforced by
the management

Lack of early warning systems and no independent means of understanding the deteriorating
standards at plant

Poor level of hazard awareness and understanding of safety that was much higher at BP TEXAS
then at any other refinery of BP.

The report from James Baker panel concludes as

BP always lacked in process safety measures, employees are overloaded and have high rates of
overtime

BP tended to be short term focused and delegating authority without clearly defining process
safety expectations and responsibilities.

BP either did not receive any information regarding refinery process safety or they did not
effectively respond to that type of information.

At the end bakers gives recommendations about the problem.

MAJOR SHORTCOMINGS

LACK OF LEADERSHIP

FOCUS ON SHORT TERM PROFIT

NEGLIGENCE

IMPROPER WORK CULTURE

LACK OF COMMUNICATION

IMPROPER PLANNING

GOVT. NEGLIGENCY

LATENT ORGANIZATION WEAKNESS

RECOMMENDATION
The management of the BP is seriously considered for both the occupational as well as process
safety. They are just focusing on the occupational safety as we can read in both CSB and Bakers
reports. The company should follow the rules and regulation of OSHA.The approach of if no
accident has occurred till today, then it means no accident is going to happen, they should need to
be proactive rather then reactive. The comparative good condition at other refinery of BP show
that their safety culture or top managers are not doing good. They should maintain a culture of
openness, trust and safety.BP should ensure that equipment and procedures are maintained up to
date and carefully manage organizational changes and budget deciusions to ensure safety is not
compromised.OSHA should do his job to stop working of the refinery after the audit report and
continous events of death of employees,OSHA did not do his job properly which should be
checked.

Question and answers

1
I believe that breakdown in company ethical system is a issue but the lack of ethical and social
responsibility at the individual refinery level was also. As mentioned in the case that BP TEXAS
CITY refinery along with35 other units have significant safety gaps according to audit reports and
BP did not take any steps to prevent risk shows their un ethical behavior towards safety.
Checkbook mentality of the company and reduction of 25% of fixed cost to enhance profitability
overseeing the affect on safety also the idea of un-ethical practices. To increase the profitability
they just focus on occupational safety despite of the fact that external audit report referred its
infrastructure and asset as poor. If they did have ethical system w.r.t safety then why did not they
respond to external audit report, why they didnot compliance with OSHA rules and regulations,
why they did not have any safety, performance risk reduction priorities,why they did not have
unified common process safety culture at all their refineries ..all these are their attitudes and
incidents which clearly shows their un-ethical approach towards safety.
2
OSHA should respond to the external and internal safety reports of the BP texas city.If OSHA has
authority of filing a fine against the BP then it has also the authority to check the safety system at
both occupational and as well as process level.The OSHA has the authority and rules and
regulations but failed to prevent such type of incidents and incidents which occure in past shows
their criminal negligence. They should fined the BP for the practicing of poor safety procedures
and not maintaining the proper quality of mechanical assets,which will cause the firm to improve
their safety standards but they did not do so clearly show OSHA negligence.
3
BP is continuously spending and improving their occupational safety level whose results can be
seen as 70% reduction in injuries and in investigation of Bakers panel which shows that BP was
indulge in improving personal injury rates as a indication of acceptable safety level,thats why
OSHA accounted for the personal safety but didnt consider the internal and external audit report
about the condition of plant ,alarm systems and poor plant assets.
4

The companys corporate management must provide leadership on process safety which
will implement an effective system of audit on safety process and develop a integrated set
of leading and lagging indicators.

The company board should monitor on implementation and on ongoing process of safety
performance of the refineries.

The company should ensure its employees have an appropriate level of process safety
knowledge and expertise

5
The aspects of potential threats should be communicated to all the employees so they will become
well aware of their work environment and work as a more alert worker to notice minor things that
can cause major accidents and then communicate to their supervisors or managers. Culture of
lack of trust and resistance to change should be altered to culture which promotes trust, team play
and openness to adapt. Supervisors have a significant effect on employees safety so they should
be trained and communicate with top managers about safety concerns and on the other side
communicate with employees to avoid occupational illness.
6
When the BP implement the strategy of cost cutting and enhance profitability through reducing
their fixed costs HR department of the BP continue by reducing the cost of training of employees
regarding to the process safety, they overload their employees to reduce the number of employees
and instead of spending on the employee safety program they give a small part of their safety
program saving as a overtime of operators and maintenance personals.
As BP involves in practicing un-ethical behavior towards process safety their HR department is
also part of the firm so how it can be possible that top management involves in un-ethical
behavior and other departments and employees are not involved in doing such practices.
Also HR department is not involved in making its independent strategies, first of all aims are
decided and then all other departments make their strategies in order to reach at desired aim. If
the aim is to reduce cost and increase profitability by reducing fixed cost the HR deptt Will make
strategies to further support company aim.