Michael Meacher MP

The Gulf of Mexico saga which may – or may not – be now coming to an end has more compelling implications than has been realised.   It’s not just that BP has suffered a catastrophic accident, has already paid out £2.5bn in clean-up costs, is facing even bigger compensation claims for years ahead, and has experienced the biggest reputational nosedive in modern history from third largest corporation in the US to public enemy no1.   It’s the way its record in so many other respects has been crawled over and found abysmally wanting.

It’s not even just that the Gulf of Mexico disaster comes on top of the worst US industrial disaster of the last decade, also laid at the door of BP, when its Texan oil refinery blew up in 2005 killing 15 workers.   It’s the fact that these were not just one-off episodes, but rather typical of a  safety and environment-lax, no-holds-barred, gung-ho profits culture which arrogantly accepted no checks on its industrial and financial dominance.   As the evidence now coming to light reveals, the abuse of power runs right through the whole BP record.   So how should we now respond? (more…)

The British seem to regard homicide when committed by a corporation as rather different from ordinary murder.   It’s true that companies don’t want or intend to kill people (unless of course they’re arms manufacturers), but how should we regard (a) bribing officials of a non-Western country to import a fuel additive known to cause brain damage to children? (b) secretly dumping in a Third World country waste oil residues with a toxicity to kill? and (c) paying out a $15m out of court settlement in a Third World country to avoid further action against its collaboration with that government in the execution of protestors challenging its oil depredations?   All 3 cases involved British companies. (more…)

Lord John Browne, Sun King of casino capitalism, Blair’s favourite businessman and a High Court liar, is the wrong man in the wrong place at the wrong time.   The qualities needed – if indeed such an appointment is required at all – are personal integrity, an unblemished record, and an understanding of the real nature of government and democracy.   Browne is a failure on all three counts, as his following record shows. (more…)

Given that the bankers’ malfeasance is the root cause of the present economic misery, which with going-for-broke spending cuts about to be inflicted will soon get much worse, it seems almost unbelievable that, 3 years on, next to nothing has been done to avert yet another (possibly greater) crash.   The financial meltdown began on 9 August 2007, slowly accelerated through 2008, exploded on 15 September 2008, and cost governments in 2009 about £3-4 trillions in bail-outs, including some £650bn in the UK.   Now bonuses (which drove the original recklessness) are back in full swing with £6bn paid out last year in the UK, derivatives trading (the dark heart of the City of London) is bounding ahead, and speculative lending still overwhelmingly takes precedence over lending to business and manufacturing.   How have the vested interests got away with it?   What should be done? (more…)

As I said on Newsnight yesterday, Obama is attacking BP, not Britain.   He’s reacting exactly as we would if an American oil rig had blown up in the North Sea and a huge oil slick expanding by 40,000 barrels a day (8 times worse than the Exxon Valdez disaster in 1989) was devastating the whole coastline of south-east England.   The Daily Mail telling Cameron to ‘stand up for Britain’ jars as usual with its shrill and false patriotism, wholly ignoring BP’s reckless and dangerous safety record over the years.

The Deepwater Horizon oil rig was drilling at over 18,000 feet deep when it exploded, that is in depth half as high as Everest.   Anyone in the oil business will tell you that drilling at such depths is incredibly risky, even with the most conscientious oversight.   BP (revenues last year of $327bn) could and should spend far more on safety and environmental precaution.   Yet last year it devoted $16 millions on lobbying the US Federal Government in order to gain political access to minimize regulation, oversight and enforcement, as well as to seek leniency in circumstances such as the present one and to exercise a grip on the chief US safety watchdog, the Minerals Management Service.   (more…)

The news this weekend abounds with conflicts of interest:

*  Insider dealing (making a killing in buying or selling shares by using information to which one is privy inside an organisation, but which is not known to the public outside) persists in the City of London on a huge scale.   There were 1,485 tip-offs (‘suspicious transaction reports’) notified to the FSA over the last 5 years, leading to just 6 rogue dealers being convicted, compared with 584 in the US over the same period.   Why are we so complacent about this?

*  Notoriously the Financial Services Authority (FSA), the bank regulator, has failed over this issue to tackle the big names in the banking and trading establishment – unlike again what has happened in the US.   Might that be because the FSA is funded by the banking industry?

The two current big environmental disasters say it all.   BP has contaminated huge stretches of the Gulf of Mexico off Louisiana, and now its shares have lost a third of their value (a fall of $40bn), the company is subject to an ‘aggressive’ criminal investigation led by the US Government, and there is serious talk that BP (the third largest corporation in the US) could be broken by this environmental catastrophe.

Trafigura, a UK oil trader, it is now revealed, tried to get rid of hundreds of tonnes of oil wastes in the Netherlands by concealing how dangerous these wastes were, failed, had to pump it all back on board its tanker, and then ‘dumped it over the fence’ in the outshirts of Abidjan, Cote d’Ivoire – only now to face criminal charges in Amsterdam because it misled the authorities by claiming the toxic wastes were routine ‘slops’  from tank cleaning.

The scandal of both these incidents is that if they had occurred anywhere else except in the US of EU, the oil companies would have got away with it.    BP’s and Shell’s ravages in Africa particularly, but also in the Middle East and Asia, are regularly done with impunity while Trafigura’s poisoning of thousands of Africans goes unpunished (apart from very modest compensation) even today.   So what should be done? (more…)

The real lesson of the unravelling Gulf of Mexico fiasco is that the mega-corporations abuse their power, if given half a chance by light-touch regulation, just like the banks.   And the costs of dealing with that abuse of power can well run into hundreds of billions of pounds.

Why did the Deepwater Horizon disaster happen?   Because the health and safety regulations for BP (and of course for the other oil majors) have been whittled down to a point of almost complete ineffectiveness.   The safety standards on the exploded rig, owned by Transocean but leased to BP, were the responsibility of the Marshall Islands in the north Pacific becase all 35 Transocean rigs were registered there under the flag of convenience.   The aim was to scrimp on safety inspections.   As a US Congressman has just noted: “Coastguard inspection of a US-flagged mobile offshore drilling unit takes 2-3 weeks, but the safety examination of a foreign flag offshore offshore drilling unit takes 3-4 hours”. (more…)

Why such fuss about the BP oil disaster in the Gulf of Mexico?   True, the leakage is large, but still nowhere near the size of previous oil spills.   So far at least 60,000 tons have leaked from the Deepwater Horizon explosion, but the Gulf War oil spill (1991) involved 1.4 m tons, the Atlantic Empress tanker (Trinidad & Tobago, 1979) 287,000 tons, Fergana Valley (Uzbekistan, 1992) 285,000 tons, the nowruz oil field (Persian Gulf, 1983) 260,000 tons, and Amoco Cadiz (Brittany, France, 1978) 223,000 tons.   The Exxon Valdez spill off Alaska with which the current Gulf of Mexico is being compared amounted to some 34,000 tons.   So what’s so special this time?   Answer: because it directly impacts on the US.

No matter that 2,000 major spillages in the Niger Delta has never been cleaned up by Shell, or that rivers and wellls in at least 7 African countries have been badly polluted, or that huge stretches of 3 Latin American countries have been ruined by spillages, blowouts and toxic dumping, or that at least 4 of the 7 ugly Oil Sisters currently confront dozens, even hundreds, of lawsuits even up to $30bn a time (Ecuador).   All this can be spun out, got rid of  modestly out of court, or brazenly faced down.   But not when America is involved and the US President himself takes up the issue.   That cannot be right. (more…)

It has just been reported that the Wall Street bank, Lehman Brothers, in its final days in September 2008 set up accounting ‘gimmicks’ which falsely gave the impression that its balance sheet was $50 billions stronger than it actually was.   and that the auditors, the UK accountancy firm, Ernst and Young, when alerted to this by the Lehman vice-president, “took virtually no action to investigate”. (more…)

The Guardian story about the 42 million green bulbs sent http://www.guardian.co.uk/business/2010/mar/07/energy-lightbulbs-wasted-lax-regulation to British homes under the CERT (carbon emission reduction scheme) in the last quarter of last year, though few customers had asked for them, illustrates how devious and manipulative comopanies are when left to their own devices in an open market.   They were exploiting loopholes to meet their obligations in the cheapest way possible, even though they knew perfectly well that alternatives like cavity wall insulation would save far more energy.

Several other recent evens illustrate the same theme:

*  Research by ICIS Heren has shown that the forward price of wholesale gas fell last year by two-thirds from over £1 a unit to around 36p, but energy firms have reduced their prices by less than a quarter of this reduction, using their market power as middle-men to pocket the difference in exorbitant profits.

*  EU regulators have noted that Big Pharma patent-holders frequently pay a maker of generic drugs to delay their launch of a cheap copy – a delay that they calculate causes generic drugs to arrive 6 months or more after the relevant patent expires, costing the consumer over £3bn a year.

*  Trafigura, the British oil trader that bought contaminated oil on the cheap and then dumped the waste in West Africa, which led to 15 deaths and thousands hospitalised, is an icon of corporate capitalism – keeping the profits and dumping the costs on someone else.   Price risks are dumped on farmers, health and safety risks are dumped on sub-contractors, insolvency risks are dumped on creditors, social and economic risks are dumped on the State (notably by the banks), toxic waste is dumped on the poor, and greenhouse gas pollution is dumped on everyone.

The £11m pay-out now being made to the disgraced MG Rover 5, bringing their total ill-gotten gains to £42m, raises yet again the neglected issue of corporate ethics which are now in their worst state for decades. The understandable feeling among the workforce who lost their jobs overnight, had their pensions cut and got only basic statutory redundancy pay, is that they should be taken to the courts for fraud. In fact the Phoenix 4 were extremely careful to follow legal advice whilst elaborately extracting over £40m from the company wind-up which should have been put into the workers’ trust fund that they set up before the company failed in 2005. Instead they paid much of the money into an offshore trust registered in Guernsey. The fact that the report finally published into MG Rover two months ago did not accuse them of actual law-breaking (though being acutely critical of their behaviour) prompts again the urgent need to establish OPSE – a statutory Office to regulate Private Sector Ethics. Several other scandals in recent weeks and months justify the same requirement.

(more…)

There are several lessons to be drawn from the exposure, after 3 years of evasion and intimidation, of the systematic cover-up of one of the biggest toxic oil-dumping scandals for decades. Trafigura, the world’s third-biggest private oil trader, bought up hundreds of tonnes of lethal sulphur-contaminated Mexican gasoline and dumped it on wasteland around Abidjan, the capital of Cote d’Ivoire in west Africa, which caused according to official estimates 15 deaths, 69 persons hospitalised and 108,000 medical consultations by those affected. Leaked internal emails show that the traders were told in advance that the chemical process of ‘caustic washing’ which they used created such dangerous wastes that it was banned in the West. But they went ahead, dumping it without any warning in a third world country, because as the emails revealed they expected to make profits of $7m a time from buying up the contaminated gasoline ‘bloody cheap’. This awful saga shows the drastic hole in regulations that exists and makes clear the reforms now urgently needed.

(more…)

One factor which underpins the current US vilification of the NHS, but which has drawn little attention, is the unbridled power of healthcare business lobby. It has the funding, the PR, the lobbying machine, the advertising reach and the political muscle to launch a torrent of mistruths and half-truths which can change the terms of a debate. It commands the flow of corporate donations which oils the path to political influence whichever party wins an election, whether in the US or here. It offers consultancies, directorships and advisory roles for a constant stream of former ministers and officials who mutate effortlessly into corporate lobbyists. It can even threaten to overturn the key policy reform of a popular President who has just won a convincing mandate for it from an overwhelming electoral victory. Rampant corporate power, the obverse of corporate accountability, is now a central political issue on both sides of the Atlantic. Although the lies and intimidation now being so blatantly deployed to defend the huge insurance vested interests in the US are egregiously odious, the parallels with the UK healthcare, pensions, banking, construction, pharmaceuticals, energy and defence industries is uncomfortably close.

(more…)

The killing of 186 British soldiers in Afghanistan is, rightly, producing huge repercussions in foreign and defence policy. So why has the killing of 229 people last year, when they were doing nothing other than working for their employer and for their country, passed without mention? That is shameful when the official Health and Safety Executive admits that over 70% of major injuries and deaths in the workplace are due to management failures and therefore could have, and should have, been prevented. All deaths are a tragedy for the family involved, but a death at work is almost always very traumatic, made even more so when the employers have behaved carelessly, negligently or criminally and yet seem to escape scot-free or at least not be subject to appropriate penalties. So why do we not take far more seriously this large annual swath of avoidable killing, especially when the true figures are far higher than the official statistics ever admit to?

(more…)