Risks of Magement Budgets

A failure to examine constraints on risk management budgets— and collectivism — a conviction that existing company policy is, by definition, the best that could possibly be. Most significant, is the failure to establish a risk control or safety awareness mindset at all levels of the corporate hierarchy, particularly at middle-management levels, and to effectively offset a "get it done, at the lowest possible cost" attitude at the "coalface."What needs to be done to prevent another disaster? There are generally acknowledged to be three material stages in protection from oil spills: Prevention, Response and Remediation. They should have put particular attention to the following steps.

The need to match risk awareness and cost awareness. The one must not become the enemy of the other. They both must go hand in hand.

Prevention: implementing a successful management scheme and risk assessment for the oil industry, and indeed the shipping industry as a whole. Including in this process, an effective third-party audit system. Ensuring that risk management programs, exemplified by the ISO System and the ISM Code, are not subject to unreasonable "starvation" by corporate budgetary controllers. Funding an adequate scientific and engineering platform before, and not during or after, the disaster takes place. Requiring that government agencies have the adequate fiscal and material resources to conduct remediation, after the spill has taken place.

Emphasizing the need for community involvement and understanding during "peacetime," that is, before an incident occurs. Cooperate with scientific, organized environmental advocacy groups, and technical experts and other public and not-for-profit organisations to develop successful collaborative practices, drills, informational and problem-solving models. The management of risk, in terms of oil spill prevention, means the right measures be taken to avoid disaster in the first place. Prevention and remediation go hand in hand. Planning therefore begins before the spill, to avoid it and to have a seamless response process in place.

What was done after April 20, why and how the process worked, and what needs rethinking, will be studied and debated for some years to come. It is clear that a more enforceable system of assessment and management of risk factors is needed. There is no understandable reason—except cost cutting - for BP to have incurred approxmately $40 billion in liabilities; or for there to have been loss of life; or serious damage to several major industries, from shellfish to petroleum; or vast environmental harm; or the possible destruction of a company with thousands of investors and eighty thousand employees; — except for its failure to embed an effective safety management system, when and where it mattered."But bean-counters seldom have remorse; quality, safety and risk management will often have no place in a corporate budget unless the law compels otherwise, and imposes severe penalties for noncompliance"