BP politics: Has BP moved from villain to undeserving victim? That's an emerging view in the UK. The environmental crisis in the Gulf of Mexico has created a financial crisis for its shareholders - plummeting share price and debt now trading at junk levels. Some Brits are offering a nationalist defence of what used to be British Petroleum.
The boss of the Institute of Directors has condemned President Barack Obama's rhetoric as “inappropriate” while the Daily Telegraph says Obama has his boot on British pensioners’ throats. And Boris Johnson, the Mayor of London, described the “anti-British rhetoric” as a matter of “national concern”.
These concerns seem misplaced. A disaster of this scale was bound to provoke a backlash, whatever BP’s nationality. The US president has put pressure on BP to suspend its dividend, sack its chief executive, pay proper compensation and come up with an updated plan for fixing the leak. None of these are out of line, given how badly the company has handled its response to the crisis.
The main blame has to sit with Tony Hayward, BP’s chief executive, who has made a series of public relations gaffes. The best thing he could do for the company right now is to announce he will resign as soon as the leak is plugged.
The chairman, Carl-Henric Svanberg has also been weak. A heavier hitter, like his predecessor Peter Sutherland, might have been able to protect the company from some of the political backlash. Svanberg has been virtually invisible. The board also failed to show leadership in suspending the dividend. It will probably have to axe it anyway - but will now get no credit for doing so.
David Cameron will take up the BP issue when he speaks to Obama this weekend, according to the Financial Times. Britain’s prime minister should certainly seek to protect BP from extreme measures such as confiscation of assets - as well as ensuring that there isn’t any wider backlash against British industry. But Cameron can’t and shouldn’t defend the indefensible. If BP wants an effective defence, it must first show much more humility..
