Tuesday, July 13, 2010

BP Chief to Express Contrition in Remarks to Panel : The New York Times



BP Chief to Express Contrition in Remarks to Panel

Doug Mills/The New York Times
“We care about the small people,” BP’s chairman, Carl-Henric Svanberg, said after the company’s deal with the White House.

WASHINGTON — BP’s embattled chief executive, Tony Hayward, prepared to tell Congress on Thursday that he was “deeply sorry” for the oil disaster in the Gulf of Mexico, seeking to demonstrate that he and the oil giant understood the enormity of the spill’s environmental, economic and human toll.

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President Obama said that in talks with Mr. Svanberg, he had emphasized the desperation of many people on the Gulf Coast.

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Mr. Hayward has faced withering criticism for his response to the spill, and was expected to receive another onslaught of anger as he testified before the House panel later Thursday morning.
“People lost their lives; others were injured; and the Gulf Coast environment and communities are suffering,” Mr. Hayward said in prepared remarks to be delivered to the House Energy and Commerce Committee. “This is unacceptable, I understand that, and let me be very clear: I fully grasp the terrible reality of the situation.”
Also on Thursday, Mary L. Kendall, acting inspector general of the Interior Department, told lawmakers that the Minerals Management Service was taking a “completely backwards” approach in investigating the spill, “gathering evidence via public hearing rather than developing evidence to culminate in a public forum.”
Ms. Kendall underlined the serious shortage of minerals service inspectors covering drill sites in the Gulf of Mexico. There were only 60 inspectors there to oversee nearly 4,000 drilling facilities, while on the Pacific Coast 10 inspectors cover only 23 facilities, she said in testimony prepared for a House Committee on Natural Resources subcommittee hearing.
The minerals service has a difficult time recruiting inspectors, Ms. Kendall said, because the oil industry tends to offer considerably higher wages, and inspectors in the Gulf operate “with little direction as to what must be inspected, or how.” Mr. Hayward’s appearance before the Congressional panel comes one day after President Obamaannounced that BP would create a $20 billion fund to pay damage claims to thousands of fishermen and others along the Gulf Coast. BP also said it would suspend dividend payments to shareholders.
In prepared remarks, Mr. Hayward offered deep contrition, but few answers to the pressing questions stemming from the explosion aboard the Deepwater Horizon offshore rig, and the two-month oil spill.
“How could this happen?” Mr. Hayward said in the statement. “How damaging is the spill to the environment? Why is it taking so long to stop the flow of oil and gas into the Gulf?”
He went on to say: “We don’t yet have answers to all these important questions.”
The $20 billion fund announced on Wednesday will be administered by Kenneth R. Feinberg, the lawyer and mediator who ran the fund for victims of the Sept. 11 attacks and has emerged as a troubleshooter on issues likeexecutive compensation and resolving claims for asbestos and Agent Orange victims.
While acknowledging that oil is likely to continue spewing from the well for perhaps months to come, Mr. Obama was able to throw something of a lifeline to desperate coastal residents worried about meeting payrolls, mortgages and shrimp boat payments.
Under the famous portrait of a charging Theodore Roosevelt on horseback, administration and company officials haggled over last details in an extraordinary White House meeting that went more than four hours, double the time scheduled, and was punctuated by breaks as each side huddled separately. Finally, participants said, Mr. Obama sealed the deal in a private, 25-minute session with BP’s chairman, Carl-Henric Svanberg.
“This is not just a matter of dollars and cents” for a region upended by the spill, Mr. Obama, who returned Tuesday from a fourth tour of the coast, said he had told Mr. Svanberg.
“I emphasized to the chairman,” he said, “that when he’s talking to shareholders, when he is in meetings in his boardroom, to keep in mind those individuals — that they are desperate, that some of them, if they don’t get relief quickly, may lose businesses that have been in their families for two or three generations. And the chairman assured me that he would keep them in mind.”
Mr. Svanberg, looking somber as he left the White House, confirmed to waiting reporters that the president seemed “frustrated because he cares about the small people.” But he added: “People say that large oil companies don’t care about the small people. But we care. We care about the small people.”
The “small people” comment set off an immediate uproar in the blogosphere and elsewhere from people who said it showed BP’s indifference to those harmed by the spill. A BP spokesman called the remark a “slip in translation” by Mr. Svanberg, who is Swedish. Later Wednesday Mr. Svanberg apologized, saying he was “very sorry” he had spoken “clumsily.”
“What I was trying to say — that BP understands how deeply this affects the lives of people who live along the gulf and depend on it for their livelihood — will best be conveyed not by any words but by the work we do to put things right for the families and businesses who’ve been hurt,” he said in a statement.
Mr. Svanberg said the BP board, which met in emergency session on Monday in advance of the White House meeting, had agreed not to pay further dividends to shareholders this year. Faced with mounting criticism of his company, including from within the oil industry, he denied reports that BP had taken safety shortcuts on the Deepwater Horizon rig, where an April 20 explosion killed 11 workers and set in motion the leak that Mr. Obama has called the worst environmental disaster in American history.
Still, Mr. Svanberg said he wanted to “apologize to the American people on behalf of all the employees of BP.”

Robbie Brown contributed reporting from New Orleans, Julia Werdigier from London and Brian Knowlton from Washington.

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