Corporate Recklessness and Our Future

A controlled burn of oil is conducted near the source of the BP Plc Deepwater Horizon oil spill in the Gulf of Mexico off the
A controlled burn of oil is conducted near the source of the BP Plc Deepwater Horizon oil spill in the Gulf of Mexico off the coast of Louisiana, U.S., on Thursday, July 15, 2010. BP Plc said that a pressure test on its damaged Macondo well halted the flow of oil into the Gulf for the first time in three months. The oil spill, the biggest in U.S. history, had been spewing 35,000 to 60,000 barrels of oil a day since the drilling rig exploded on April 20. Photographer: Derick E. Hingle/Bloomberg via Getty Images

The decision by the Obama administration to reopen federal drilling leases in the Gulf of Mexico to BP opens an interesting window into a fundamental question: What does it mean to hold a corporation accountable and responsible?

The administration justified the decision by asserting that it had put in place oversight mechanisms for BP, which, according to the New York Times, "must comply with specific ethics, corporate governance and safety procedures. There will be risk assessments, a code of conduct for officers and 'zero tolerance' for retaliation against whistle-blowing employees or contractors."

BP promptly grabbed its new window, overbidding its competitors to win 24 of 31 tracts leased last week. Environmental groups objected that BP had not yet finished the job of making the Gulf ecosystem and surrounding communities whole -- that oil spill related damage continued. Indeed, many marine biologists would say that making the Gulf whole is actually impossible -- that whatever BP does now, damages will continue for decades as they have in Prince William Sound, site of the Exxon Valdez disaster.

Granted that the "repair all the damage" test may be unworkable for that reason, the question remains, has BP really changed its stripes? It's important to recall that the stripes in question were not just inadequate management of ultra-deep off-shore drilling rigs. BP had been plagued with a casual attitude towards safety driven by its cost-and growth-obsessed culture, leading to massive oil spills in the Arctic and fatal refinery fires in Texas. More recently, the company concealed a massive, intentional venting of 500,000 pounds of carcinogens and other toxic gasses into Texas neighborhoods even as its Macondo gusher was dominating the evening news. BP was not a first time offender -- it was a serial violator. Had it been an individual resident of California, BP would almost certainly have received a life sentence in prison under the Three Strikes law.

Just as the US Government was signing its agreement with BP, saying the company was now ready to be a responsible citizen, BP's lawyers were playing legal hardball in multiple judicial venues. They lost a round when a federal judge ruled that BP could not wiggle out an earlier agreement governing who would be eligible to be paid for loss of business during and after the Macondo gusher.

They then prevailed in the first of a series of cases brought by neighbors of the Texas City refinery who were exposed to the toxic released during the 40-day period BP knew its refinery flare was not properly destroying benzene and other carcinogens. BP admits the release, admits it knew of it for 40 days while it went on, and admits that it didn't inform Texas regulators. BP claims that none of the neighbors can prove they were harmed -- which since cancer takes decades to develop, is cold comfort -- but the jury agreed health had not yet been established, so damages were not awarded. (Texas had let BP off for the refinery's six years of air pollution violations for $50 million -- a fine almost certainly lower than BP's financial savings from keeping the refinery operating when it should have been shut down.)

Whatever the merits of the jury decision in the toxic release case, BP's tactics suggest a relapsing, not a recovering pollutaholic. The company is still in denial, does nothing to make amends to those it harms except under court order or federal sanction. BP has never admitted that its underlying corporate culture and business model was a problem. At best BP seems like a dry drunk -- temporarily denied the drug it so desperately craves -- speedy, reckless growth and escalating profits from pumping oil its sole objective.

But BP is not the only company whose reckless behavior our society enables. The Monsanto Roundup resistance story has been in plain sight for a decade now. Monsanto has made billions selling genetically modified seeds whose benefit is that they can tolerate high applications of glyphosphate, an herbicide sold by Monsanto as Roundup. Early on Monsanto conceded that weeds would eventually develop resistance to glyphosphate, but promised it would develop new solutions. The day of reckoning has arrived. Sixty million acres of American farmlands are now infested with glyphosphate resistant super-weeds. Overall herbicide use, which Roundup Ready GMO seeds were supposed to reduce, has doubled. Costs of treating weeds have soared. "Over the past few years, the area planted with cotton has declined by 70% in Arkansas and by 60% in Tennessee." Monsanta has indeed developed a new set of GMO seeds -- on which it can make handsome profits. But these seeds require the use of older, highly toxic herbicides, like 24-D, which had been phased out because they cause cancer, and spread too easily to damage the crops of neighboring farmers.

It might seem perverse that Monsanto would follow a strategy that destroys the market for one of its own major products -- Roundup. But Monsanto was actually (and cleverly) exploiting a loop-hole in the US patent system. Glyphosphate is no longer patent protected -- so Monsanto doesn't make much money on it. And soon its Roundup ready seeds will also be out of patent protection. So to maintain its profits, Monsanto has developed a strategy which destroys valuable agricultural tools once they are in the public domain, so that farmers must pay ever higher prices for new proprietary Monsanto products.

Early on in the development of GMO seeds, there was talk of embedding these seeds with a so-called "terminator gene" which would prevent them from reproducing -- and if the gene crossed into other plants, would terminate their reproductive capacity as well. Faced with the protest, Monsanto pledged never to commercialize such a gene -- but its business strategies effectively terminate access by non-Monsanto customers to valuable agricultural techniques rendered ineffective by deliberate over saturation of ecosystems with Monsanto's GMO's.

But the consequence of industrially created resistance is not confined, sadly, to weeds. Far more outrageous has been the systematic reliance by the factory feed-lot industry on dousing healthy but inhumanely and unhealthily crowded livestock with steady doses of the same antibiotics used to treat sick humans. This prophylactic use of antibiotics is responsible for 80 percent of total US usage. For decades public health experts have warned that this abuse was contributing to the development of "Superbugs", pesticide resistant bacteria which now afflict two million Americans every year and kill as many as traffic accidents.

But in spite of the utterly predictable catastrophe pesticide abuse in livestock unleased upon the world's health care systems, we allowed livestock producers to make a predatory use of life-saving drugs to enable them to crowd more calves in a crate. This year the FDA announced a major change -- no longer would factory feedlots be allowed to use antibiotics to speed growth. It claimed "there will be fewer approved uses and much tighter control over the uses that remain." Antibiotic producers scoffed. Lilly's animal products division said, "Will it have an impact? Yes. It's not a material or significant impact..."

Why? Because health livestock can still be fed antibiotics at the same dosage as before -- as long as a veterinarian write a prescription saying it is to "prevent disease." Since overcrowded conditions encourage livestock disease, that's something any vet can, in good conscience, claim. Overcrowded, livestock dosed cows, pigs and chickens will get sick less often -- until the antibiotics they are fed no longer work for either animals or humans.

What is striking about these three examples is that they all involve predictable homicide -- some innocent people will be killed as an outcome of actions taken. This fact is, often, known to the companies involved, as well as to the public and the government. The actions continue in reckless disregard for these consequences. (In the case of Monsanto, the consequence, shifting farmers from glyphosphate to cancer causing herbicides is actually part of the plan -- essential to the business strategy.)

It's not OK for me to drive my car at a speed which I know, at some unpredictable future date, is likely to kill someone. The law says that as a human I am responsible for the results of my actions, even if I didn't actually seek them. I must act with prudence.

Yet we treat the managers and owners of corporations as respectable, even admired, members of our business leadership even when their businesses engage in predictable, negligent homicide. That says something very disturbing about our sense of moral responsibility.

Advocates of corporate immunities argue that such rights protect their human owners. But the logic behind a corporation is to protect those very owners from responsibility for its actions -- "limited liability." So neither the artificial person that is the corporation, nor the actual humans who own and benefit from its misdeeds, are responsible, even for catastrophic and predictable negligence and recklessness.

It is this double standard which is corrosively undermining our future.

A veteran leader in the environmental movement, Carl Pope spent the last 18 years of his career at the Sierra Club as CEO and chairman. He's now the principal advisor at Inside Straight Strategies, looking for the underlying economics that link sustainability and economic development. Mr. Pope is co-author -- along with Paul Rauber --of Strategic Ignorance: Why the Bush Administration Is Recklessly Destroying a Century of Environmental Progress, which the New York Review of Books called "a splendidly fierce book."

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