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Corporate risk management in America changed from the need to protect the company to the need to protect the executives and Wall Street. The problem with this change, which took place during the 1980s, is that in the end everyone loses, especially the nation. BP may be a British company, but it has many subsidiaries here and is quoted on the U.S. stock exchange. It is an oil company, one of the Big 5, and anything they do reflects well or badly on the other companies: especially poorly when there is a disaster.
When PanAm went bust, it was not the Lockerbie disaster that caused their demise. It was corporate mismanagement of a situation caused by terrorists, poor PR and, above all, a seeming disdain for the passengers and those killed on the ground over the interests of the company.
PanAm’s top executives all had golden parachutes. The head of PR took his $8 million ’chute in 1987 and swanned off to retirement in Bermuda. What did he care if management left the sinking ship (which they had piloted onto the rocks)? What did any of the directors care if the pension fund of employees was raided to fill the financial void for the Wall Street honchos?
BP is going bust. The management there is to blame. They may not go bust today or tomorrow, and they certainly have plenty of assets (in banks and underground oil), but they also have huge liabilities brought about by the incompetency of the upper management. Seeing the three oilmen testifying before Congress reminded me of the Three Stooges — it was his fault, no it was his, no it was the first guy’s fault — slap, smack, bop, yada yada yada. They have no clue.
It doesn’t matter if, by the time this makes it to print, they have capped the leaking oil (let’s hope). What matters is that upper management is so out of touch with reality, they are so cushioned, so coddled, they have no perspective left for the little things that can bring down a company, no exposure to the minutiae that needs to be cared for to preserve the company, jobs and profits. In short, they are outsiders in their own company.
Let’s take just one person there, CEO Tony Hayward. He’s a nice man, honest but made myopic by his lifestyle and money. Announced in March this year, his BP payment is considered small, just over $6 million, up 41percent from the year before.
OK, let’s make believe this sounds pretty good to you and you’d like to be a CEO. Now what you should remember is that this is a 12-hour-a-day job, six days a week. In return, you get stock options (discounted shares, sometimes 20 percent of real cost), 24-hour-a-day servants at your beck and call, drivers, secretaries, assistants, private planes, limos, food, unlimited restaurant expenses, never having to stand in line anywhere (including the DMV — think of it!), no public transportation ever and full living accommodation expenses (apartments, housing allowances, moving fees, red carpet service). In short, you are the company’s baby and they breastfeed you anything you need to keep you working and happy.
So, what do you do with that money anyway? Assuming 40 percent tax (well, we know that’s not true, but let’s assume), you still have $720 to spend for every waking hour of every day, 52 weeks a year. That’s $70,000 a week. Gee, you have to wait three weeks to buy a Bentley. But why buy a Bentley when you have a BP limo anyway? And a private plane? Nope, don’t need one of those, either. How about a house? But why, when you have company accommodation?
And what about the stock options? Given to you on Jan. 31, you could cash them in the next day and make another couple of tens of millions. So what if you have to pay the government capital gains taxes? It’s all profit, not really salary, the way we consider payday.
So, how does Hayward ever get to know about, care about, his company drilling the ocean floor, 5,000 feet down with blow-out equipment only rated (certified) to 1,500 feet? How does he get to care or know about the drilling company, Transocean, a company they hired to drill a BP well, flying a BP flag with no BP employees to report to him? Why would he instruct BP to care about an oil spill except to somehow recover the oil wellhead, recapture the oil, maximize profits?
If it all goes sour, he’ll have his money, he’ll have a golden parachute and he can retire. There is no incentive, there is no reality check to manage the risk of such disasters until after they happen. Then their answer is to guess, unplanned errors piling on top of one another, while they continue their lifestyle. They are totally insulated, unprepared, totally immune to any consequence except, perhaps, a stoppage of salary if they are fired.
The problem with the Gulf oil spill, perhaps the worst ever anywhere, is that it was preventable, yes, but not preventable at all with no real risk management in place in American business any more — none in place that is beyond risk managing the safety of the executives.
Peter Riva, formerly of Amenia Union, lives in New Mexico.
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Telecom Reg’s Best Kept On the Books
When Connecticut land-use commissions update their regulations, it seems like a no-brainer to jettison old telecommunications regulations adopted decades ago during a short-lived period when municipalities had authority to regulate second generation (2G) transmissions prior to the Connecticut Siting Council (CSC) being ordered by a state court in 2000 to regulate all cell tower infrastructure as “functionally equivalent” services.
It is far better to update those regs instead, especially for macro-towers given new technologies like small cells. Even though only ‘advisory’ to the CSC, the preferences of towns by law must be taken into consideration in CSC decision making. Detailed telecom regs – not just a general wish list -- are evidence that a town has put considerable thought into where they prefer such infrastructure be sited without prohibiting service that many – though not all – citizens want and that first responders rely on for public safety.
Such regs come in handy when egregious tower sites are proposed in sensitive areas, typically on private land. The regs are a town’s first line of defense, especially when cross referenced to plans of conservation and development, P&Z regulations, and wetlands setbacks. They identify how/where the town plans to intersect with the CSC process. They are also a roadmap for service providers regarding preferred sites and sometimes less neighborhood contention. In fact, to have no telecom regs can weaken a town’s rights to protect environmental, scenic, and historic assets, and serve up whole neighborhoods to unnecessary overlapping coverage and corporate overreach. Such regs are unique to every town and should not follow anyone else’s boiler plate, especially industry’s.
Connecticut is the only state that has a centralized siting entity for cell towers. The good news is that applicants must prove need for new tower sites in an evidentiary proceeding and any decisions have the weight of the state behind them. The bad news is that the CSC used to be far less industry-friendly and rote in their reviews, which now resemble a check list. There is an operative assumption at CSC that if an applicant wants a tower, they must need it, otherwise why spend significant money to run the approval gauntlet? This reflects a subtle shift over the years at CSC from sincere willingness to protect the environment toward minimal tweaking of bad applications with minor changes. The bottom line is that towns really cannot rely on the CSC to do all the work for them.
What CSC issues telecom providers is a “certificate of environmental compatibility” after an evidentiary proceeding (not unlike a court case) with intervenors, parties, expert witnesses, and the service provider’s technical pro’s sworn in and subject to cross examination. Service providers get to do the same with any opposition from intervenor/party participants – like towns and citizens -- and their experts. It’s an impressive process whose ultimate goal is the fine balancing between allowing adequate/reliable public services and protecting state ecology with minimal damage to scenic, historic, and recreational values. They unfortunately often fall short of their mandate – like approving cell towers with diesel generators over town aquifers -- evidenced by CSC only rejecting about five cell towers in the past 15-20 years.
The CSC was founded in 1972 and clarified its mission in the 1980’s to prevent the state from being carved up willy-nilly by gas pipelines, high tension corridors, and broadcast towers. With the sudden proliferation of cell towers beginning in late 1990’s, it became the most sued agency in Connecticut by both an arrogant upstart industry if applications were denied and by towns/citizens when bad sites were forced on them. CSC gradually formed a defensive posture that drives their decisions toward industry with deeper pockets and attorneys on retainer.
For citizens, nothing can wreck one’s day like the CSC. It behooves towns to protect what little toolkit they have, and understand the legal parameters of the CSC’s playing field. The CSC is not a “normal” government agency where municipal/citizen redress is based on logic and local support. Their process is largely immune to everything but specific kinds of evidence – like town regs with setbacks/fall zones, radio frequency transmission signal strengths, sensitive areas identified, and detailed wildlife inventory, among others.
There is a current cell tower fight involving two intervening towns -- Washington and Warren; both with good cell tower regs – over a tower site within 1200’ of a Montessori School, near Steep Rock’s nature preserves with comprehensive geology/wildlife databases that include endangered, threatened and special concern flora and fauna, on established federal/state migratory bird flyways, within throwing distance to a historic site capable of being listed on the Underground Railroad, and with an access road on a blind curve entering a state highway that will permanently damage wetlands, vernal pools, and core forests. There are well credentialed environmental experts, including Dr. Michael Klemens, former chair of Salisbury’s P&Z, as well as the former director of migratory bird management at the US Fish and Wildlife Service, and an RF engineer testifying to alternative approaches, plus three attorneys representing intervenors. It is the most professional challenge I have seen at CSC since Falls Village successfully mounted one that protected Robbins Swamps several years ago.
The hearing is ongoing, with uncertain results. To see what it takes today to stop an inappropriate tower siting, see Docket #543 under “Pending Matters” at https://portal.ct.gov/csc before removing local cell tower regs – the lowest hanging fruit that any town can possess in case it’s needed.
B, Blake Levitt is the Communications Director at The Berkshire-Litchfield Environmental Council. She writes about how technology affects biology.