Oil Spill: Did risk management fail?
National Underwriter editor-in-chief Sam Friedman’s recent editorial suggests that part of the blame for the recent oil spill in the Gulf of Mexico lies on the shoulders of risk managers at BP. Mr. Friedman suggests that loss prevention measures were not implemented as they should have been, and that future drilling for oil in sensitive areas requires better risk management.
What role, and how much authority, should risk managers play in planning for and preventing such occurrences? Let us know.
Just like a car would run out of gas on the highway,other drivers can not really tell whether or not the driver knew that the car was running out of gas and ignored it for some reasons better known to him,or he did not know about it because the gas gauge was faulty and was showing that the car had enough gas while actually there was not enough.
If the gauge was showing that there was enough gas while actually there was not and the driver has never had the gauge checked as a maintenance measure,or he has had it checked and then ignored the faulty gauge,as outsiders we can not really tell what exactly happened unless the driver tells us or a mechanic really diagnoses the problem and from that point we can know who to blame.
The risk managers at BP can not be blamed just by overlooking the oil spill. In any case, there has to be some good analysis of whether or not all the BP’s departments responsible for the cause of the oil spill really knew about it or not.
Unless the case is well laid on the table and analyzed well,from the outsider perspective we can not really tell who is to blame until we get to know what exactly was happening internally as insiders at BP-did they know about the faultiness or they did not.
If they did not know about it could they have taken the right measures to have handy information about the status of the site?
In my opinion the risk managers should analyze such foreseeable or unforeseeable risks and take the right measures to prevent them from occuring or protect themselves from such risks or minimize them whenever possible.
As far as authority is concerned,risk managers should have the authority to approve or disapprove risk related decisions made by senior management.
They should be involved or be part of decision makers while making risk related decisions so as to avoid making irrational decisions that may proof disastrous in the long run.
For example,assuming that the risk managers knew about the faultiness and they could only recommend to the engineers that the problem be handled as an emergency and fix it right away due to the risk underlying the faulty diagnoses by the engineers, then it would not have had a stronger impact as it would have if they had the authority to have that faultiness handled as an emergency.