By Madeleine Wahlberg
Cameron’s ‘explosive’ approach to HS2 – give the reins to the managers at the time of the BP Texas refinery explosion.
We recently learned that Mr Cameron has appointed John Manzoni as head of the Major Projects Authority (MPA). Given that HS2 has been and will continue to be ‘guided’ or driven by the MPA, this appointment could be of some interest.
It is worth a quick reminder of what the MPA is supposed to do. It includes:
undertake assurance at key stages in projects’ lifecycle to assess whether they will deliver on time, within budget and to the required level of quality
intervene directly, where appropriate, in any failing major projects
work directly with departments to build capability in projects and programme management.1
Now this suggests that, at a minimum, we might expect the new appointment as head of the MPA to be something of a ‘whizz-kid’ in relation to at least 2 things: identifying risk; and good management. So I wandered around some web sites and began to feel less than reassured on both counts.
Firstly, a Guardian article2 pointed out that this is the same John Manzoni as the senior manager in BP during the Texas refinery explosion3. For more detail you can read a Wiki entry on the accident.4 What is important for us to note is that there were several internal as well as US government reports on the accident and they clearly identified an unacceptable safety record before, during and even after the accident5. Here is one press report: Mr Manzoni was “lashed in an internal BP study for failing to act on ‘clear warning signals’ at the US refinery, where a devastating explosion in March 2005 killed 15 workers and injured 170 … his reputation was badly hurt when … he had complained of travelling to Texas City after the fire ‘at the cost of a precious day of my leave’” 6
These were not just safety issues caused because the refining of oil is always a challenging technical process. The reports also identified key weaknesses in the MANAGEMENT of safety which the Bonse Report (according to the New York Times) referred to as “a safety culture that seemed to ignore risk, tolerated non-compliance and accepted incompetence”7. To give another example, in the Baker Panel report (see the Wiki reference 4) they identified that BP management over-focussed on personal safety issues (tripping etc) rather than on key production safety issues; and that the pressure to cut costs was behind the decline in the safety culture.
Now, does this make you feel reassured or uncertain about the approach that the MPA under John Manzoni might take to identifying and managing risk and safety with ultra high speed HS2? Given the declared intention of Cameron to save more money on HS2, do you think the MPA will be more or less likely to defend safety given the BP experience that is being brought in to advise him? Or is it a clear statement that one of the functions of a new-look MPA will be to drive down the cost of HS2, de-valuing safety issues?8 Like BP, like HS2??
Actually, there is even more to concern us. It seems that Mr Manzoni’s boss in MPA will be the same as his boss in BP – Lord Browne of Madingley9. Lord Browne is now a life peer and is ‘Lead non-executive director’ in the Cabinet10. The MPA will be central to his Cabinet level work. If you look under Lord Browne’s register of interests, you will see that they seem to include at least 9 directorships and remunerated positions in oil and gas concerns. If you look across John Manzoni’s background and interests, you see a similar connection to oil and gas – BP, Talisman Inc and Adamant Ventures.11
Does this seem a healthy situation to you? Something that will make MPs and the public feel confident about the quality and independence of judgements made by the MPA? It seems that two people now at the top of managing the MPA were both part of the management of BP at a time that a managerially weak approach to risks and safety were identified in relation to the Texas oil refinery accident12. Moreover, they both apparently remain attached to interests in the oil and gas energy sector which gives me personally some concern about the neutrality of the involvement of the MPA in making decisions about fracking. I don’t feel as thrilled as Francis Maude a cabinet office minister, who said Manzoni had “an impressive record of leading global operations and delivering complex, challenging briefs … His experience will be invaluable to the civil service and to taxpayers. I’m delighted he is joining the Cabinet Office, and this is a great example of how we can bring talented men and women with private-sector experience into Whitehall.”13 Mr Maude, how exactly do you define “an impressive record”?
And it gets worse. We know about Cameron’s refusal to make public the November 2011 MPA report on HS2.14 This was put down as an “exceptional” veto. However, it would seem that transparency is just not an MPA flavour. One MP tried to understand what exactly Lord Browne does but this is what he was told: “If we told you what he (Lord Browne) was up to behind the scenes, said Francis Maude, he wouldn’t be able to make the contribution that he makes. Too much transparency would “enable inferences to be drawn about the nature of his contribution. This would erode confidence that his advice would remain confidential and would make it more difficult for him to perform his role effectively. This would therefore prejudice the effective conduct of public affairs.” Basically, we can’t tell you but it’s for your own good. When Sir Humphrey parroted this stuff on ‘Yes Minister’ we thought it was comedy.”15 BP didn’t like transparency16: MPA doesn’t like transparency??
And it gets worse. You may say, ‘Mr Manzoni has so much good management experience behind him that we should pass on from his not very happy record on the identification and management of risk’. Well let’s look at John Manzoni’s reputation for ‘good management’.
Is this the same John Manzoni who it seems “agreed to step down,”17 from Talisman Energy Inc (apparently with a nearly $8.5 million payout18) because of serious management concerns?19 You can read the story yourself but basically, according to the Globe and Mail, “Mr. Manzoni got five years on the job, almost to the day. That signals that the board gave him a chance to make it work, but decided upon looking back at the achievements of the past half decade that a change was needed. Five years is more than enough time to judge a CEOs performance, without looking hasty.” So, if I’ve got the story straight, the John Manzoni who has been appointed to the MPA overseeing HS2 was not really encouraged to stay at both of his previous employments20 after serious problems on the job. Is this what Francis Maude means by “an impressive record”? Will HS2Ltd be moving to a ‘paid to go’ model as a staffing turnover strategy when managers or contractors fail?21 Like BP and Talisman: like HS2??
Was Cameron given poor advice to appoint someone with this sort of immediate track record to ensure “the effective management“ of projects like HS2? Or have we misunderstood Cameron’s idea of project management? Is Cameron’s vision of a ‘new-look’ MPA one that will depend on a lack of transparency; a less-than-reassuring attitude to risk and safety; the oil industry’s record for democratic and environmental issues22; surrounding yourself with those who will not challenge you23; and million pound rewards for not-doing-ever-so-well?
Anyone feel like contacting their MP to see whether they feel re-assured by the recent appointments to the MPA?
5 In October 2009, the USA courts imposed an $87 million fine on BP for failing to correct safety hazards revealed in the 2005 explosion ie 4 years earlier! It cited over 700 safety violations. See Wiki report.
8 If you want to read a long article on BP and safety, here is one: http://www.propublica.org/article/bp-accidents-past-and-present
10 You can read more about him in this role here: https://www.gov.uk/government/news/uk-leaders-appointed-to-support-whitehall-s-transformation
12 According to the New York Times, Mr Browne was not faulted over the Texas explosion but left BP early due to a UK High Court decision that Browne had lied to the Court. See reference 7.
16 BP had to be forced by court order to make the Bonce Report on the Texas explosion public. See reference 7 New York Times.
21 Watch out for the ‘golden goodbye’ line coming up soon in the HS2 budget? See BP annual accounts for 2007 p64 https://bib.kuleuven.be/files/ebib/jaarverslagen/BPAmoco_2007.pdf
22 Here is one illustration: http://platformlondon.org/2014/02/05/pollutants-and-petcoke-environmental-struggles-and-the-great-lakes/
23 This article in The Daily Beast on Lord Browne leans to that view: http://www.thedailybeast.com/articles/2010/07/01/lord-browne-and-bp-oil-spill-outrage.html