BP and Massey Energy -- The Perils of Government Deregulation

If there is one thing we can learn from the BP oil spill disaster and the Massey coal mine disaster (not to mention the stock market mess), it's this: the move away from government regulation and the increased dependence on companies to police themselves is itself a disaster.

Since at least the 1980s a steady chorus of anti-government propaganda from the Right has resulted in a weakening of government regulations and laws, whether through decreased funding, relaxing of safety regulations, or increased exemptions from safety rules.  During the Bush years, the foxes guarded the henhouse, as industry insiders were given top government positions regulating the industries from which they came.  All of this contributed to the disasters we now face.

BP, for example, took advantage of exception after exception from safety rules when setting up its deep water rigs.  The feds were mostly absent as BP set up its deep water rig in the Gulf of Mexico, even as BP's own engineers were questioning the Company's methods.  Government safety inspections of deep water wells were mostly nonexistent, consisting mostly of  "helicopter visits to offshore rigs to sift through company reports of self-administered tests."  http://www.nytimes.com/2010/06/06/us/06rig.html?pagewanted=2.  In some cases, oil officials filled out safety reports in pencil, which government inspectors then filled out in pen and turned in.  NY Times Report. 

Not only is the government hamstrung by the cozy relations between the regulated and the regulators and the decrease in funding, but BP and companies like it have the resources to simply outspend and outgun the government.  BP, with the worst safety and environmental record by far of any oil company operating on US shores, has paid something like 700 million in civil penalties and fines the past in the past few years.  While that may seem like a lot, it is merely the cost of doing business:  in 2009 the company reported profits of nearly 14 billion dollars, and nearly 25 billion in 2008.  In relative terms that's like the average Joe paying $100 for a traffic ticket -- does that really deter anyone?

Massey, likewise, took advantage of lax governmental enforcement and looked at fines as another way of doing business.  As I reported in an earlier post, Massey energy, owner of the Upper Big Branch mine where dozens of workers were killed, paid millions in fine and had a horrendous safety record.  http://phillylaborlawyer.blogspot.com/2010/04/more-on-masseys-mine-disaster.html.  It apparently concluded that cheating on safety was worth the risk of paying small fines. 

What does any of this have to do with the labor movement?  Well, labor has been a canary in the coal mine as far as government deregulation and lax enforcement goes.  Big business figured out  years ago that the lack of any meaningful enforcement of the National Labor Relations Act means that companies can simply disregard the law during organizing drives without any real consequences.  After all, if you get caught violating the NLRA, the result most of the time is that the company has to post a notice saying it violated the Act.  So what?  And if an employer unlawfully fires an employee during an organizing drive, all it has to pay is the back pay of the employee -- minus the money the employee could have or should have made.  Without any real consequences, companies will take risks.  And without any meaningful government regulation or enforcement, bad actors like BP and Massey will push the envelope in the name of profit, safety and the environment be damned.