Some British politicians like to complain about the Obama administration's treatment of BP plc. They warn of the effect of an enforced dividend freeze on the poor British pensioner and complain that the president has broadened his anti-BP onslaught into a deliberately anti-British campaign for electoral purposes. Some even mutter darkly about the effect on our long-treasured "special relationship" with America.
It might be true that BP accounts for one pound in seven of all dividend payouts to British pension funds and other shareholders, but it is also true that BP is only 40% British-owned. A further 39% is U.S.-owned. American shareholders will be punished as heavily as their British counterparts for BP's undoubted misdeeds.
BP is guilty, even if we should take with a pinch of salt the claims that its American rivals are so safety-conscious that nothing like this could ever have happened to them. But what are the implications of that guilt?
BP should pay for the Deepwater Horizon explosion, the worst environmental disaster in U.S. history. Under pressure from the Obama administration, BP has agreed to create an independent $20 billion fund to pay claims, including lost oilfield worker wages.
It also suspended dividend payments for the year. BP can afford the costs of the cleanup and most foreseeable compensation claims from stricken fishermen and hoteliers.
Whether it can cover the potential claims of its own industry peers remains to be seen. But will it be so weakened that it becomes a takeover target or a breakup candidate? That's certainly possible if the politicians bar it from operating in the U.S., which would be vindictive and blatantly protectionist, but not beyond the bounds of possibility.
An opportunistic takeover at a fallen share price could have a similar effect, even without an official ban. Malcolm Rifkind, a former British foreign secretary, recently hinted that a Chinese national oil company, PetroChina Co. Ltd., might want to buy BP. When Cnooc Ltd. tried to buy California oil company Unocal Corp. back in 2005, a storm of protest from U.S. lawmakers forced the Chinese company to withdraw.
But Britain, on past form, might even be open enough, perhaps foolish enough, to allow such a takeover.
Punishing BP could also set an interesting precedent. Would it be time to reopen the Exxon Valdez case? Perhaps Exxon Mobil Corp. should, after all, be forced to pay at least the $5 billion it was ordered to fork out in 1994, before the fine was progressively reduced in higher courts?
Better still, perhaps the U.S. -- and its newfound friends in the G-20 -- could consider global liability for industrial accidents. We had the spectacle only this month -- 25 years after the initial disaster -- of eight Indian officials of the former Union Carbide Corp. finally being convicted for criminal negligence in a chemical gas leak in Bhopal, India.
According to Amnesty International, the gas killed 7,000 people outright, led to at least a further 15,000 deaths in the ensuing years and left more than 100,000 people with chronic diseases and birth defects.
A pact between the Indian government and Union Carbide absolved the corporate giant of all criminal and civil liabilities related to the disaster for $470 million. Although the immunities were subsequently revoked in the Indian courts, the U.S. refused India's extradition request for Union Carbide's then-chairman Warren Anderson to be brought to trial.
Here's another thought. Union Carbide was bought by Dow Chemical Co. in 2001. Dow maintains it has no responsibility for the Indian plant, which it never owned or operated. The plant is now the responsibility of the Indian state government of Madhya Pradesh.
Let's conjecture that BP is barred from operating in America, and its U.S. assets are sold to, say, a combination of Exxon Mobil and private equity firm Carlyle Group. How would it play with the people of Florida if the new owner denied all responsibility for the Deepwater blast, on the grounds that it had never owned or operated the rig asset before it blew up and sank?
Be nice to us Brits while you can. We may be clumsy in our PR, but at least we offer to pay.