APG calls on BP to integrate safety into pay following Deepwater

APG, the Dutch asset management giant owned by the ABP civil service pension fund, is calling for BP to set up a pay system more closely tied to safety in the wake of the Deepwater Horizon oil spill in the Gulf of Mexico last year.
APG has noted the oil major has set up a new safety department and that fourth-quarter bonuses were entirely dependent on safety performance, but says the initiatives are just a “first step”.
“We have asked BP to produce a balanced remuneration system for 2011, which includes relevant safety performance indicators,” APG said.
The coming months, with numerous legal proceedings relating to the Deepwater disaster, should provide more insight into where responsibility really lies, APG reckons in its latest responsible ownership report. “This is the company’s last chance to regain its credibility as a premium brand,” APG observes.
APG most recently spoke with the company on November 23, via BP’s vice president of health safety, security and environment. APG said: “We have asked BP to build more checks and balances and top-down supervision into its operational procedures.“For example, we think BP ought to monitor measurement data on oil platforms in real time at its onshore command centres.”
In late December a group of Ohio and New York public pension funds were granted lead plaintiff status in a securities class action against BP.
The funds are the New York State Common Retirement Fund; the Ohio Public Employees Retirement System; the State Teachers Retirement System of Ohio; the School Employees Retirement System of Ohio; and the Ohio Police & Fire Pension Fund.
The suit alleges that BP “issued materially false and misleading statements” regarding the company’s safety protocols and record, as well as its ability to respond to a major oil spill – and that the funds lost a total of more than $200m.
Meanwhile, APG noted that mining firm Barrack Gold, a regular target of investor campaigns in the past, has become signatory to the Voluntary Principles on Security and Human Rights. And following another APG recommendation, the company “will shortly be appointing a director with environmental expertise to its board”.