Why BP should be nationalised

JUST HOURS after agreeing a $20 billion compensation deal with US President Obama over the oil spill, oil giant BP again had to apologise, this time for BP chairman Svanberg's claim that the $240 billion multinational cares about "the small people".

Hugh Caffrey

A US congressional hearing on 15 June heard that other oil companies "are just as unprepared to respond to a major oil spill in the Gulf [of Mexico] as BP". Far from caring about Svanberg's "small people", the entire capitalist industry cuts corners to boost profits.

The bill for Deepwater Horizon including clean-up costs, fines and further compensation could reach $49 billion. The environmental cost, meanwhile, keeps growing. Obama encouraged people who lost out from this spill, to claim part of the $20 billion compensation and announced that BP was setting up a "$100 million fund to compensate unemployed oil rig workers."

$100 million is small change to BP's bosses. Chief Executive Tony Hayward paid himself $36 million last year alone! How many oil workers will actually benefit from this fund? How will money be distributed and in what amounts?

Many 'City experts' call this a 'good deal' for BP. They feared Obama might go further as 83% of Americans "disapprove of BP's performance". The $20 billion equals two years' standard payouts (dividends) to shareholders. The estimated total cost of $49 billion is equivalent to suspending dividends for five years.

However, after suspending dividends this year, BP intends business as usual in 2011. To help pay for the clean-up, $10 billion worth of assets will be sold and $10 billion of capital spending, ie investment, will be cut.

Former Clinton government official, Robert Reich, suggested that BP's American operations should be temporarily nationalised so "Obama can ...use its expertise to stop the leak and clean up the mess as soon as possible." As Reich noted: "BP's first responsibility is to its creditors and shareholders, not the public."

The Socialist Party calls for fully and permanently nationalising BP, under democratic workers' control and management. This would allow workers' expertise to be used in the interests of society, not just to clean up after disasters.

Democratic planning

A socialist government would take BP into public ownership, replacing the board with elected representatives of oil workers and trade unions in the majority, and with the government also represented. Through democratic public planning this could safeguard employment and incomes, and move towards developing renewable energy.

Capitalists claim that "attacking BP means pensioners will suffer", as many pension fund investments depend on BP shares. This disaster shows why gambling pensions on the stock markets is madness. A publicly owned BP could repay the pension funds through its sizable profits, but a far better solution would be also to have democratic public ownership of the entire pension funds 'industry' to protect workers' savings and deliver living pensions for all.

'You can't nationalise a multinational company' scoff right-wing politicians. Socialists are internationalists; we fight for socialism worldwide, not just in one country. A socialist British government would nonetheless need to nationalise the largest 150 companies, many of which are multinationals.

It would appeal to the overseas workforce of these companies, including BP's 23,000 employees in the US, to support this. Introducing workers' democracy, guaranteeing rights and improving pay and employment terms, one socialist government would inspire workers the world over to bring in others.

In the last five years, there have been 26 deaths, 170 injuries and 760 safety violations on BP rigs. Regulation cannot make safe this dangerous capitalist industry. Socialist public ownership is required. Until then, this disaster, an environmental Hurricane Katrina, will tragically not be the last.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.

In The Socialist 23 June 2010:

Stop budget attacks with mass action