Safety versus the bottom line
Whistleblowers allege that inspection reports have been falsified and only luck has prevented a pipeline spill


The Guardian, Monday July 12, 1999

Michael Sean Gillard, Andrew Rowell and Melissa Jones

Snaking its way south for 800 miles, the Trans Alaska pipeline stands stark against the unforgiving terrain, suspended on stilts above the tundra. Crossing mountains, plains, seismic faults, and rivers, and sometimes burrowing beneath the frozen earth, the pipeline is the umbilical cord for Alaska's oil industry.

From the North Slope fields to the sprawling Valdez Marine terminal, it takes nearly five days for crude to reach the tankers which dock almost daily at Prince William Sound. The ecosystems and desolate wildlife refuges criss-crossed by the pipeline are home to moose, wolves, polar bears, and grizzlies. Bald eagles soar above migrating caribou.

For the communities living in the pipeline corridor and near remote pumping stations, the steel outline and steady rumble are a shimmering reminder this cash cow delivers 80% of Alaska's revenue. The pipeline and terminals are operated by a company called Alyeska, a native word for mainland, that is a consortium of five international oil companies.

The recently merged BP Amoco controls just over 50% of Alyeska but by the millennium it hopes to have 72%. Last April Fool's Day it was announced by BP, Britain's number one company, that it intended merging with Arco, an American giant rich from 30 years of North Slope oil exploitation. The plan would give BP 74% control of North Slope, as well as Arco's share of Alyeska. The champagne is still on ice, however, as the merger awaits European Union approval and the outcome of anti-trust investigations in Washington and Alaska, where one congressman raised the spectre of a "neo colonial state".

Lip service

There was, though, some cause for low key celebration, as Alyeska president Bob Malone - a BP executive, like his two predecessors - managed to get its vulnerable owners through the 10th anniversary of the Exxon Valdez disaster without incident. But while he treated the media to tales of state-of-the-art equipment, lessons learned, environmental rejuvenation, and transparency, in remote parts of his operation a group of senior employees wrote of impending disaster and prepared evidence of falsified inspection reports, a culture of intimidation, and "lip service" to safety. The whistleblowers spoke separately to the Guardian, saying their motivation was the safety of the pipeline, its workers, and the Alaskan environment.

When they raised these issues, management gave assurances their concerns would be addressed, but the whistleblowers are unconvinced. "It's more dangerous now than it ever was, because Alyeska is being run by spin-doctors," said one. "I am just so surprised when they [Alyeska] go another day, week, month without an accident," said another. A third source believes the next disaster could be worse than Exxon Valdez, because human life could be lost. "It's not a matter of if it is going to happen, it's when it is going to happen," he said.

Collectively, the whistleblowers describe a life-threatening "gamble" by Alyeska with the people of Alaska and its fragile environment. A battle between safety and the bottom line - one where executives and their contractors, concerned about budgets and bonuses, actively undermine and intimidate technicians and inspectors given the task of upholding safety. This, despite the public promises reiterated 10 years after Valdez.

In 1993, when a group of senior inspectors blew the whistle, there followed explosive Congressional hearings in Washington. Alyeska's major owners (BP, Arco, Exxon and Mobil) were heavily criticised. The committee chairman, Democrat John Dingell, reminded the companies of Alesyka's record of "harassment and intimidation of inspectors, including deaths threats"and feared "mismanagement, misbehaviour, and perhaps worse". A battered Alyeska was forced to comply with a massive audit repair programme for "major problems" its executives eventually admitted existed.

Six years later, however, many "imminent threats" identified in that 1993 report have not been addressed, say these new whistleblowers. They accuse Alyeska of adopting the language of change while continuing with cost and corner cutting, intimidation and blacklists.

Certainly, to speak out remains high risk, as shown by a senior engineering designer, Jeannie Sayre. Last month the US Department of Labor upheld her complaint of continued "unlawful harassment" by Alyeska and a subcontractor. Ms Sayre worked in a remote pump station, and claimed she was sacked for reporting safety compliance failures on the pipeline's fire protection. Although she was subsequently reinstated, her lawyers described Mr Malone's "Open Business Environment" - an attempt to encourage internal reporting - as mere "smoke and mirrors". A former inspector at the Valdez terminal is pursuing a similar case.

Criminal investigation

In a separate incident, BP remains under criminal investigation by the US Justice Department, which last year imposed a $3m fine on one of its drilling contractors whose employees dumped toxic waste at night on the North Slope over an 18 month period. Since the first claims in 1995 by a whistleblower working for the BP contractor, this on-going investigation has also discovered falsification of dumping records by the contractor, and considered whether BP was aware of the illegal operation - which it denies it was. The whistleblower later won his case against the contractor for intimidation, including death threats from co-workers.

Under government pressure, Alyeska set up an Employees Concern Program in 1995 for workers to report problems confidentially. In 1997 it was discovered that an Alyeska lawyer had ordered a covert probe to download from the program's computer files containing whistleblower names and allegations. It was no surprise therefore that the whistleblowers went to Chuck Hamel, an oil broker turned campaigner who received a reported $5m settlement for being targeted in 1990 by an illegal spy operation authorised by senior Alyeska management. A security company, Wackenhut, tried and uncover Mr Hamel's sources inside Alyeska. Operatives stole his mail and rubbish, and used electronic eavesdropping. A Democrat congressman being fed information by him was also targeted. In Britain, Wackenhut runs three prisons and the Gatwick immigration detention centre.

Whereas the Valdez spill was offshore, the six whistleblowers fear the next disaster will occur on the pipeline or at the terminal - in particular, the tanker vapour recovery system, which collects volatile gases from tankers as they manually load crude oil at the terminal. The group also describes an ageing, leaky pipeline. "I don't want to be associated with a situation where we spill oil all over the tundra, or somebody gets seriously injured. It is not what [Alyeska] promised we would do," said one whistleblower. The group provided the Guardian with evidence of compliance failures, illegalities, and mismanagement:


'Close to disaster'

Concerns about the recovery system have also been voiced by US government regulators. Last March Alyeska was fined by the Office of Pipeline Safety for code violations. And in April, Dan Lawn, the local government regulator, called for the system to be "shut down". He wrote: "I believe we have come close [to a disaster], at least twice, in the last two or three months." A government report seen by the Guardian shows that for the first nine months valves to shut down the system in an emergency were not qualified as safe. The system is now under management review by Alyeska, which says "safety is our No1 concern". But the whistleblowers want an independent government auditor from Washington to receive their evidence.

BP Amoco's chief executive, Sir John Browne, and three US congressmen must now decide whether to intervene and send independent auditors to Alaska. Last night there was no one at BP Amoco available to comment. Sir John has spent two years repositioning BP as the leading "green" oil company. This scandal threatens to drag the BP chief back to a dark past. "I think [BP] do an excellent job of talking about how they're concerned about global warming and the environment," said Stan Stephens, the former president of the main Alaskan citizens' oil industry watchdog. "But, you can't just take out a big advert, and make speeches saying one thing and do another."

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Michael Sean Gillard, Andrew Rowell and Melissa Jones





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