BP Blow-out Preventer Offshore Outsourced to China

You're going to love this one. BP offshore outsourced the redesign of the blow-out preventer to China. Yes this is the very blow-out preventer that failed and caused the worst environmental disaster in U.S. history.

BP ordered the owner of the Deepwater Horizon rig, whose explosion led to the worst environmental disaster in US history, to overhaul a crucial piece of the rig's safety equipment in China, the Observer has learnt. The blow-out preventer – the last line of defence against an out-of-control well – subsequently failed to activate and is at the centre of investigations into what caused the disaster.

Experts say that the practice of having such engineering work carried out in China, rather than the US, saves money and is common in the industry.

This weekend BP remained cautiously optimistic that the cap placed on top of the Gulf of Mexico well on Thursday night would continue to hold back the torrent of oil. It is the first time the flow has been stopped since the accident happened almost three months ago. But BP said that the pressure readings from the Macondo well were not as high as it had hoped, which could indicate that it has ruptured and that oil could be leaking out somewhere else.

There is no evidence that the significant modifications to the blowout preventer (BOP), which were carried out in China in 2005, caused the equipment to fail. But industry lawyers said BP could be made liable for any mistakes that a Chinese subcontractor made carrying out the work. It would be almost impossible to secure damages in China, where international law is barely recognised.

Get that? Here is the most critical piece of technology and to save costs, BP demanded the design and manufacture be offshore outsourced to China. Not U.K. engineers or American engineers, nope, all to save a buck they went for the cheapest place possible for their redesign demands.

How many other critical designs have been offshore outsourced, displacing American engineers and exposing such critical work to labor arbitrage?

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Outsourced Chinese Manufacturing Liable on Agency Theory

If I am BP(heaven forbid!) and send the redesign and manufacture of the Blow-Out-Preventer to China, there is liability on the the theory of agency. Principals(BP) are liable for the acts of its agents.

Same way that IBM is liable for the outsourced work it does through its subsidiary in India. IBM has a separate LLC for its Indian subsidiary, unlike and US or foreign subsidiary of IBM.

You can almost hear the hooves of the horses of the plaintiff lawyer posse. Hope they bankrupt the m/fs.

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Burton Leed

liability

That's one of the things mentioned in the article...how impossible it is to sue anyone in China for liability. Nice huh.

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