Ever seen a company name like “Acme Industrial LLC”? The LLC means “Limited Liability Company.” Per the arbiter of all definitions online, Wikipedia: “The primary characteristic an LLC shares with a corporation is limited liability…” and if you follow up on the definition of “limited liability” you find that this is “a concept whereby a person’s financial liability is limited to a fixed sum” regardless of the obligations incurred by the corporation of which they are an officer or shareholder.
When you see “Ltd” after the name of a corporation it means much the same thing: it’s a “Limited Liability Business Organisation.” “In a corporation [...] stockholders, directors and officers typically are not liable for their company’s debts and obligations. They are limited in liability to the amount they have invested in the corporation (eg: If $100 in stock was purchased, no more than $100 can be lost).” (footnote). And lately we’ve seen another expression of the limitation of liability (text at R of photo is a quote):
Under federal law, compensation must be provided to local and state governments, businesses and residents who have been affected by this [the Deepwater Horizon] disaster, *but these damages are capped at only $75 million*.[emphasis mine]
Additionally, Transocean, which actually owned the Deepwater Horizon rig, has claimed that its liability is limited to just $27 million under the Limitation of Liability Act, passed 160 years ago. Under the law, a vessel owner can limit its liability to the value of the vessel and its freight. But this law was passed well before insurance companies began offering coverage to ocean vessels, and the drilling giant has already received a payout of $400 million from its insurance provider. By allowing this claim, Transocean could actually end up profiting from the spill.
[photo credit w/many thanks to Russ Nicholson who snapped this wonderfully appropriate sign at a BP gas station]
OK, this is all fairly sleazy. But what has been coming into focus for me is a more general problem: this whole concept of limited liability. It is troubling me deeply. I hope it will start troubling a lot more people deeply. This is a crosspost from a thread on the BP catastrophe over at European Tribune. The thread discusses the various contributions of incompetence, greed, and corruption to the Deepwater Horizon disaster: the utter co-optation of the MMS (allegedly the watchdog and enforcer or rules), the company’s apparent contempt for industry-standard practises and (even weak) regulations, etc.
I’m thinking that a fundamental principle emerges here. Dangerous technologies — very dangerous technologies, in fact, WMD by any other name — should not be deployed in regions with corrupt and unstable governance. Unfortunately, there is no country on earth where we can really guarantee that government will remain incorruptible and stable.
F’rexample, the US is just one big company town at present: politicians bought and paid for, two-party oligopoly fully in place, regulatory agencies staffed by apparatchiks and ready to crucify or at least marginalise any whistleblower who dares to mention feral facts. Deploying WMD-scale technologies in such an environment is like handing an Uzi to a severely disturbed adolescent with a history of poor impulse control, bullying, and tantrums — and a sweet tooth such that he can be bribed to do anything with just a couple of chocolate chip cookies. (After all, the cost of the “safety cap” that BP didn’t install was what, half a million bucks? chump change to BP, but could they resist that little extra sugary money-hit?)
Much like Captain Renault in Casablanca, the White House is suddenly shocked, shocked to find that oil rigs can explode, destroying ecosystems and livelihoods. The Obama administration has backed away from its offshore oil expansion policy in the wake of the Deepwater Horizon catastrophe as the long-term environmental and economical consequences unfold in the Gulf States. Headlines are clamoring for the criminal investigations of BP, TransOcean, Halliburton and ultimately, the federal regulator, Mineral Management Services (MMS). Rather paradoxically, President Obama is using the oil spill to call for more nuclear power.
Yet, with the exception of a handful of insightful political cartoonists, the obvious parallel between the regulatory delinquency of MMS and that of its nuclear equivalent – the Nuclear Regulatory Commission (NRC) – and the potential for an equally catastrophic accident in the nuclear sector, has not been drawn. As with the MMS debacle, the NRC is gambling with inevitable disaster with the same spin of the wheel of misfortune and with potentially even higher stakes.
Investigations have already revealed that MMS had become too friendly and compliant toward the industry it was supposed to regulate. This hands-off approach proved to be a formula for inevitable disaster. Similarly, the NRC consistently puts the financial motives of the nuclear industry it is supposed to regulate ahead of public safety. In instance after instance, the NRC has chosen not to enforce its own regulations even in the face of repeated reactor safety violations, risking a serious reactor accident while leaving often high-risk safety problems to linger unresolved for decades.
The NRC acknowledges that the greatest hazard to a reactor comes from fire. Yet not one of the 104 currently operating reactors is in full compliance with critical federal fire safety regulations. The NRC has known this since 1992 when the majority of U.S. nuclear plants were found to have installed bogus fire barriers prone to fail in a significant fire. Rather than take prompt action, the NRC spent six years discussing the problem with industry, then issued corrective orders which it later discovered the industry had ignored, substituting them instead with less costly, unapproved and illegal measures [...] footnote
(read on for more depressing and familiar history typical of the corporate-friendly “regulatory” sham prevailing in N America — dysfunctioning merrily everywhere from phood to pharma to phuel and beyond)
I am starting to think of wind, solar, tidal etc as Appropriately Pessimistic Technologies, i.e. technologies that do not turn into WMD if they fall into the hands of incompetent and corrupt operators. I figure: assume the Mafia will end up running everything. Assume that the inbred, clueless aristos of the court of the Sun King get appointed to all the plummy jobs. Assume that all the directorships get handed out according to bribery and machine politics. Assume that GWB is not an isolated instance. (I mean, just listen to the BP talking heads. They can’t even come up with plausible lies.)
These people should not, repeat not, be allowed to run with scissors. They can’t do too much harm with a wind generator or a solar-Stirling tower; the worst it can do is fall over and hurt a few people, maybe destroy a building or two. But jeez, give them a coal fired plant to run, or 9 billion (yes, with a B) gallons of slurry “safely” contained on a steep hillside… and all of a sudden we have to trust them — a lot.
Webb’s concerns are not unfounded. Ten years ago, millions of gallons of toxic coal sludge broke through a similar impoundment at another Massey operation in eastern Kentucky. The worst environmental catastrophe in the US until the TVA coal ash pond disaster, the Martin County spill at the Massey site dumped over 300 million tons of toxic sludge into 100 miles of streams, contaminating the water supplies for 27,000 people, and wiping out 1.6. million fish.
Ever notice how “the worst environmental catastrophe” awards are getting closer and closer together in time? and how, like family size and longevity, the consequences of the last N “worst” disasters are still being felt even as the next N “new worst” disasters occur? The Exxon Valdez incident is now “so yesterday,” yet the bioregion we pissed all over on that occasion still hasn’t recovered.
Kinda like the increasing train wreck incidence in the life of an addict going rapidly downhill: the new low in “stupidest most self destructive thing I ever did” starts to happen yearly, then monthly, then…
So in light of all this (not to mention most of the rest of human history) I am considering this new theory of appropriate technology. Appropriate technology is by definition technology that will not have biome-destroying, life-altering, long-term-disastrous-consequences results even if/when applied and administered by slovens, chancers, moral cowards, bandits, etc. Any technology that absolutely requires people of the highest principle, discipline and intelligence to keep it from wreaking havoc and mass destruction is, well… Doomed(TM). ‘Cos humans are neither robots nor angels — even if one generation of us is relatively upright, responsible and sober, we can’t guarantee that our kids won’t be fops, wastrels, gamblers and drunkards. Giving them a collection of Uzis for their 18th birthday doesn’t sound like such a great idea to me.
Now I’m going to add another meme to the toolbox for conceptualising this kind of event: Slow Violence.
We are now witnessing in the Gulf of Mexico slow violence. Writer Rob Nixon coined the phrase, which he acknowledges as seemingly oxymoronic, to describe acts whose “lethal repercussions sprawl across space and time.”
Would anyone argue that the exploits of oil professionals in the Gulf haven’t caused deadly outcomes that continue to sprawl spatially and temporally? If the implications of the words Nixon uses to help us understand his concept were not utterly devastating, I’d relish their richness: “attritional calamities” with “deferred consequences and casualties;” “dispersed repercussions” that “pose formidable imaginative difficulties.” The explosion, fire, and sinking of the Deepwater Horizon was a small spectacle and only the initial phase of a protracted series of events with severe ramifications.
Slow Violence — distributed widely, with delayed and diffuse injuries — is a form of harm and risk that our ideas of justice have a hard time dealing with. It is not the identifiable individual fist in the identifiable individual face, with witnesses. It is in fact an eminently deniable violence, and hence very attractive to those who want to reap unreasonable profits by injuring others, yet duck the risks and consequences of banditry (accountability, loss of reputation, possibly reprisals or punishment).
Environmental crime is slow violence. The consequences can endure for generations — in some cases for centuries. The deployment of DU munitions in the Balkans and Iraq was slow violence. [Landmines are a shorter-term, half-way version of slow violence: they have delayed consequences but they are still visible and attributable to their source by the victims, even if the aggressor has "moved on" and is now thinking about more important things like the Olympics or the latest celebrity divorce.]
Anyway, we have difficulty understanding slow violence, genuine difficulty assessing it (it took almost 25 years of epidemiological and actuarial data collection and analysis to produce the most recent estimate of the true cost of the Chernobyl event in premature mortality). Not only does each act of slow violence have multigenerational impact, but the process of measuring and understanding the impact is likewise delayed, and thus (this is important) so is the attribution of responsibility.
How can a “limited liability” corporation be permitted to engage in activities which, if they go wrong, can have nearly-incalculable multigenerational costs — costs whose assessment, if even feasible, may take longer than the remaining lifetimes of those responsible? Engaging in high stakes gambling with other people’s lives (decades’ worth of their lives) should carry high stakes for the gambler as well — not “limited liability”. One strike, you’re toast. If CEOs knew that one major disaster would spell the end of their company, the end of their careers, they might be much more cautious about cutting corners to minimise chump-change expenses. With risible liability caps and the equivalent of extraterritoriality or dip immunity for all corporate pseudo-persons, what we have established is a grotesque game of “moral hazard” in which suicidally (or murderously) risky behaviour is encouraged and rewarded.
If more caution were exercised, we’d all have to pay more for certain amenities and commodities whose production involves high-stakes gambling with the lives and fortunes of thousands or millions of innocent bystanders. But, ummm… isn’t that how it should be?