BP has much to gain from keeping the peace
Wednesday 20 August 1997
The lawyers are of course right to insist that Greenpeace should be sued, as is BP's chief executive, John Browne, who presumably took the decision. Greenpeace has probably broken the law by causing criminal damage in this way. But since when did being right have anything to do with the shifting sands of public opinion? This is not a battle BP can hope to win. Public opinion may not be so whole-heartedly behind Greenpeace as it was post the Brent Spar fiasco - but Greenpeace is still a potent force with which many people sympathise.
BP should not have adopted such a confrontational approach in the first place. Its best hope now is to find a way of backing off with honour - say by promising to drop the action in return for an undertaking from Greenpeace not to invade its platforms again.
Let's take the argument in stages. Comparison is being made with McDonald's marathon libel case, which ended in an entirely pyrrhic victory for the company. This was a case McDonald's couldn't possibly win, despite the ludicrous nature of many of the allegations made against it. Public support would always be for the little man. The BP case is a very different one. The McDonald's case was about defamation. To BP's credit, it has always taken the view that people can say what they like about the company provided they don't accuse it of corruption. No, this case is about unlawful interference with what the company is doing. BP, then, would appear to be on much firmer ground than McDonald's.
That doesn't make its position much better in the eyes of many, however, for in this day and age, people tend to think that multinationals, and particularly big oil companies, are fair game. Oil companies apply different rules when operating in developing countries. Why not give them a dose of their own medicine back home, the argument runs.
When push comes to shove, most people will support the rule of law. For some reason there tends to be a blind spot with oil companies. In their case the invasion of property rights seems to be regarded as perfectly okay. Lamentable though this attitude might seem, it is a fact of life. BP is likely to do itself infinitely more damage by suing Greenpeace than the pounds 1.4m in compensation it hopes to recover.
Until BP sued, few news organisations were taking much notice of Greenpeace's actions west of Shetlands. The oil companies might justifiably have begun to believe that Greenpeace was a spent force, at least in its targeting of their activities. Now it's all front page news again. It is BP, not Greenpeace, that has made it so. It is easy to understand why chief executives should get all hot under the collar and jump on their high horses about this sort of thing. More often than not, however, the best policy is just to grin and bear it. At best BP has made an error judgement in suing Greenpeace.
The City gives Iverson six months
Ann Iverson, the flame-haired chief executive of Laura Ashley, was recently photographed in Vogue magazine wearing little more than a black leather coat. "This is what those City boys dream of seeing me in," she purred. "So I might as well live up to expectations."
Sadly for the by no means unattractive American, she is probably flattering herself. Sack cloth and ashes is what the City boys reckon Ms Iverson should be wearing this season. And as for living up to expectations, Laura Ashley's shareholders might have a thing or two to say on that one.
Yesterday's profits warning was not exactly unexpected, but for all that it still managed to surprise. On top of margin pressures as the company tries to end its reputation as a mark-down masochist, there are problems in America and even a slowdown in home furnishings, just when everyone else in that sector seems to be coining it.
The American difficulties must be particularly galling. Ms Iverson has staked her strategy on the great opportunities there. Now we have prices being cut by 75 per cent and the much vaunted roll-out of larger stores brought to a dramatic halt.
Perhaps she has been unlucky, perhaps the City got too carried away and there were some unrealistic expectations out there. Unfortunately, there has also been a host of mistakes - in buying and in systems to name just two. And a long list of directors have come and gone, including some of Ms Iverson's hand-picked lieutenants.
In the longer term the business may need to achieve more focus. Joint ventures and franchise agreements must be on the cards. Dropping childrenswear must be another possibility. The City boys are giving Ms Iverson six months to start some sort of turnaround. After that the knives will be out. Meanwhile, Ms Iveson's pounds 1m-a-year salary seems to be a thing of the past. With no bonuses, she'll have to rub along on a piffling basic of pounds 450,000. Poor dear.
Holding the line is costly for Hong Kong
The Hong Kong authorities' struggle to maintain their dollar's peg to the US greenback looks horribly familiar five years after our own failed attempt to tie ourselves to a stronger currency. Having savaged easier prey from Bangkok to Jakarta, the speculators have moved in on the former colony with a vengeance and the cost of resisting their selling is in danger of crippling the stock and property markets.
In the past three trading days in Hong Kong, the Hang Seng index has fallen by more than 1,000 points, wiping more than 6.5 per cent from the value of the equity market. There is a real danger the present bout of nerves will turn to panic now that this last safe haven from the currency storms elsewhere in South-east Asia has been exposed.
Hong Kong still looks very different from its overblown neighbours where unsustainable growth rates and economic machismo on a grand scale have resulted in the mother of all property booms and busts. But a sound underlying economy and seamless transfer to China have provided little support from the circling vultures.
A battle royal between the deep pockets of Hong Kong's authorities and the only slightly less powerful force of the American speculative funds is brewing, with interbank rates above 10 per cent in a desperate bid to keep the currency close to its official rate against the dollar.
So soon after the handover there will be enormous pressure not to abandon the link, but the cost of holding the line is squeezing the pips uncomfortably.
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