The Seattle Times points out how companies can put pressure on auditors to sugar-coat their findings:

Warnings by a Seattle-based engineering firm about problems with BP’s monitoring of its Alaska oil pipelines were significantly toned down after the company complained that the report was “extremely negative,” according to documents now under review by a federal grand jury.

The draft report by Coffman Engineers, published in November 2001, raised concerns about the way BP was tracking and reporting Prudhoe Bay pipeline corrosion, which this year resulted in oil spills and forced a partial shutdown of those fields.

Although Coffman will have to explain why they toned down a report, the lion’s share of blame should still remain on BP for failing to take reasonable measures (smart pig and coupon) to detect areas of corrosion and prevent a spill:

In the aftermath of last March’s spill, BP acknowledged that the transit lines in western Prudhoe Bay had gone without a smart-pig inspection since 1998, and it has been scrambling to make those inspections.

BP officials say workers have frequently pigged many other lines at Prudhoe Bay. But the transit lines appeared to be at low risk of corrosion compared with other lines that handled saltwater, gas and oil, and they say they thought monitoring efforts without pigging were adequate.

Ok, so that lays the backdrop to a company that manages blind. They thought efforts without pigging were adequate, but based on what data? A lack of pigging and no coupons meant they had no facts upon which to make this risk calculation. Reminds me of a VP I once worked with who told me that anti-virus software was not necessary on his Microsoft Windows computers because they had no viruses. “How do you know?” I kept asking him…when I finally convinced him to let me audit the systems we found literally tens of thousands of infections and spent months cleaning up the environment. So I know exactly what Coffman was facing when BP apparently insisted that negative comments be downplayed in favor of positive ones:

In a memo sent to Coffman and the Alaska Department of Environmental Conservation, BP said the reviewers lacked balance and stressed problems rather than accomplishments.

Balance? A reviewer’s job is to review the situation and give an honest report. Thus, a good report by a experienced professional would be a result of the actual conditions and not the bias of the reporter. It seems clear that BP was taking a big risk but wanted to believe, against the advice of experts, that there was no risk at all. Perhaps they had other motives or another data set, but the fact that they told their auditor to be more positive and tone down their warnings shows a style of management that usually leads to predictible disasters.