BP 2014 Annual Report Download - page 54

Following the Gulf of Mexico oil spill, there have been cases of additional
oversight and more stringent regulation of BP and other companies’ oil and
gas activities in the US and elsewhere, particularly relating to
environmental, health and safety controls and oversight of drilling
operations, which could result in increased compliance costs. In addition,
we may be subjected to a higher number of citations and level of fines
imposed in relation to any alleged breaches of safety or environmental
regulations, which could result in increased costs.
Ethical misconduct and non-compliance – ethical misconduct or
breaches of applicable laws by our businesses or our employees could be
damaging to our reputation.
Incidents of ethical misconduct or non-compliance with applicable laws
and regulations, including anti-bribery and corruption and anti-fraud laws,
trade restrictions or other sanctions, or non-compliance with the
recommendations of the ethics monitor appointed under the terms of the
DoJ and EPA settlements, could damage our reputation, result in litigation,
regulatory action and penalties.
Treasury and trading activities – ineffective management of treasury
and trading activities could lead to business disruption, financial loss,
regulatory intervention or damage to our reputation.
We are subject to operational risk around our treasury and trading activities
in financial and commodity markets, some of which are regulated. Failure
to process, manage and monitor a large number of complex transactions
across many markets and currencies while complying with all regulatory
requirements could hinder profitable trading opportunities. There is a risk
that a single trader or a group of traders could act outside of our
delegations and controls, leading to regulatory intervention and resulting in
financial loss and potentially damaging our reputation. See Financial
statements – Note 27.
Reporting – failure to accurately report our data could lead to regulatory
action, legal liability and reputational damage.
External reporting of financial and non-financial data, including reserves
estimates, relies on the integrity of systems and people. Failure to report
data accurately and in compliance with applicable standards could result in
regulatory action, legal liability and damage to our reputation. For a period
of three years after the SEC settlement in December 2012, we are unable
to rely on the US safe harbor provisions regarding forward-looking
statements, which may expose us to future litigation and liabilities in
connection with our public disclosures. See Legal proceedings on
page 228.
The Strategic report was approved by the board and signed on its behalf by David J Jackson, company secretary on 3 March 2015.
BP Annual Report and Form 20-F 201450