Byrd Amendment Would Force Companies to Disclose Safety Info to the S.E.C. « The Washington Independent
There’s no mystery about the inspiration for this one.
Sen. Robert Byrd (D-W.Va.) yesterday introduced an amendment to the Senate financial reform bill that would force companies to disclose safety and health information to their shareholders.
The proposal is a response to the horrific April 5 explosion that killed 29 miners at a Massey mine in West Virginia, as well as the more recent deadly explosion on a BP oil rig in the Gulf of Mexico.
“Investors ought to know if a company is jeopardizing its workforce in order to maximize its profits,” Byrd in a statement. “In addition, failure to disclose these adverse safety or health conditions could have a significant financial impact on investors, especially if there is a halt in operations because a company failed in its obligation to protect its workers.”
Under Byrd’s proposal, publicly traded companies operating in high-risk environments — places like coal mines and oil rigs — would be required to submit occupational safety information to the Securities and Exchange Commission or face financial penalties. Byrd outlines the four categories of safety information the companies would have to disclose:
- Pending litigation regarding health and safety.
- Significant health or safety conditions at risky workplaces, which may cause the corporation to incur damages arising from wrongful deaths.
- Significant health or safety conditions that may impact financial conditions or operating results within the corporation.
- Trends in health and safety violations that may affect the relationship between costs and revenues of a corporation.
West Virginia’s other institutional lawmaker, Sen. Jay Rockefeller (D), is the lead co-sponsor of Byrd’s proposal. A separate but similar Rockefeller amendment, which would apply the new safety disclosure rules only to mining companies, has Byrd as the lead co-sponsor.
Shareholders might just appreciate the new disclosure. Massey’s stock, which stood at $54.80 the day of the mining explosion, closed at $33.47 yesterday. BP, meanwhile, has seen its stock price plummet from nearly $61 the day of the rig accident to below $50 at the close of trading yesterday.
Then again, maybe stock owners wouldn’t appreciate the disclosure at all. One of the most remarkable stories to follow the recent energy industry disasters was the one indicating how quickly the companies acted to convince shareholders that their investments were safe. Massey, in the midst of being attacked for putting increased production above worker safety, even announced that it would compensate for lost production at the Upper Big Branch mine by — you guessed it — increasing production at other mines. And that was before all the miners were even known to be dead.
The message inherent in that announcement was clear: Investors would care more about the fate of the company’s value than the fate of the missing miners.
In this sense, the Massey and BP tragedies are as much condemnations of Wall Street culture as they are the companies themselves. And that’s not going to change any time soon.