Foreign investors can take cautionary lessons from events leading up to and away from the BP Oil Spill on April 20, a renowned professor of international political economy at the Booth School of Business, University of Chicago told Xinhua in an exclusive interview on Friday.

In the interview Marvin Zonis stressed that investors had the obligation to "pay much closer attention to what companies have done in the past. Requirements are much higher for disclosure, and there is enough information out there provided by companies and many other sources."

He pointed out that"BP is notorious and has apparently been prey to unsafe practices."Among those were a fire and explosion at BP's Texas City Refinery in Texas City, Texas. Fifteen workers were killed and 170 injured. In that episode, BP was charged with violating federal environment laws and has been subject to law suits from the victims' families. The U.S. Occupational Safety and Health Administration claimed that BP had failed to implement safety improvements following the disaster and fined the company 87 million U.S. dollars.

"They have been accused again and again," Zonis said, "and each time they have pledged to improve their safety record."

Companies such as BP are subject to liability laws of the United States.

"They know they are going to be sued. BP is self-insured. It does have directors and officers insurance. So if the CEO, Tony Hayward, is found guilty of screwing up, outside insurance will pay. For all other things, the company is going to pay. The risks are large."

Flaunting liabilities also a cause for losing license to operate in the United States, Zonis said.

"There is a plenty of data on companies and their past,"Zonis said."You don't have to take that additional risk "on those violating liability laws. Furthermore, the U.S. Government has named BP as the responsible party in the incident, and officials have said the company will be held accountable for all cleanup costs resulting from the oil spill.

Zonis said the BP oil spill had turned the environment into "a central issue"facing investors.

"So much damage was done to the wetlands and Gulf from Hurricane Katrina, it has got to be clear to every company these days that in the United States the environment has become a hot button. You have to be careful."

Hurricane Katrina in 2005 was the costliest natural disaster in the United States, costing 1,836 lives, with property damage of some 81 billion dollars along the Gulf coast from central Florida to Texas, with destruction of large parts of the port city of New Orleans, where, five years later, thousands still are living in temporary housing, their homes destroyed.

The present BP oil spill disaster began with the explosion of the Deepwater Horizon drilling rig, killing 11 workers and injuring 17 others, and has proceeded to spill tens of millions of gallons of oil into the Gulf of Mexico, despite continuing efforts to contain the flow.

Government estimates are that in one month following the blast, more than twice as much oil had been released as flowed from the wreck of the Exxon Valdez, which spilled about 250,000 barrels of oil into Prince Williams Bay in Alaska in 1989.

Despite great efforts to keep the oil from flooding wetlands, it was discovered on June 1 that tar balls and oil mousse had begun to reach the shores of Mississippi, Alabama Florida.

Both BP and the U.S. Government are being accused of not providing information in a timely manner about the disaster, and this is another lesson for investors, said Zonis, how do companies handle public disclosure of a crisis?

"It is staggering that companies don't immediately come out with the information,"says Zonis."It's going to come out sooner or later. BP has very low oil reserves that it can claim as its own. A geologist, Tony Hayward, was brought in an attempt to boost reserves." The decision to drill in the Gulf was particularly open to close public attention, because of the Katrina havoc to the area. "Hayward doesn't know how to get the message out, how to speak to the press."

At Booth School of Business, Professor Emeritus Zonis teaches courses on International Political Economy, Leadership, and E- Commerce. He was the first professor at the Business School to teach a course on the effects of digital technologies on global business. He also consults to corporations and professional asset management firms throughout the world, helping them to identify, assess, and manage their political risks in the changing global environment. He was educated at Yale University, the Harvard Business School, and the Massachusetts Institute of Technology, where he received a Ph.D. in Political Science.

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