Punch line: Washington’s shakedown of BP may cause other multinationals to flee to a more hospitable haven: Canada.
Side note: I’ve often said that the discarding of established bankruptcy / contract law to pay off the UAW before GM’s secured creditors was a defining moment for US commerce. So, the BP action shouldn’t have surprised anyone.
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Excerpted from The Globe: The great drain, August 26, 2010
Assume you are a big-name international resource producer, maybe an oil company.
From the following selection, choose two countries where you would most want to operate: Canada, United States, Russia, Venezuela, Bolivia and Ecuador.
That’s easy.
You’d pick the first two, because the others have had scant regard for the rule of law.
At one point or another, each has been accused of expropriation or other acts of aggression toward foreign investors.
Since you are accountable to your shareholders, you strike those countries off your list.
Today, however, you might want to strike the United States off the list, too.
The response of the Obama White House and Congress to the BP oil leak in the Gulf of Mexico is sure to have foreign investors trembling.
As the damage claims roll in like a hurricane, BP has become the world’s biggest ATM.
BP never expected to pay the ultimate price for the sub-sea blowout.
That’s because of the 1990 Oil Pollution Act placed a $75-million liability cap on monetary damages payable to public and private
parties (except where negligence was proven).
In BP’s case, that cap was quickly deemed null and void.
In short, the U.S. government dictated financial responsibility in a politically driven way well before blame for the leak had been determined in a court of law.
BP’s now massive liability may downgrade the world’s view that the United States is an investment haven.
America’s loss could be Canada’s gain.
Full article:
http://www.theglobeandmail.com/report-on-business/rob-magazine/the-great-drain/article1683458/
Thanks to JWC for feeding the lead
The Homa Files 
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