BP Company and Deep Horizon Oil Spillage Accident - Case Study Example

Individual Essay-Question 1 Name: Course: Tutor: Institution: Date: Introduction The Deep water Horizon spill represents an international oil industry accident of all times in the industry history. In this case, the spillage that claimed the lives of eleven workers and approximately 115 injured employees had more that the visible direct implications. The increased oil spills in the Mexican Gulf lead to environmental implications on the aquatic life as well as the neighbouring communities relying on the beaches and ocean shores to earn a living. Despite the drastic efforts by the organization to mitigate against these challenges, the implications of the April 20, 2010 accident are evident to date. In this case, this essay seeks to evaluate this tragedy evaluating its occurrence and subsequent events. In this regard, the essay analysis on the key responsible parties, stakeholders who accepted liabilities, as well as those who paid huge costs as a result of the spillage. Responsible Parties The BP Management and Partners The incidents surrounding the oil spillage and the eventual disaster engulfing the Gulf of Mexico has its links onto the organisational management failures. In this case, the BP management received increased criticisms following the spillage. One among them was undue influence on the scientists’ research on the drilling possibilities in Mexico. Prior to authorization to drill oil in the region, the organization was mandated with the responsibility of conducting a feasibility study to establish the nature of drilling possibilities, associated risks and proactive measures that would be instituted to address such established risks as and when they occur. In this regard, the feasibility study done by a group of expert scientists received a lump sum $500 million as research funds. In this case, the organization pledged independence of the exercise and that it would not interfere with the research of the established findings whatsoever. However, as the Guardian Newspaper article on BP Oil Spill (2014) reported after the oil spillage incidence this was a promise never fulfilled. Investigations into the oil spillage incidence established that the organizational management unduly influenced the scientists reach. As such, the conclusions drawn on the increased possibility for successful drilling and the reported minimal and manageable risks on the process were inaccurate. Basing on the knowledge aspect of power, it is apparent that the BP Company management had prior knowledge of the risks associated with the deep horizon drilling adventure. However, this information was held privy to the management denying the workforce and the global environmental preservation groups an opportunity to evaluate the risks and develop rational decisions. In this case, with knowledge of the impending risks, the organizational management presented inaccurate research findings in order to acquire a drilling license in the deep horizon, which raises the question of ethics in management and the role of management to retain an honest approach in business ventures. In addition, the organisational management denied its own site engineers such privy information. In the wake of the disaster, the organisational CEO was alarmed on the challenges and the eminent challenges facing the deep water horizon drilling enterprise. However, as Vaughn (2012, p.167) reports, the CEO and the top officials in the organization neither approved for an evacuation and dissertation of the areas nor informed the governing board on time. Therefore, the management cannot only be blame d for the loss strategically, but also for the loss of the lives and injuries units site engineers and other workers. Had the management responded on time and allow for evacuation and other emergency measures as the policies provide, the extent of human injuries and subsequent deaths would have been considerably reduced. In this situation, the management and its drilling partner Halliburton had knowledge power of which it never applied or used accordingly. The Government According to Susan Strange’s power model, the author argued that in the international political environment, the international governing bodies and the respective national governments have the security power. In this regard, the security power holds that such responsible authorities are charged with the responsibility of ensuring security and safety of not only the citizens but the global environment at large. Therefore, such agencies and institutions are charged with the responsibility of ensuring conformance to safety and security regulations in the market to allow for proactive measures in security and safety enhancement. Such authorities are expected to conduct feasibility and inspection evaluations on business projects to evaluate their implications on the society and the environment respectively. However, in the case of the deep water horizon oil spillage accident it is apparent that these institutions had failed in their performance. On one hand, the USA government, in a bid to increase sea oil drilling subsidized the costs in such operations, allowing for increased interests in the venture. On the other hand, the regulatory commission relied on the feasibility study funded and presented by the organization to validate and license oil drilling in the area. In this case, such presented information was bound to be biased based on the conflict of interest aspect. The BP Company had drilling interests in the region. As such, it was imperative for the commission to establish and conduct an independent feasibility study on risks and possibility of oil drilling in the deep horizon. However, as it emerged later on, the commission lacked enough funding for such an expensive venture. In this case, the commission not only lacked the required funding, but also the required expertise to conduct such a study. Consequently, as a study by Osofsky (2011, p.1079) established, the government resolved to rely on the BP Company ethical policy of not interfering with the research process. In this regard, the government failed to exercise its power that comes with protection responsibility. With such a huge project with expected numerous returns, but also increased risks, the UK and the US governments should have funded independent feasibility studies. Therefore, the accident occurrence and the subsequent environmental pollution, injuries and loss of lives cab are blamed on the failure by the USA and UK governments to protect and utilize their finance power obligations prior to licensing the endeavour. Senior Site Engineers Under labour management and regulations, supervisors have absolute control over their teams. In this case, the teams adhere to the directives given by their respective supervisors. As such, the supervisors act as a link between the team members and the organisational management and any interested stakeholders. However, the supervisors have an obligation to liability on the employees’ safety and wellbeing. Therefore, the supervisors under any organisational project ensure their teams’ safety and security. As such, they are charged with indentifying security and safety risks both internal and external and instituting proactive measures respectively. Thus, any arising safety and security risks at the attention of the organisational project supervisors should be addressed decisively. In this case, the supervisors have the production and security powers. On one hand, the supervisors are the direct managers on the project production processes. Therefore, upon the establishment of security and safety risks to the employees based on the production processes used, they are mandated to halt the process and accordingly advice the senior organisational management awaiting executive directives. Moreover, such individuals are charged with the responsibility of accordingly informing and advising the employees on such risks. However, an evaluation on the BP oil spillage accident reveals that the supervisors failed to conform to these requirements. In this case, the supervisors, upon establishing the early signs of the spillage possibility and the eventual explosion informed the senior management. The site engineers argued that the increased cost cutting strategies adopted by the management resulted to reduced equipment quality compromise that risked the process success (Freudenburg and Gramling, 2011, p.10). However, they failed to halt the project and effectively implemented the project with the defective low quality supplies offered, although they were accordingly aware of the impending challenges. In addition, the process supervisors failed to accordingly inform the site employees of the impending risks. They maintained silence and retained such information privy in what was latter reported as an effort to retain calm on the site. However, although they had an obligation to ensure calm on the site, they had a security obligation to the employees to share such knowledge at their disposal. Parties that Accepted Liability The BP Company Following the oil spillage, the USA government in connection with the UK government as well as international environmental bodies embarked on a process to establish the causes of the oil spillage. In these investigations, one apparent party was held liable, the BP Company. In this case, the investigations argued that the accident was a result of consistent failures and negligence by the company. To these accounts, the BP Company pleaded guilty. As such, the USA federal courts meted a series of judgments on the company on both criminal and civil accounts. On one hand, under criminal accounts, the organization was charged with eleven accounts of man slaughter. This was as a result of the eleven deaths emanating from the accident. In this case, the courts argued that the Company management had within its powers to stop the occurrence of these deaths through appropriate proactive inspection procedures. Therefore, the organization was held responsible and consequently pleaded guilty to these accounts. In addition, the BP Company was placed under the USA government observance program for a period of four years. In this case, the government was in this period to observe the organisational level and willingness to the observance of safety and ethical issues and obligations to both its internal and external stakeholders. This was in pursuance to the revelation that the organization has unethically influenced the feasibility study findings and also compromised on its operations safety at the verge of reducing operational costs. To this requirement the organization obligated and submitted its existing projects portfolios and inspection as well as evaluation documents to the USA government investigators for scrutiny and conformance verification (Barret, 2014). Finally, the organization owned up to its role in the process by receiving a temporary ban from any new contractual engagements with the USA government until cleared as conforming to the required regulations. T all these accounts, the organization pleaded guilty and offered to compensate for damages on the filed civil cases. Moreover, the organization offered a public apology for its negligence and subsequent causing of the accident. The Government In an investigative report funded by the White House after the BP oil spillage accident, the government was held liable to the occurrence of the accident. In this case, the USA government accepted the fact that the economy lacked appropriate and enough regulatory policies to govern the oil industry. In this regard, the USA government acknowledged the fact that unless proper regulations were instituted, a repeat of the accident was foreseeable in the future. Consequently, in acceptance to this failure, the government offered to develop legislative policies to govern the industry. As such, the State House established an investigation committee to evaluate and establish viable regulation options for adoption by the USA legislative organs (Fisk and Calkins, 2013). Parties who Bore the Costs Aquatic Life Despite the acceptance of responsibility by both the BP Company and the USA government, the implications of the spillage continue to haunt the society and the environment up to date. Among the most implicated areas is the Aquatic life. In this case, increased aquatic life deaths serve as the costs of the oil spillage. Moss (2014) conducted a study to evaluate the implications of the oil spillage on the aquatic life. In this case, the study based its hypothesis on the argument that the aquatic life faced numerous challenges as a result of the spillage. In this regard, the evaluation relied on scientific data developed by independent scientists on the environmental costs of the spillage. As such, the study evaluated data lasting for four years between 2010, occurrence of the accident and 2014, and the time of study review. In its analysis, it established that a similarity emerged in all the research findings. In this case, the findings established that aquatic life was under threat and increased death. For instance, in one of the establishment, it was recorder that a total of excess of 1000 Brown Pelicans had been caught along the coast since the spillage of which half are since dead for the oil spillage related complications. Moreover, an additional study revealed that among the most endangered species after the spill included the Bottlenose Dolphins and Sea Turtles, whose death rates had considerably increased. BP Shareholders An additional group that incurred the additional costs of the oil spillage is the BP Company shareholders. Profitable organisational ventures in an economy are geared towards establishing profit margins to the economy. In this regard, the organizations strategic aim is to develop increased return on investment for the shareholders. As such, the respective organizations are charged with the responsibility of maxi=missing returns and investment on capital for the shareholders. In this case, organizations are required to minimize unnecessary expenditures that implicate and reduce the overall organisational gains. Therefore, the BP Company failed its shareholders. On one hand, the organization was temporarily denied USA government contracts. Consequently, this reduced the organisational ability to increase its revenues and favourable compete with its industry competitors such as Shell. In this regard, this offered the competitors a market competitive edge. In addition, the organization lost its public loyalty and trust. Consequently, as evidenced in the shares price drop, a majority of the investors sought to withdraw their investments form the organization (Steffy, 2011, p.69). As a result there was increased stocks supply over the demand, resulting to reduced organizational stock prices. Moreover, the cost of meeting the civil cases obligations was made at the expenses of the shareholders profitability returns. Therefore, from the BP management agency theory conformance failure, the organisational shareholders incurred huge costs as a result of the deep horizon oil spillage accident. Organisational Project Engineer At an individual level, the courts sought to identify and punish the respective responsible parties in the BP management. In this case, the courts acknowledged that although the management was responsible for the accident at a corporate level, there were key individual failures and negligence whose avoidance would have necessitated increased safety conditions and even an aversion of the disaster. Therefore, based on this understanding, the courts probed and judged the BP engineer Karl Mix. In his case, the Engineer was among four others under investigation for the possible direct contribution into the accident. However, his case was unique in that the Engineer was alleged to have deleted crucial text and voice mail messages from the site supervisor and contractor. As the Guardian article on the 18th December 2013 reveals, the court established that the accused had on April 3 2010 reported on a text message to the site supervisor that 630,000 oil gallons were pilling an amount that were three times greater than the public estimates. Therefore, this information presented evidence that the engineer had prior knowledge of the spillage and that he violated his obligations to alert the organization and institute corrective measures proactively prior to the disaster. In this case, the Karl was held liable for justice obstruction by the court. In this case, he represents individual BP management members held liable for the spillage and who paid the cost through imprisonment and career taints. Conclusion In summary this essay establishes that the global economy is characterized b various forms of power. In this case, the essay utilizes Susan Strange’s approach on power that classified power into four dimensions namely security, finance, and production and knowledge powers. In this regard, the essay establishes that management of international markets and industries in the global platform depends on appropriate application of these powers. As such, the essay reviews the deep horizon oil spillage accident in reference to the application of these powers. On one hand, the evaluation seeks to establish responsible parties who failed to apply their powers and subsequent obligations accordingly. In this regard, the essay points out the BP Company management, the USA and UK governments as well as the specific project senior engineers as key among the responsible parties. In this case, the essay establishes that the management misused its knowledge and financial power by manipulating the outcomes of a feasibility study research it had funded on the possibility of the drilling exercise success. In this case, the regulatory commission relied on these misrepresented findings to license the drilling exercise. Further the governments are blamed for failure to conduct independent studies as well as regular inspection programs of the project in respect to their security powers. Finally, the site engineers are directly blamed for the experienced deaths and injuries as a result of withholding the eminent risks knowledge despite their prior privy to the information. In addition the essay reviews parties that accepted liability to the accident as the BP Company and the USA government. Finally, the essay establishes that among the stakeholders hard hit by the accident were the aquatic life, BP Company shareholders and individual engineers such as Karl who in the various discussed ways paid the costs of the accident differently. References Barret, P, 2014, Appeal Court Blesses BP Settlement but the Legal Drag Continues. [Online] Available at < http://www.businessweek.com/articles/2014-01-13/bp-gulf-oil-spill-settlement-upheld-but-legal-battle-drags-on> [Accessed April 22, 2014]. Fisk, M, and Calkins, L, 2013, BP Gulf of Mexico Spill from Disaster to Trial: Timeline. [Online] Available at < http://www.bloomberg.com/news/2013-02-25/bp-gulf-of-mexico-spill-from-disaster-to-trial-timeline.html> [Accessed April 22, 2014]. Freudenburg, W. R., & Gramling, R. 2011, Blowout in the Gulf: The BP oil spill disaster and the future of energy in America, MIT Press, Cambridge, Mass. Moss, L, 2014, 4 Years after Gulf Oil Spill, Wildlife Still Dying. [Online] Available at < http://www.mnn.com/earth-matters/wilderness-resources/stories/4-years-after-gulf-oil-spill-wildlife-still-dying> [Accessed April 22, 2014]. Osofsky, H. M. (2011). Multidimensional Governance and the BP Deepwater Horizon Oil Spill. Fla. L. Rev., 63, 1077-1121. Steffy, L. C. 2011, Drowning in oil: BP and the reckless pursuit of profit, McGraw-Hill, New York. The Guardian, Wednesday 22 January, 2014, Halliburton manager gets probation for destroying Deepwater Horizon evidence. [Online] Available at < http://www.theguardian.com/environment/bp-oil-spill>[Accessed April 22, 2014]. The Guardian, Wednesday December 18, 2013, Ex-BP drilling engineer convicted of obstruction in 2010 oil spill case. [Online]Available at < http://www.theguardian.com/environment/2013/dec/18/bp-egineer-guilty-obstruction-deepwater-horizon-oil-spill > [Accessed April 22, 2014]. Vaughn, R. G. 2012, Successes and failures of whistleblower laws, Edward Elgar, Cheltenham, UK. Read More