The Exxon Valdez Oil Spill Disaster - Research Paper Example

 Introduction: In present environment, business ethics & values play a very important role. Within the scope of ‘Business ethics’ the social accountability of businesses or corporate houses towards the society in general are considered. Many times the businesses do not follow the ethics and a prominent example of this is EXON VALDEEZE (oil spill) tragedy. It is the duty of the firms to safeguard the interest of the people, environment, animals, etc where it is conducting its operations. (Church) If the company is not performing its duty at the first place then its image and acceptance in the public will be damaged. In the long run the company may face many unwanted challenges and its product may lose popularity for the bad image of the company. Apart from that action will be taken by the legal authority against the company according to the law of the land and huge compensation may be claimed. There are many issues, which are considered as social responsibilities and ethics. Issues regarding companies’ responsibilities towards its shareholders are very crucial. Often two corporate are fighting with each other and the rivalry sometimes violates the ethical values. Hostile takeover, business espionage, and bribing are very common example of this. The suppliers, distributors, transporters, employees etc are also an integral part of a business. So before taking any major decisions company should take appropriate steps to safeguard their interest. In today’s world the priority of the civilization is to protect the environment. So there is a need to adopt environment friendly business practices. The following case illustrates the violations of such business ethics and social responsibility. The Exxon Valdez oil spill disaster: The EXON VALDEZ oil spill case was one of the biggest industrial disasters in the history. The tanker was carrying 1264155 barrels of crude oil from the port of Valdez, Alaska to long beach, California and in its journey ran into Bligh reef. (Freeman and Bennett, 2) Due to this collision oil began to leak from it. The effect of this oil leakage was very harmful for the costal life, environment etc. The marine ecological balances were damaged (Tulay). Wild life suffered a lot and 88 species were harmed. Estimates revealed that 1016 sea otters and 36460 seabirds died. There were as many as 2927 birds covered too much in oil and could not be recognized and 151 eagles were bald after the incident (Freeman and Bennett, 18). Crude oil in Alaska has a lot of sulphur as its content and this enhances the risk of skin ailments. Later the investigation reports revealed how the accident took place in few months time. There was a criminal negligence in the part of the captain of the tanker. There was a series of violation of rules and regulation took place which lead to that accident. First, pilot Murphy was getting ready to land at Rocky point14 miles beyond the port, where a pilot boat would meet him and carry him back to Valdez port. (Freeman and Bennett, 2). Captain Hazelwood’s absence from the bridge in fact was a defiance of company guidelines and Coast guard rules. As per the rule two officers should be on the bridge during the transit from port to the point of disembarkation. Second, there was a communication gap between the authorities and the captain of the tanker followed by poor planning and execution errors regarding handling the ship. The captain was also found to have taken alcohol. Technical failure included a poor radar system with low resolution and troubled by bad weather conditions. After some time the company took some initiatives to protect the shoreline and recover as much oil as possible. The coast guard also reached the spot. The first priority of the company was to transfer the oil from one tanker to another and seal the leakage and then measure the environmental damage. The cost guards sought permission from Alyeska to conduct burning of the oil on the site in water. This area had little communication facilities. The Alyeska Valdez Emergency Center requested the trans-Alaska pipeline to reduce its speed and the authority curtailed the oil spill to some extent. Company policies and ethical issues: This case can be considered as a classic example to define the dimensions of corporate liability and social responsibility. The company tackled the situation in such a way, which raised some questions in the society regarding the importance of ethical values in business. The company took many decisions, which are not appropriate and rather careless. As time progressed many authorities came into the action along with coast guards. In the mean time when the contingency team asked an Exxon official whether the ship was surrounded by a floating boom to keep the oil from spreading as the contingency plan called for he answered in negative. This was a shocking incident. Even when the fishermen association of that region voluntarily offered help to address boom around the tanker with their boats the company rejected it. Then the Alaska regional response team mandated in State’s contingency plan comprising of the coast guards, the EPA, the US department of interior, Agriculture, commerce and the Alaska departments of conservation, organized their efforts with the help of teleconference (Freeman and Bennett, 3). There was also no stock piling equipment on board. The company did not have any suitable plan to protect fishermen and fisheries. The tourism around the area was also affected severely. The company also tried to use the dispersant before checking its utility and the effect it will have on marine life. There were many people on the spot to tackle the situation but shockingly very few Exxon employees were present there. This kind of lapse in duty was not called for. Post accident, the company had decided not to face the media and answer their queries. They asked boat pilots, birds rescue crew, and others workers to sign a contract which restrained them from opening their mouth before the press. The company should have addressed the press and clarified directly. But the public relation department failed to deliver at that point of time. By analyzing the series of events we can surely draw a conclusion that there was no coordination among the top officials. They took command when the invaluable time was lost. There was no crisis management plan at the first place. The assessment of the situation and planning by the staffs including the captain were terrible. They first tried cover up their fault; the blood sample was collected from the captain and other members nine hours later. The samples were taken to conduct a test to identify the alcoholic level in the blood but the delay may have affected the outcome and the difference in the actual and threshold level. Even when the arrest warrant was issued against Hazelwood, the captain of the tanker it was found that he has already left the place a day before. This kind of non-cooperation reflects doubt towards the ethical decision of the company. Exxon was also much unprepared and it had not developed any logistics support around the area where they were operating for quite a long period. They did not use double-hulled vessels in Alaskan water. Many necessary types of equipment were not in stock and the little bit, which they had in possession, took long time to reach the spot because of poor logistics mechanism. The company tried to use money (bribes) in many cases to safeguard them selves. The company showed very self-centric attitude at that point of time. It overlooked the effects on environment, fishermen and the common people in that region. (Freeman and Bennett) Recent technical researches show that oil spill spread widespread damages towards aquatic life. This also hampered the food sources of the wild life in that region. But still the company was much focused on its financial losses and related issues and it was confirmed when the president of Exxon shipping corporation Mr. Iarossi made the statement saying, “ I know the operation is not spectacular- the ship just sits there- but I can not overemphasize the concern we have had from the beginning that we had a 240000-barrel problem, and the last thing in the world we could stand is having a 1,240,000-barrel problem.” (Freeman and Bennett, 11) In the era of modern business it is clear that the main assets of a business is the people or in specific terms consumers. Therefore it is not possible for a company to do business without having any responsibility towards them. So the stand taken by the Exxon shipping corporation was unacceptable. Exxon was not so much interested in considering these problems, which the people of that region would be facing in the coming years. The clean up efforts were inadequate (only 85% of the shoreline was reported to be properly cleaned), unsatisfactory and not time bound. But at last the company realized its mistakes and entered into a damage control mode. The company wished to finance a major public-relations campaign to help the tourism and fishing industries in Alaska. Then the chairman of Exxon Corporation broke his silence and on the sixth day after the tragedy apologized on national television for the oil spill but the public image of the company was already damaged and they had to suffer for a long time. The judge of Alaska Supreme Court declared the company to be totally accountable for the spill as per the Alaska Environmental Conservation Act. The main fault was not to give proper estimates and even efforts to hide the real figures of damage. Davidson very carefully subdued the damage and the fault even years after the spill, saying, “No amount of money spent or personnel deployed can control a large spill” (Freeman and Bennett, 31). He also said that the company acted more swiftly than the local administration and it was not prepared for such a spill. However, national consumer groups urged the public to boycott Exxon products, shares was sold, and nearly ten thousand Exxon credit card holders returned their credit cards to the company to express their dissatisfaction for the entire series of events. The company, according to his response spent a large amount of resources to fight the spill. The company failed to keep the public updated about the possibility of a spill. The company did not admit the lack in resources to respond to this disaster. There were many legal loopholes in the system and in spite of being apologetic they had tried to exploit these to minimize the consequences. Initially they were also not very willing to pay a huge compensation package. (Freeman and Bennett) Conclusion: So the ethical question arises regarding approach that a company should take while conducting its operation. Businesses where the risk of environmental disaster, hazards is very high should take risk benefit approach rather than cost benefit approach to analyze their business. Recently, many companies are adopting the social marketing techniques to improve their public image. These will also help the brand image of company’s products. In the case of Exxon shipping corporation we can surely spot the flaws on the part of the company and some major ones included slow response to the situation, indifferent attitude towards public and environment, casual approach, poor public relation management and arrogance, adopting cost benefit business approach at the time of crisis. After few years of the incident one of the good consequences of the disaster was the establishment of the CERES (Coalition for Environmentally Responsible Economies) principles. These entailed some kind of an environmental code of conduct drawn up by a group of social investors, environmentalists and public interest groups (Donovan; Tulay). The techniques of operations have been modernized. The companies operating in this field are now more vigilant and careful. They are now better equipped and have more competent crisis management team. They are now willing to formulate a well thought out contingency plan for every possible incident in advance. The laws are now much stricter than earlier. So we can surely conclude by saying that although the Exxon Valdez oil spill case was a huge tragedy but it was also an eye opener for the corporate sector about their responsibilities and ethical values. Works Cited Freeman, R. Edward and Bennett, Patricia, “The Exxon Valdez oil spill”, Darden business publication, University of Virginia, n.d., available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=908133 [accessed on 17.08.10] Donovan, William, “Exxon, CERES and Social Activism”, Socially Responsible Investing, July 10, 2008, available at http://socialinvesting.about.com/b/2008/07/10/exxon-ceres-and-social-activism.htm [accessed on 17.08.10] Tulay, Mark “Commitment to gulf clean up will be true measure of B.P”, May 28, 2010, available at http://business-ethics.com/2010/05/28/1531-opinion-commitment-to-gulf-cleanup-will-be-true-measure-of-bp/ [accessed on 17.08.2010] Church, Anthony, “What are business ethics and what is their importance?”, Woodridge, n.d., available at: http://business-ethics.bestmanagementarticles.com/a-21182-what-are-business-ethics-and-what-is-their-importance.aspx (accessed on August 18, 2010) Read More