Ethical Issues Surrounding the BP Oil Spill Incident of 2010 - Literature review Example

ETHICAL ISSUES SURROUNDING THE BP OIL SPILL INCIDENT OF 2010 Your name Subject Date INTRODUCTION In April 2010, the explosion on the British Petroleum (BP) Deep water Horizon drilling rig killed 11 workers and injured 17 others. The rig continued to gush oil into the Gulf of Mexico until it was capped on July 15, 2010. The well was declared effectively dead by the United States federal government on September 19, 2010. By this time, almost 5 million barrels of crude oil had leaked into the Gulf. Marine and wildlife habitats were damaged, while tourism and fishing industries were crippled along the Gulf Coast. Fishing grounds, national parks, wildlife sanctuaries, and beaches across Louisiana, Mississippi, Alabama, and Florida were threatened by the spill. The economy of this region was damaged by the spill. Many businesses were forced to close, and many people were left unemployed. The BP oil spill is considered an example of why many businesses and organizations need better corporate responsibility standards. The paper sought to investigate on the ethical issues surrounding the bp oil spill incident and formulate lessons/ guidelines that current and future corporate bodies can employs in their daily activities. WHY IS BP OIL SPILL CONSIDERED A MATTER OF CORPORATE SOCIAL RESPONSIBILITY According to David (2005), corporate social responsibility is a matter of trying to be a virtuous organization whereby the business is guided by some inborn virtues like the ones for human beings in trying to shut down all the detrimental effects that its actions can have on the environment. He foresaw the corporate responsibility issues through Jeffrey analysis where he said that “corporate social responsibility is the future of businesses since by incorporating it in their day to day affairs puts the company’s actions under a microscope”. In his analysis he also concurred with Bakan (2009) who argued that corporate social responsibility is just a baptized form of creed in that the organization tries to create a responsible public image yet its main objective is self-centered – to blindfold the consumers and thereby make more profit. In his conclusion he observed that some organization embed corporate social responsibility in their activities since they foresee a calm environment as an asset for growth while others involve in corporate responsive activities due to legal requirements (2011, 2-5). Sneirson et al (2011) pointed out some companies are mischievous in their corporate social responsibility in that they might be responsible in some sections but irresponsible in others. For instance, a company/ organization might be responsible in environmental issues but act poorly in labour laws. They pointed out that for this responsibility to be realized, different independent entities should cooperate and work together. For instance, supervisory bodies, implementers and policy makers should each perform their roles optimally. In analysis of the BP oil spill incident, this should be considered as a matter of corporate social responsibility because; Since the company deals with highly poisonous products, it had a duty to protect the environment, employees working there, and also the neighbouring society. Since the company is operating in another countries territory, it had to own the leasing contract it signed. After the spillage, the company took nearly three months to clear away the oil from the water surface which shows laxity on its part (Dusell et al 2010). The company had experienced various accidents in the past and thus it needed to have put in place measures to prevent future uncertainties e.g. the 2005 Texas accident. Because of the enormous amount that the company suffered in paying legal fees, damages, fines, in advertisement to redeem its image and also in organizing charity activities to win back the locals trust. Cherry et al (2011) laments that various entities failed in preventing the BP oil spillage from happening. These entities ranged from the federal government agencies responsible in manning deep water drilling activities and corporate act custodian. They continued to assert that the corporate social responsibility doctrine, corporate governance and not forgetting the BP top management personnel are to blame for the occurrence. Failure by the BP oil company in their corporate social responsibility was evident since they underscored in all the aspects that encompass a corporate social responsibility model as discussed below; Responsible business practices: This touched on both the company and the internal mineral management department. Waxman et al (2010) noted out the company colluded with the state department in their operations and therefore the department just used to rubber stamp BP company documents without prior assessment of quality check. Environmental concerns: Clifford (2010) took note of BP CEO’s (Hayward) irresponsible comments concerning the spillage that had already occurred in the Mexican gulf. The CEO stated that the spillage was” modest” as compared to the ocean size. Employee relations: Waxman et al (2010) additional findings showed that BP Oil Company in its effort to reduce on it operating cost compromised the safety standards in the well excavation thus jeopardizing the safety of its staff. Economic financial good practices: As it happens in nearly all businesses, uncalled for spending is usually not entertained. BP incurred a lot of loses ranging from court legal fees, compensation money, charity work to redeem image, fines and all this was unplanned for . Liz and Dolnick of New York times (May 5, 2010) pointed that the excavation of a new well was going to take a minimum of 3 months which had serious implications on the BP oil company since at this time the spillage of oil continued and the criminal penalties for the spillage were to be calculated per barrel. Addressing concerns of different publics: Literature shows that the BP Company was insincere in the manner in which it sold its image to the public. According to cherry et al (2010), concerns about the company’s environmental pollution activities were evident amongst the local community but the company deposited $200 million in advertising so as promote its image as a strong promoter of CSR. The authors lament the fact that the advertising was wildly accepted and the larger American society saw the company as a strong promoter of renewable sources of energy sources and also as a chief campaigner for the promotion of the fauna population. Charitable work: From the company’s website, it is evident that charitable activities started after the oil spillage in trying to rebuild the industries which were affected by the spillage. STAKEHOLDERS AFFECTED BY THE OIL SPILL. “Stakeholders are people who have an interest in a company’s or organization’s affairs and whose actions may directly or indirectly affect the company/organization. For the case of the BP oil company, the stakeholders who were affected by the oil spillage were the; area locals, gulf fisheries industry, tourism industry, businessmen in the gulf, National Fish & Wildlife Foundation, the American government and lastly the national science department (Robertson et al 2010). The following is a brief description of how some of the stakeholders were affected. No. stakeholder Effect BP company response 1. Local population Inhalation of oil fumes and also risk of consuming poisoned fish. Clearing the spilled oil from the waters and carrying to research to ascertain the safety of the sea foods. compensation 2. Gulf fisheries industry At first the industry was closed thereby landing them jobless. Secondly the landing of the shrimp species reduced by 35.6 million pounds (27.6%) resulting in lower revenues (Harold, 2011) 3. Businessmen in the region Spill reduced sea food supply and demand in addition to problems in regaining customer trust concerning the safety of the sea foods (Harold 2011) Compensation of the local business people and advertisements by the company promoting the industry. (BP website) 4. National fish and wildlife foundation Some sea species populations were affected e.g. fish and oysters. Reduced revenue since it controls the tourism industry in the gulf (Harold, 2011) Cleaning up of the spilled oil and compensating the organization. Given $179 million through to 2013 to Alabama, Florida and Mississippi for regional and national tourism campaigns. Source (BP ) 5. National science department Lost research materials. Environmental pollution Source (BP ) Compensated Source (BP) 6. American government Citizens lost trust in sea foods thus risk of diseases. Poor public image Its environment degraded BP paid fines. Paid for the cleaning exercise in the gulf Source (BP) Why the national environment is considered a stakeholder? Environment is the natural world of land, sea, air, plants and animals, According to Harold (2011), the environment suffered greatly as a result of the oil spillage. For instance, the living organisms that inhabit the ocean and coastal areas were greatly harmed. Fisheries survey conducted in the dauphin gave some contradicting information from the expected since they showed that the fish species had increased which they attributed to the closure of the fishing industry which gave them time to multiply. Because of the known effects of oil of living things .i.e. blocking the respiratory routes/pores, it is true stating that the environment is a significant stakeholder for the BP oil company since any effect on it will in turn affect another string of individuals. It is also a great contributor to economic growth since it supports all the economic activities that occur in planet earth and this is the reason that protocols like the Kyoto one were signed (Smith 2010). It is BP company responsibility to protect the environment by preventing some of these calamities in future and also in carrying out research on the effects of its actions on the environment. The BP Company should also carry out campaigns aimed at protecting Mother Nature. SOCIAL RESPONSIBILITY LESSONS LEARNED FROM THE BP OIL SPILL According to Grant (2011) document on corporate law, there are five important lessons that corporate organizations should learn from the bp oil spill incident. The lessons are as follows; Lesson 1: integrity and honesty is true in an activity that an organisation does failure to which takes away trust. Lesson 2: Good organizations are not judged on how they respond during good times but rather during the times of crisis. Bp used to be ranked amongst the first top companies in US according to Lawrence et al (2011) but a one moment mistake tarnished its name and thus organisations should up uncertainty plans in place always. Lesson 3: There is no social class when dealing with the public. Remember the popular saying that “the emperor or king may be toppled”. Always the corporate organisation should consider the public/customers to be the boss in all their dealings. Lesson 4: Regulating bodies and the ones regulated should perform their duties to the fullest. As it was observed that the mineral department didn’t assess the bp’s machines and actions this made it become also liable in the claim. The lessons being passed to the corporate bodies is that all their arms should do their work. Lesson 5: There should be well laid down protocol document stating the duties of each individual/department so as to prevent arm twisting incidences when one underperforms. REFERENCE LIST Cherry, M, A., Sneirson, J, F., 2011.Beyond profit: Rethinking corporate social responsibility and green washing after the BP oil disaster. David, V., 2005. The market for Virtue: The potential and limits of corporate social responsibility. R.R.Donelly: Massachusetts Gold, R., Daker, S,. 2010. Oil Spill Halts, for Now, as BP Tests Out New Cap, WALL ST. J., July 16, 2010, at A1. Grant, K. G. 2011. What can we learn from the 2010 BP oil spill? : Five important corporate law and life lessons. Harold, J, .1980. Journal of Business Strategy.ISSN:0275-6668.Pg 37-39. Harold, U, F, .2011. The deep water horizon oil spill and the Gulf of Mexico fishing industry Hofstede, G. 1997. Cultures and Organisations: Software of the Mind, NY: McGraw-Hill. Krauss, C., 2010. Oil Spill’s Blow to BP’s Image May Eclipse Out-Of-Pocket Costs, N.Y.TIMES .April.30, 2010, at B1. Levy, D., Kolk, A., 2010. Winds of change: corporate strategy, climate change and oil multinationals. University of Amsterdam: university of Amsterdam. Power, S., 2010. BP cites crucial ‘mistake- very large Abnormality’ in the well wasn’t heeded hours before the fatal explosion, WALL ST. J., May 26, 2010, at A1. Robertson, Campbell; Krauss, Clifford (2 August 2010). "Gulf Spill Is the Largest of Its Kind, Scientists Say". The New York Times. Retrieved 17 November 2012 Russell, G., King N., 2010. BP’s investigation finds Unheeded ‘warning signs’ WASH. POST, May 26, 2010, at A7. Smith, C. L,. Smith, L.M., Ashcroft, P., 2011. Analysis of Environmental and Economic Damages from British Petroleum’s Deep water horizon oil spill: Missouri State University. Solomon, N. M.,Jansen, S., 2010. Health effects of the Gulf oil spill. Uhlmann, D. M., 2011.After the spill is gone: the gulf of the Mexico, environmental crime, and the criminal law: Michigan. http://www.bp.com/. Retrieved on 16th April, 2013 at 1545h Read More