Corporate Social Responsibility and Environmental Management - Essay Example

RРОRАTЕ SОСIАL RЕSРОNSIBILITY АND BUSINЕSS ЕTHIСS Name Course Tutor University City Date Introduction Corporate social responsibility has emerged as a significant factor in addressing the environmental and social effects of the activities of oil companies (Freeman, 2011). Today, the world is heavily dependent on the oils and petroleum products to run the daily activities. People all over the globe use oils and its products to run automobile, machines, manufacturing, dyes, lubrication, drugs and various synthetic products. The widespread use of oil and oil products has created various environmental issues. Oil companies are one of the leading world polluters of environment the companies are causing tremendous environmental damage (Frynas, 2012). The vast quantities of oil and oil products that are burned as fuels generate most of the environmental damage in the global environment today. Oil spilled from tankers, pipelines, and offshore have destroyed the environment, and he ecosystems of animals and other organisms. In today’s business ethics and corporate social responsibility oil companies are expected to go beyond environmental damage in addressing the impacts of its activities in the environment. Oil companies have taken substantial steps in addressing the adverse impacts of its activities on the environment (Burgherr, 2007). The companies in the oil and gas industry have been on the forefront championing for corporate social responsibility. This is because of the adverse effects of the activities of the oil and gas companies on the environment. The other reason, which causes oil companies to champion for corporate social responsibility, is because oil companies are vulnerable to the civil society groups’ pressures (Gillies, 2010). The vulnerability of their operations extends to the reputations that the company's brand enjoys on the global stage. Another vital explanation is that oil companies take substantial political and social risks as they usually operate in challenging environments for geographical reasons. This is because oil and gases are located in environment vulnerable ecological environments and countries with poor governance. Despite the steps taken to address the various environmental issues that oils companies cause on the environment, there is a continuing debate as to whether oil companies should be seen as environmental vandals. This paper will discuss the matters surrounding this debate and by using examples highlight the various steps taken by companies in the oil industry in addressing this issues. Corporate social responsibility and environmental management The corporate social responsibility of oil companies has been evolving in the last three decades. The evolution of social corporate social responsibility has led to the not knowing what corporate social responsibility stands for, and the boundaries and where lines of corporate responsibility lie (Rookmin, 2008). Corporate social responsibility encompasses various issues, including health, society’s welfare, human rights among other issues, but corporate social responsibility has the greatest potential in regard to the management of environment, especially with oil companies. The question as to whether oil companies should be viewed as environmental vandals are a controversial. This is because the growth and development of corporate social responsibility has facilitated the growth of corporate codes of conduct in the oil industry in social and environmental reporting. Of the world’s 250 leading companies, 95% of them formal produce reports of their corporate social responsibility issues, and endeavours (Rookmin, 2008). Oil companies are on the forefront on the reporting on corporate social issues. The continual advancement of the global economy makes corporate social responsibility reporting to become complicated recently. Oil companies are on the forefront in advocating for proper corporate social responsibility endeavours in the globe. Oil companies have joined various international voluntary initiatives that are meant to ensure that corporate social responsibility and the sustainable practices are incorporated in the operations of multinational companies, which foster the sustainability of the environment (Runhaar, 2009). This initiative includes the following, the Global Reporting Initiative (1997), Voluntary Principles on Security and Human Rights (2000), Combat Climate Change 3C Initiative (2007), UN Global Compact (1999), and Extractive Industries Transparency Initiative (EITI – 2003). The voluntary participation of oil companies in corporate social responsibility endeavours leads to substantial improvement in the environment conservation efforts (Rookmin, 2008). These conservation efforts will lead to the reduction of reduction in the use of environmentally hazardous materials, increased recycling efforts, adoption of new and sustainable environmental friendly practices, and the same time being rewarded with profitability (Sluyterman, 2010). The continual voluntary participation of oil companies has led to some companies in the oil industry to benefit from good reputation. Companies in the industry have tailored their business practices to proper and sustainable practices in because they share similar approaches, purposes and activities in their operations. Therefore, the voluntary engagements of oil companies in the corporate social responsibility efforts have made significant improvements in the environment (Blowfield, 2008). A study examining seven Canadian oil companies that were incorporating corporate social responsibility practices in the management of the environment found out that, with the implementation of proper corporate social responsibility practices the companies benefited with the improvements of profits (International, 2011). There was a direct correlation between sustainable environmental practices and the improvement of profits. The study found out of the seven companies; two companies that were proactive in the implementation of social corporate responsibility in the management of the environment experience improved earnings. The improvements in technology facilitated the improvement of environmental sustainable practices companies were able to reduce their toxic gas emissions in the b environment. Participating in these conferences led to the implementation of best practices in the industry through shared knowledge and technology. These efforts have led to the question as to whether oil companies should be considered as environmental vandals because, Oil Companies have implemented the best CSR practices leading to the reduction of environmental pollution and damage (Frynas, 2012). Oil production and environmental degradation Despite the precautions and the environmental sustainability efforts taken by oil companies’, accidents in the oil production continue to occur periodically from the various activities of oil production, refining, and the distribution of the various oil products (Frynas, 2009). The environmental damage results from the ageing of pipelines, vandalism of oil pipelines, lack of maintenance, and neglect in carrying out proper maintenance and human error. In the recess, various oil by-products, gases, and liquid material may be released into the environment. The various environmental damage may come from the following; 1. Oil pipelines drill cuttings, drilling mud and fluids used for initiating production activities; 2. Well treatment fluids, oil and water, and chemicals injected to control temperature or assist in the separation of oil from water; 3. Transportation and distribution of petroleum products from one place to the other through pipelines and other related means; and 4. General industrial wastes; sanitary and domestic wastes. Environmental damage and pollution are the introduction of harmful substances directly or indirectly into the environment resulting into harmful and disastrous effects into the environment (Producers, 2011). The result of environmental damage and pollution by oil companies is the harm top living organisms, hazards to human health, interruption to marine activities, impairment of the quality of water and the interruption with the distribution of amenities. All this environmental damage and degradation are as a result, is the man aided alteration of the chemical, biological, physical interference with the quality of the environment. According to world health organisation (WHO) the environment is considered polluted when the compositions and the condition of the environment are altered either directly or indirectly as a result of human activities, and in this case oil companies activities. So that the environment becomes less suitable for the proper use for which it naturally should be suitable in its state (International., 2011). Oil companies are usually considered as environmental vandals because of the effect of the environmental activities on the environment. The adverse effect of its oil activities can result in the destruction of the natural inhabitable conditions of the flora and fauna. The harmful effects of oil activities on the environment have also caused harmful effects to human, causing interference on natural habitations, and natural settings. A study accrued out in the United States has established that human eat seafood that has been harvested from the oil polluted coastal waters of Louisiana, New Jersey and Naples this has profound negative effects of the health of human beings. One of the major causes of oil pollution in the oil industry is oil spillage (Oil Companies International Marine Forum., 2011.). Oil spillage has contributed to the destruction of environment in the world. For example, the BP oil spill at the Gulf of Mexico in 2010 caused tremendous destruction to ocean life. The destruction to the ecosystem of the fauna and flora, and images of oiled sea turtles and birds continue to plague the society today. This is just a miniature representation of the destruction that occurred in the entire eco-system. Fish, whales and sharks the oils get into their eyes impairing their visions. The spilled oils get into the mouths of the ocean organisms impairing their internal organs. There exists various sources of spilled oil in the environment (Sørstrøm, 2010). They include sludge from oil tankers, the disposal of water containing water from oil tankers, the dumping of oil waste materials, the seeping of oil naturally, the discharge of oil as a weapon of war, the leaks from oil tankers, pipelines, and storage facilities, the blow out of wells, atmospheric fallouts, drilling, cuttings, and refinery seepages. The oil industry in this case, is said to be a curse for the environment because of the constant and repeated oil pollution from wells and pipelines, leading to the destruction and degradation of the environment. This makes it unsafe for both human and eco-systems habitations. In examining Enron’s case, ever since the company got involved in the midst of a scandal involving its improper corporate social responsibility and business ethics practices, the company’s name is always associated with corruption, environmental negligence and other accounting malpractices (Frynas, 2012). The record of the company operations in Bolivia is not an exception, in recent past the company faced investigation from the government of Bolivia for the various social and environmental malpractices in that country. In 1997, the company sought approval from the Bolivian government to construct an oil and gas pipeline. In the communities that the pipeline would cut across, Enron offered money and promised the communities that the company would help the communities to secure titles. Years after the construction of the pipeline, the communities received 50 cows and water well, despite the fact that the communities would have to live with the effect of the pipelines for more than 40 years to come (Soares de Oliveira, 2007. ). In 2000, an Enron oil pipeline in Bolivia spilled releasing 30,000 barrels of oils into Andean highlands. The roads that Enron cleared in preparation for the construction of the oil pipeline led to the increasing of illegal logging of trees and the increase of criminal activities in the communities. This happened while Enron did nothing to aid these communities in their predicament. This led to peaceful demonstrations against Enron’s poor social corporate responsibility and business ethics practices (Sluyterman, 2010). The protests lasted for 16 days it ended when the communities along the pipeline and Enron agreed to set up a $1.9 million dollar indigenous development fund, which would facilitate helping the local communities in getting land titles. To date the local communities have only received a third of the payments they agreed with Enron. The communities are far away from securing land titles that Enron promise that it will help them acquire. This highlights the poor corporate social responsibility and business ethic practices that have persisted in Enron in the past decade. The company does not carry out proper social responsibility for the company (Sørstrøm, 2010). The communities were duped the compensation package that they received was negligible compared to the harmful effects that the communities will continue to experience. In years following the agreement, Enron released the rest of the funds following accusations of malpractices, but about 30percentage of people in the communities have received the titles as intended. Although, the government of Bolivia, stated that all people in the communities titled were processed and ready for distribution that has never happened (Soares de Oliveira, 2007. ). In 1999, as a result of the oil spillages and gas pollution, Chiquitano forest, caught fire. The fire gazed a substantial part of the forest, with impressions indicating that no forest left. This led to various conservation groups to leading in protesting against the social environment irresponsibility of Enron. In order to quell the protests, Enron, set up a Chiquitano forest conservation fund worth $20 million. The world wildlife fund, pulled out of the agreement with Enron citing conflicts of interests and business ethics, and corporate governance malpractices at Enron. Enron had n any indigenous community representative at the board of director level, and also there were no representative of the local indigenous communities at any negotiations with the environmental groups. Enron seems to be using its financial muscle every time it is faced with environmental issues. Enron has continually violated a host of environmental requirements leading to the Bolivian government to issue warning to the company. The company used its connections in the Bush administration to shape policies of the government (Frynas, 2012). The collapse of Enron was due to the business unethical practices, lack of corporate social responsibility and poor corporate governance. The corporate social responsibility is the underpinning concept that organisations cannot operate in isolation, they must be responsible for their environment, and take responsibilities for the damages that their activities inflict in their environment. Despite the steps that oil companies have done to ensure that they incorporate sustainable business practices and corporate social responsibility in their operations (Soares de Oliveira, 2007. ). The accidental oil spillages and environmental damage have caused substantial destruction to the environment. This continues to paint the bad image of oil companies. The effect of the oil spillages and environmental pollution inflicts more destruction than the benefits that the economy derives from the oil production. Oil companies are continuously been seen as environmental vandals. This is highlighted further by the effect of the activities of oil companies in Nigeria. The oil spills and natural gas emissions are some of the environmental challenges that Nigerians are facing. Although, the discovery of oil and natural gas has been good for the growth of the economy and development of the country (International, 2011). The effects of the oil spillage and gas emissions has painted a negative picture of the progress that the country has made. The extraction of oil in the Niger delta has continually caused profound environmental damage to the environment. Although, the government in collaboration with the oil companies and the state governments have established strict measures to combat the pollution of the environment, leading to the improvement of the situation, marine pollution is still serious issues that still haunts the industry. The effects of the spillage of oil in the Niger delta state have been vicious in the environment (International, 2011). For instance, Oshika Pipeline Spillage in Delta State, dead fishes were seen floating on the rivers and oceans for weeks that followed. The IkataOkoma pipeline spillages and Geneco Barge spillage had a similar fate on the environment in months to come. In some places, the effect of the oil spillage could still be viewed nine months after the spillage of oil into the environment (Soares de Oliveira, 2007. ). This is further compounded by the theft of oil in the oil pipelines. People steal oil, by causing damages into the oil pipeline. This causes continual slippage of oil into the environment for long periods to come. While the regulatory environment in countries like Nigeria has led to the reduction of environmental damage through the activities of oil companies (International., 2011). The advantage of incorporating CSR into Oil Company’s practices leads to the implementation of industry best practices in the oil industry. The best practices will lead to the education of carbon dioxide emissions, oil spillage prevention techniques to be incorporated in the management of the organisations, or better oil spillage clean-up techniques. CSR leads to innovations in the oil industry into new and sustainable methods of managing the environment (Gillies, 2010). CSR leads to companies questioning the current assumptions and practices, making them come up with new and sustainable ways of managing the environment. This points out to the general strength of organisations collaborating together and sharing the best practices in the industry. This points the general strength of implementing CSR in achieving the desired environmental improvements. Better industrial practices are central in the prevention of oil spill, the better management and innovations that can lead to sustainable practices can be aided by the implementation of corporate social responsibility practices (Soares de Oliveira, 2007. ). Despite the efforts that oil companies are making to improve their environmental protection efforts through the social corporate responsibility mechanisms, the effects of pollution and environmental degradation leads to oil companies being viewed as environmental vandals. Oil companies should be viewed as environmental vandals. Conclusion The information presented in this study indicates that environmental prevention is improving because of the CSR efforts that regulatory environments within which oil companies operate. The benefits of CSR lead to the proper management of the environment and implementation of the best practices in the industry. Oil companies are taking substantial steps to improve their CSR capabilities in order to improve their environmental sustainability efforts. The effects of oil spills and emission of gases in the environment is extremely profound and leads to the destruction of the flora and fauna in the environment. The effects of the oil companies activities spillage and pollution remains in the environment for a considerable amount of time to come. Despite the CSR and sustainability efforts that the oil companies are implementation, the accidental spillage of oils and emissions of gases has profound effects on the environment. This has led to this paper to support the notion that oil companies should be branded as environmental vandals. References Blowfield, M. a. A. M., 2008. Corporate responsibility - a critical introduction. Oxford, UK.: Oxford University Press. Burgherr, P., 2007. In-depth analysis of accidental oil spills from tankers in the context of global spill trends from all sources. Journal of Hazardous Materials, 140(1-2), pp. 245-256. Freeman, I. a. A. H., 2011. The meaning of corporate social responsibility: the vision of four nations. Journal of Business Ethics , 100(3), pp. 419-443. Frynas, J. G., 2009. Beyond corporate social responsibility – oil multinationals and social challenges.. Cambridge, UK: Cambridge University Press,. Frynas, J. G., 2012. Corporate Social Responsibility or Government Regulation? Evidence on Oil Spill Prevention. Ecology and SOciety, 17(4), pp. 1-4. Gillies, A., 2010. Reputational concerns and the emergence of oil sector transparency as an international norm.. International Studies Quarterly, 54(1), pp. 103-126. International., K., 2011. KPMG International survey of corporate responsibility reporting 2011.. [Online] Available at: URL: http://www.kpmg.com/PT/pt/IssuesAndInsights/Documents/corporate-responsibility2011.pdf [Accessed 14Th september 2013]. International, A., 2011. The true ‘tragedy’: delays and failures in tackling oil spills in the Niger Delta. London: Amnesty International. Oil Companies International Marine Forum., (., 2011.. Website of Oil Companies International Marine Forum. [online]. [Online] Available at: URL: fhttp://www.ocimf.com/ [Accessed 14 September 2013]. Producers, I. A. o. O. a. G., 2011. Environmental performance in the E&P industry. International Association of Oil and Gas Producers, London, United Kingdom.: International Association of Oil and Gas Producers. Rookmin, M. a. I. M. H., 2008. hell Canada: over a decade of sustainable development reporting experience. Corporate governance:. the International Journal of Effective Board Performance, 8(3), pp. 235-247. Runhaar, H. a. H. L., 2009. Governing corporate social responsibility: an assessment of the contribution of the UN Global Compact to CSR strategies in the telecommunications industry. Journal of Business Ethics, 84(4), pp. 479-495.. Sluyterman, K., 2010. Royal Dutch Shell: company strategies for dealing with environmental issues. Business History Review, 84(2), pp. 203-226. Soares de Oliveira, R., 2007. . Oil and politics in the Gulf of Guinea.. New York, USA: Columbia University Press. Sørstrøm, S. E. P. J. B. I. B. P. D. D. D. L.-G. F. S. P. J. F. R. a. I. S., 2010. Joint industry program on oil spill contingency for Arctic and ice-covered waters. SINTEF joint industry program. Oil in Ice Report No.32.. [Online] Available at: http://www.sintef.no/project/JIP_Oil_In_Ice/Dokumenter/publications/JIP-rep-no-32-Summary-report.pdf [Accessed 14 Sempember 2013]. Read More