The BP Underwater Oil Leak 2010 - Assignment Example

The BP Underwater oil leak Slide BP Underwater oil leak BP oil is one of the biggest companies which is from the UK, BP oil plays a vital role in the world because they supply fuels for the rest of the world. BP underwater leak started on the 20/04/2010 I have chosen to talk about the BP oil disaster because it has become a worldwide cause of concern and has paid a highly interest in the media. The Deepwater Horizoon oil rig had dug the deepest well ever and had discovered some 500 million barrels of recoverable oil in the sea off the coast of America near the East Coast border with Mexico. As a result of this the company shares rose by 4% in a single day in September 2009. (Crooks, 2010). After the oil leak incident in May 2010 the White House got involved, and announced that BP would be made to pay for the damage caused to the environment. In the aftermath of the oil spill, shares dropped even more sharply, at one point dropping 17% in a single day. (Crooks 2010). Slide 2: BP Disaster: what happened. “The oil leak started when there was a loss of control over the pressure in the well followed by the failure of the well’s blowout preventer, a specialized valve designed to maintain consistent conditions. After the initial explosions the blowout preventer’s emergency functions failed to seal the well, allowing the leak to occur”. (BP oil, 2011) Slide 3: Aftermath The fire burned for 36 hours before the rig sank, and hydrocarbons leaked into the Gulf of Mexico for 87 days before the well was closed. “Eleven people died as a result of the accident and others were injured. We recognize the tremendous loss suffered by the families, friends and co-workers of those who died.” (BP oil 2011) The language of this statement stresses that the occurrence was an “accident” which implies that it is out of the control of the company, and something that happened by chance. The expression of regret is a recognition of the pain and suffering that has been suffered by those who died and others who know them. The words do not imply that BP caused these deaths, or that they accept responsibility for them. The words just regret that something has happened. Slide 4: Images of the burning oil rig. Because of the location of the incident near the American coastline there was immediate press interest and a flood of images and commentaries on the incident itself and the on-going and severe pollution of the area around the rig. BP was forced to treat this as a major public relations disaster as well as an environmental one and health and safety one. It was the attention of the press over a long period of time that turned this from one incident into a long series of further damaging developments. Not only the leak was highlighted, but also the inability of the company to stop it, and the inadequate clean up and recovery attempts. Slide 5: Regret, but no admission of guilt. “We regret the damage caused to the environment and livelihoods of those in the communities affected. We are putting in place measures to help ensure it does not happen again.” (BP oil, 2011) “We have acted to take responsibility for the clean-up, to respond swiftly to compensate people affected by the impact of the accident, and to look after the health, safety and welfare of the large number of residents and people who helped respond to the spill. As of 31 December 2010, we had spent $17.7 billion for our response activities. Throughout, we have sought to work closely with government, local residents, our shareholders, employees, the wider industry and the media. “ (BP oil 2011) The wording of these official statements from BP again shows regret, and even suggests that they have stepped in voluntarily to commit their own resources to clearing up the damage. This draws attention away from the company’s legal responsibility for the potential CAUSES of the incident and towards its efforts to deal with the EFFECTS. Slide 6: A Crime and not an accident! BP underwater oil leak is a corporate crime because it has caused significant serious offences to the local wildlife/economy/workers on board the oil rig and also it causes an important question. Why is it called a disaster, or accident instead of a crime? The company wants to call it an accident in order to avoid litigation. It seems to be suggesting that what happened was not deliberate, and they are victims, too, and doing their best to help everyone affected Slide 7: Definition of corporate crime When people talk about crime, they tend to think of things like murder, theft, assault and they tend not to talk about corporate crime because most of this happens behind closed doors. Many corporate crimes, however, have huge consequences, and this is when they attract public attention. Here is a definition corporate crime: Illegal acts or omissions, punishable by the state under administrative, civil or criminal law which are the result of deliberate decision making or culpable negligence within a legitimate formal organisation. These acts or omissions aere based in legitimate, formal, business organisations, made in accordance with the normative goals, standard operating procedures, and/or cultural norms of the organization, and are intended to benefit the corporation itself. (Tombs and Whyte, 2007, p. 2) Slide 8: Negligence: A crime of omission. According to workers BP oil disaster was caused by a methane bubble that escaped from the well and shot up the drill column, expanding very promptly as it blasted through several of the main seals. This was not a deliberate act of destruction but it was a foreseeable event, and the company has a duty to take all due care to prevent any damage to people or property caused by events which occur during their normal operations. Negligence is a crime of omission, and as such it is culpable, and people can take legal action to obtain compensation if they are affected by negligence. Slide 9: Legal Proceedings Against BP BP faces more than 350 lawsuits from businesses and individuals seeking damages for economic and physical injuries related to the spill. The lawsuits are consolidated before U.S. District Judge Carl Barbier in New Orleans. The case is In Re: Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans) (Calkins and Johnson Jr, March 28th 2011, Bloomberg,com) Because of the huge number of claims against BP as a result of the incident and its long aftermath, and the fact that they mostly relate to pollution damage, the Oil Pollution Act requires that all claims go through the “Gulf Coast Claims Facility.” This includes claims from individuals, companies, and even whole states. The claims of states and businesses not directly on the affected coastline are being resisted, because they indirectly caused by the oil spill, through factors like decrease in tourism to the whole region. If these claims are turned down, which seems likely, then there is no redress for indirect economic impact of corporate crimes. The grouping of claims together greatly benefits BP because it can prepare a single defence and does not have to address each individual claim with so much rigor. The case is still ongoing. BP is an extremely wealthy organization and will probably shake off this incident and the public relations damage, and pay its fines with minimal effect on its overall business in the medium term. The same cannot be said for the individuals who lost their lives, family members, and businesses because of the negligent omissions of BP. Slide 10: Conclusion The court cases will continue, and BP has been humiliated in the market place, and particularly in terms of its reputation in the United States. The price it pays, however high the judges decide it should be, will not recompense those who have suffered. This case goes to show that the market can punish the perpetrators of corporate crime, but in cases of very large organisations like BP, this is likely to hold them back only temporarily. True justice, in terms of admission of guilt and reparations to those who have suffered seems likely to be an impossible ambition, taking many months, if not years to proceed through the courts, and set up to favour the larger organisation and to penalize the smaller individuals and businesses who cannot hold out financially to await their meagre compensation. Slide 11. [Image of dead gannet, source : E. Crooks article, The Economist] Many of the victims of corporate crime have no voice. They have no lawyer making their case, and there is no redress. It remains to be seen if financial penalties will be exacted which help to regenerate the environment. Slide 12: References BP Website: available at www.bp.com Calkins, L. P. and Johnson Jr. A., 2011. BP Denies Oil Spill Claims by Alabama Cities, Mexico States. March 28, Bloomberg Businessweek. Available online at: http://www.businessweek.com/news/2011-03-28/bp-denies-oil-spill-claims-by-alabama-cities-mexico-states.html Crooks, E. 2010. BP: The inside story. Financial Times Magazine July 2nd. Available online at: http://www.ft.com/cms/s/2/4e228e56-84ae-11df-9cbb-00144feabdc0.html#axzz1IdflFuWD Tombs, S. and Whyte, D. (eds) 2007. Safety Crimes. Portland, Or.: Willan Publishing. Read More