The Deepwater Horizon Disaster - Assignment Example

The Deepwater Horizon Disaster Introduction The Deepwater Horizon disaster which occurred in the Gulf of Mexico in is recorded as the greatest oil spill in the U.S waters ever. Millions of dollars were lost in the aftermath of the disaster. Needless to say about the severe effects the spill had on the nearby marshlands, underwater life and the wildlife. Countless fishes, birds and animals including 11 deaths on the BP with several other injuries were reported as well. The fishing and the tourism industry in Louisiana was affected severely for many months after the tragedy. It took nearly 87 days for the authorities to seal off the Macondo oil completely. Several conspiracies as to who is responsible for the disaster is afloat in the industry. Transocean recently paid $1.4bn settlement to BP for the losses. This paper explores some key decisions which might have led to the accident and the lack of ethical conduct behind the same. Ethical perspectives used by the key actors in the disaster The key actors in the Macondo mishap were the Minerals Management Service (MMS) and the three companies which leased the disputed site from them BP, Anadarko Petroleum and MOEX offshore. Transocean from whom all the necessary equipments to drill the well were rented based on a contract basis and the Halliburton cement company are also equally to be blamed. Though each actor is responsible for the disaster in some way or other, the chief responsibility lies with BP and Transocean from whom most of the equipments were rented. Both BP and Transocean staff were found on the accidental site equally with BP monitoring officials and the manual labourers from Transocean doing their job. It is unfortunate that all are to be blamed. The actual cause which triggered the blowout is still not known perfectly. But the key decisions which might have been a reason for the disasters are the usage of nitrogen foam cement by Halliburton, failure to conduct regular test on the sites regarding the rising pressure due to hydrocarbon leakage and the usage of stop collar centralizers instead of the original ones in the well. Both Transocean and BP are to be blamed for both these decisions respectively. Talking from the ethical point of view, BP decided to use only 6 out of the 16 required centralizers because they were in a hurry to finish the project and the count the return of interest. A company spending nearly $1000 per minute for operations will generally be concerned with good returns. Their ethics cannot be blamed completely on the issue. They started using stop collar centralizers instead of original ones as they considered it the best alternative. Transocean staff has committed two pressure test’s regarding the rising pressure in the Macondo well before the incident. The first set of test proved there were all chances for a ‘blowout’. But, it was dismissed as a ‘bladder effect’ by the company and the second test was solely done with the purpose of defending this ‘bladder effect’ theory. We cannot argue that they acted completely ethical. But, the chances for the proposed bladder effect to occur were also very high when the test was conducted. However, they tried to recheck the same. So their ethical decision can be termed as faulty, but they too cannot be blamed completely for rejecting their responsibility. The Halliburton cement company used the nitrogen based cement to seal the Macondo well even though many tests clearly suggested, the combinations of the chemicals used were quite unstable and it will cause a major problem if used in the oil well. The authorities who permitted to use the cement against the various lab test results acted without any ethical responsibility with the sole aim of finishing the project on time. Though all the three key actors are responsible for the disaster in some way or another, the major concern lies with the cement company who did the sealing work a few days before the blowout in terms of ethics. The proceeding court hearings proved the same in the following months. According to the contract terms, Transocean cannot be held liable for any ‘blowout’ which occurs on the site. But, the court ordered them to pay a huge ransom to BP. Initially BP claimed over $5 billion for the losses incurred. But, a settlement was made outside the court for the cost of $1.4 billion (Macalister, 2013). The cost of miscommunication - $115 Million BP was initially accused of trying to pass on the blame on Transocean and Halliburton. The 234 page report submitted in the court regarding the Deep Water Horizon disaster clearly proved, the other companies have to be blamed, but BP’s key officials missed crucial signs of the disaster hours before the disaster occurred (Rogers, 2010). Those who were in the monitoring positions could have evacuated the related chambers to save the 11 valuable lives lost. But, the company officials did not act in time because they failed to see the effects of the enormous disaster. Most of the officers working in BP did not have any idea about the decisions they were taking. The failure of the cement tests were not communicated properly to the BP officials in charge of rejecting or approving the nitrogen foam cement usage. They were simply informed a test was conducted. The officials did not probe enough to check the results of the test deeply. Similarly, the BP officials did not give a second though about the discrepancies which occurred between the first and the second pressure tests. They were satisfied that the second test confirmed everything was fine. None of them was ready to take that extra step to check what prompted the first test to show signs of hydrocarbon leakage. Reports investigating the use of stop collar centralizers show certain engineers emailing the higher authorities regarding the possibility of a slip by these centralizers. The officials, who were responsible to give a proper answer to them, simply kindled them to go with the process instead of probing too much. Their irresponsibility is related to the disaster, but they escaped charges easily claiming this was not the only reason for the ‘blowout’. These authorities were informed about the lack of the available centralizers, but they were not briefed in detail about the disasters which might occur if anything went wrong. Each monitoring official in BP had acted like an isolated department without proper co-ordination or communication. Any person who could have put together the various complaints and test results which took place in the oil rig before the disaster could have got the big picture of the approaching danger. But, the complete lack of communication between various departments cost the US government nearly $115 to $172 million loss. The disaster could have been averted had any one official taken the time and effort to communicate his concerns to all others. According to Kohlberg who did extensive work on morals in the workspace, people act in preconventional, conventional and principled levels when it comes to following the certain ethics or code of conduct. The preconventional people are more concerned about passing on the blame to others and avoiding the punishments. The principled people act with utmost ethics completely opposite to the former group. The low level workers in the factories and industries are often considered prevconventional while the top level leaders are considered principled. The middle men who act as supervisors, manager and monitoring officials usually fall under the conventional category where they draw ethical inspiration from the principled people and act smartly to handle the issue (Kohlberg, 1969). But, the monitoring officers and the supervisors in the BP were neither conventional nor principled. They simply neglected their ethical responsibility completely as underlined in the 8 key findings submitted to the court against the company. Lack of understanding about the core process The employees working in many such oil rigs are not very educated. They depend upon their supervisors for any guidance (Trevino & Brown, 2004). They are hired and trained by companies like BP in a very systematic way to follow the process and stick to it no matter what. Hence, even the engineers who spotted out potential problems with cement and the centralizers in the early stage with the use of their educational background were silenced by their supervisors assuring them nothing will happen. The employees working here are forced to believe what their supervisors say as they have more experience than them and the process do not allow them to deviate from following the orders. Every supervisor or conventional worker has the responsibility to use the corporate resources in a proper way. If you are working in a pharmacy it is your duty not to sell medicine with past expiry date. Similarly the officials in the oil rig had the responsibility to check the harmful effects of their actions. But, they utterly failed to do so because, the corporate reputation, simply prevented them taking any necessary steps. They blindly believed nothing would go wrong as BP is a good company and its processes are streamlined. This mentality prevented them from digging deep into issues and doing their duty fully. What is noted by a beginner level engineer could have been noted easily by the manager or his supervisor with much more experience than the engineer. But, they failed to do so because of negligence. This mentality is prevalent among the BP employees in several oil rigs. The company has a long list of negligence related blowouts in various sites like Alaska in the previous years. Although the issue received massive media attention for a few days, it was largely forgotten in the 111th and 112th Congress meetings. Though more than 60 hearings and nearly 25 proposals regarding oil spills in the Gulf of Mexico were made, no bill was passed unanimously on the issue. No major civil or criminal act was charged on BP. But, Transocean, MMS and other organizations were held responsible for the mishap and fined heavily (Hagerty & Ramseur, 2011). Huge corporate companies like BP are given exception by law in following many rules due to the immense demand for oil, power and energy. The company showed nearly $25 billion profit amidst all these problems in 2011. All that matters at the end of the day is the revenue generated the huge tax they pay to the government and the gallons of oil they produce. They will be given permission to act exactly in the same way with little concern for the public and worker safety in another site without taking into consideration the thousands of job losses the oil spill had caused and the enormous environment effects the disaster triggered. BP will not even be charged a huge fine or any obligatory measures to reform the affected areas. The Deep Water Horizon disaster not only shed light on the unethical behaviour of the officials in the BP Company but on the system we follow in general. Our government, judiciaries, the un-reactive public and the several other companies training their employees to follow only the code are all responsible for such issues indirectly. Ethics as Organizational Culture Ethics as an organizational culture is not easy to form. But, it can be certainly done under proper leadership. Good leadership can simply make or break a company in a not time. Enron is the best example for a talented leader without ethics breaking a hard built empire. On the other hand there are many companies which have survived massive dilemmas with the guidance of good leaders. Changing the organizations culture cannot happen overnight. But, a good leader with vision and insight can provide ample guidance for his employees. Ethical turnaround cannot be instigated immediately. It takes years of motivation and understanding the core needs of the employees. Only the relationship based on trust between the leaders and the followers will last long and help a leader bring about the necessary ethical change (Kramer, 1999). The role of top level leaders in achieving the same is vital. Various studies conducted on the topic states a good leader with vision, integrity, emotional intelligence and competence is necessary for any leader to lead his organization in an ethical way (Hagelberg, 2011). The competency and integrity of the leaders go hand in hand as incompetent leaders with good ethics are not of much use to the society as well as the organization. The values of small subgroups and their concerns will be very weak in any major organizations. The assumptions and the beliefs of the majority will be very strong. But, motivating the majority towards ethical reasoning and decision making lies entirely in the hands of its leader. Ethical decisions should surpass individual differences and based on a deep awareness of the project. This is where the officials of the key actors in the Deep Water Horizon disaster failed. In any corporate company, the traditions and working style of the existing employees will push the new workers on an ethical or an unethical path directly. They will be made to follow the others no matter what their moral upbringing have taught them. Certain companies are so misaligned the employees working for them do not know whether they are motivated towards an ethical or unethical part (Trevino & Nelson, 2011). Such companies have ethically neutral or simply silent leadership which keep the employees in the dark and blame them based on the situation, like the ones found in BP. The leader of any company who acts with benevolence and fairness towards his job can prevent such large scale disasters very easily. Blaming BP or the other key actors concerned with the disaster alone will not solve the issue. Transocean has been given 4 new contracts by the Shell Company. All the companies and officials related to the disaster continue to work and live without change in their attitude. The government and the media should ensure it focuses on the punishment given to people behind such issues to the public to instil fear and a sense of responsibility in them. Ethics should be included in management education. We should create executives who give importance to public safety rather than concentrating only on finishing the project on time at any cost. Ethics should be embedded as an organization culture to avoid such massive disasters in the future. Else the same people will continue to makes series of mistakes in the future endangering the lives of thousands of animals and human beings because of their negligent behaviour. Conclusion Implementing ethics as a culture in huge corporate companies is not a herculean task if the leader of the company decides to do so. The main requirement will be compromise on the profit and give enough time and opportunity of the employees to voice out their opinion and concerns in every part of the process. Be it an oil rig or a space mission or a simple restaurant, following certain ethics is important for the wellbeing of all. Return on investment is important, but it shouldn’t be the only parameter driving the company. The success of the company should be measured based on how ethical its core decisions are and how much importance it gives to the public, its clients and the workers. If every company decides to operate in such a manner, the corporate offices would be a much better place to work for everyone. References 1. Hagelberg, M.T., 2011, Leadership: The Tabletop Concept, The Journal of Values Based Leadership, Retrieved 18th, January, 2013 from http://www.valuesbasedleadershipjournal.com/issues/vol4issue1/leadership_tabletop_concept.php 2. Hagerty, L.C. & Ramseur, L. J., 2011, Deepwater Horizon Oil Spill: Highlighted Actions and Issues, Congressional Research Service, Retrieved 18th January, 2013 from http://www.fas.org/sgp/crs/misc/R41407.pdf 3. Kohlberg, L.,1969, State and sequence: The cognitive-development approach to socialization, Handbook of socialization theory and research, Rand McNally, Chicago. 4. Kramer, R. M., 1999, Trust and distrust in organizations: Emerging perspectives, enduring Questions’, Annual Review of Psychology. 5. Macalister, T., 2013, Rig owner pays $1.4bn to settle over Deepwater, The Guardian, Retrieved 18th January, 2013 from http://www.guardian.co.uk/environment/2013/jan/03/rig-owner-settles-deepwater-charges?INTCMP=ILCNETTXT3487 6. Rogers, S., 2010, BP oil spill: the official Deepwater Horizon disaster timeline, The Guardian, Retrieved 18th January, 2013 from http://www.guardian.co.uk/news/datablog/2010/sep/09/bp-oil-spill-deepwater-horizon-timeline 7. Trevino, K. L. & Brown, E. M., 2004, The Role of Leaders in Influencing Unethical Behavior in the Workplace, Retrieved 18th January, 2013 from http://www.corwin.com/upm-data/4910_Kidwell_Chapter_3.pdf 8. Trevino, K. L., & Nelson, A. K., 2011, Managing Business Ethics, Retrieved 18th January, 2013 from http://books.google.co.in/books?id=nMUExSMU-CcC&printsec=frontcover#v=onepage&q&f=false Read More