Ethics of the Company - British Petroleum in Manmade Disasters - Case Study Example

A Critical Analysis of the Ethics of the Company: BRITISH PETROLEUM in Manmade Disasters Table of Contents Introduction 3 The Deepwater Horizon Oil Spill 3 The causes 4 The consequences 5 Ethical considerations 6 Virtue ethics 7 Deontological ethics 7 Consequentialist ethics 8 Ethics of the company: British Petroleum 8 BP accused of ethical and legal violations 10 Conclusion 11 Reference List 12 Introduction The world is progressing at a fast pace along with various developing technological advancements. Human beings are indulging in different kinds of activities for their economic progress. Although the common purpose of these actions is to bring progress, some of the activities made by man are not environmentally responsible. These actions are either deliberate or the outcome of negligent proceedings made for short run profit of the individual doer or a group of doers. Such incidents tend to affect the environment of the society in which is plagued with undesirable activities. When such behaviour by man continues without restraint, it leads to occurrence of disastrous events of greater dimensions. Thus, disasters whose sources can be identified as human triggered incidents are termed as human-made disaster. It is contrasted with natural hazards in terms of the source or cause of the disaster. A specialised branch of ethics, termed business ethics focuses on the moral standards that are applied to the activities and behaviour of business organizations. In recent years, several organizations have been found to violate the basic moral principles or prescribed framework of ethical rules, in the process of organizational decision making. In this paper, one major incident of violation of business ethics would be discussed under the light of standard ethical theories of moral reasoning. The Deepwater Horizon Oil Spill One of the most influential oil spills of the decade occurred in 2010. It is known as ‘The Deepwater Horizon Oil Spill’ or ‘BP oil spill’. The British Petroleum (BP) has been held primarily responsible for the oil leakage that has spread in the bases of the Mexican Gulf. The Deepwater Horizon Oil rig exploded in April 2010 and sank to the sea floor leading to oil discharge of 49 million barrels or 210 million US gallons. The oil flowed for nearly three months before the rig could be capped. Finally, in September in the same year, the well was declared as closed. However, the effects of the spill of such high volume had a massive after effect. The beaches on the Mexican Gulf, wetlands and estuaries in the nearby areas had been tremendously affected. According to reports, eleven lives had been lost in the oil rig explosion. Several others had been seriously injured in the incident. The immediate effect of the incident was reflected in the loss suffered by the families, friends and relatives, besides the loss of the lives and injury of the workers at the oil rig. There has also been huge loss to the lives of the inhabitants (weeds and animals) of the gulf waters. This has affected the ecosystem on a large scale. The long term effects are felt even three years after the actual incident of the oil spill. Tar balls are visible along the coast of the Mississippi river, which are causing diseases among the fishes and other sea animals. Hence in mid-2013, the coast of Louisiana was closed to commercial fishing. This has been harming the livelihoods of the fishermen in these areas. The causes A series of investigations had been launched to inspect the cause of the incident. Research reports revealed in 2011 that there had been faults on part of BP as well as the rig operator and the contractor. All evidence received through investigation accused the cost cutting measures adopted by the company few months before the incident took place. The company also failed to take sufficient safety measures and had inadequate amenities to support emergency situations (Ohreen, 2010). The faults that led to the leakage of the well were the result of negligence and lack of precaution. The impacts of the oil spill were found to affect the environment, health condition of man and other species living in the oil stained water and the economy. The consequences Environmental impact: Since the occurrence of the explosion in the Deepwater Horizon oil rig, oil continued to leak uncontrollably and spread into the sea waters. The oil contained methane and other deposits, which are responsible for depleting oxygen. Hence, innumerable marine lives have been choked to death. Even three after the actual incident, a deficiency or even total absence of marine creatures has been noticed in an area with 50 miles of diameter around the oil sealed oil well. Living beings on the land area has been also suffering various diseases due to the intake of the water or marine animals in the form of food. Off springs of animals are also found to be born with handicapped body parts, such as, missing eyes or metamorphosed figures (Dosomething, 2013). Health impact: Chemical poisoning from the oil rig explosion has created significant health impact on people. The workers that have been involved in the clean-up of the oil massacre have suffered severe skin irritation, eyes and nose diseases and breathing problems. Residents of the beach areas have reportedly been suffering from various digestion problems, breathing problems, damage to the nervous system and also short term memory loss. Birth defects are being reported among the off springs of the current adult generation. It has been forecasted that the effects of the oil disaster would be prevalent at least for the next five years from 2013. Economic impact: There have also been serious consequences on the economy of the Gulf coast. Fishing and tourism industries have been worst affected. The company has incurred significantly large cost for relief programs, payments of claims and settlements and fines (BP, 2013). The government has also undertaken the task of redeeming the damage by taking the responsibility of a major part of the expenditure required for the clean-up of the sea coast and treatment of the people suffering chronic diseases due to the oil massacre. A large portion of the labour force of the economy has become unfit for productive working. Ethical considerations It is the duty of all communities to prepare for any disaster, irrespective of whether it is predictable or unpredictable. Unpreparedness increases the consequences of the disaster by several folds. One important perspective of ethical consideration of disaster management, as emphasised upon by researchers, is that man-made disasters are mostly the result of negligence, lack of security schemes and prevention measures (Sonenshein, 2007). There are different ethical obligations that scientists, implementers of law, business enterprises and common mass in a country equally share. While the authorities are responsible for implementing the law, it is the responsibility of the business enterprises to be righteous enough to prevent any loopholes while following their corporate responsibility (Snoeyenbos and Humber, 2002). Pre-planning for a disaster would include developing stringent laws regarding security plans, strong safety programs for the workers and also safety measures that involve the community people in which the corporation is operating. This is the first step towards ‘ethical preparedness’ (AHRQ, n.d.). Three general theories of ethics have been considered by many scholars for the purpose of solving ethical dilemmas. These are the consequential ethics, deontological ethics and virtue ethics. These individual approaches are integrated with one another to form the Integrity approach. The following figure illustrates the three theories. It is used as a stepping stone towards evaluation of organizational behaviour and practices. Figure 1: Three General Theories of Ethics (Source: Kaptein and Wempe, 2011) Virtue ethics Most theories of moral obligation focus on the action or behaviour made by various social agents. However, in the theory of virtue ethics, instead of the actions made or the consequences generated as a result of the actions, the individual doer is considered for the ethical evaluation. In the business world, this refers to an individual business organization. Virtue is a character imbedded in the organizational framework of organizations and cannot be overlaid from outside (Schwartz, 2005). Deontological ethics Deontological ethics refers to the obligations that every individual person has. These are the ethical values integrated within the social agent with his sense of duty. Moral evaluation of deontological ethics refers to the evaluation of the performance of a person or a firm with respect to the obligations that the agent cannot dispose off in exchange of any other favour or personal benefit. Deontological ethical theories firmly hold that the duties “must be observed irrespective of their consequences” (Kaptein and Wempe, 2011, p. 4). Abiding by this ethical framework, an organization would be able to prohibit unjust actions and respect the legitimate rights of all stakeholders, including the customers, society and the environment. The basis for deontological theory considers both the action and its consequence. According to several scholars, judgment of whether an action is right or wrong, can be made by evaluating the nature of action. The process of determination of morality of an action involves making rational arguments regarding the consequences of the action and developing insights about the ‘goodness’ of the action. The extent to which benefit is received by all parties involved in the action directly or indirectly, determines the relative level of goodness of an action. Consequentialist ethics The framework of consequentialist ethics shows that “the moral content of an action is determined by the real and expected consequences of that action” (Kaptein and Wempe, 2011, p.2). An action can be categorized as morally good if the outcomes of the action are desirable from the point of view of the society as well as the organization. There are certain standards (rules determining the purpose and end of an action) against which the consequences of any action might be judged. If judgment of an action shows that the action does good only for a very small group of selected social agents including the organization (or person) that has made the activity while harming others, it indicates that the action is socially bad. Ethics of the company: British Petroleum Several instances of ambiguity have been noted in the case of ethical considerations of BP. There are inherent conflicts in some principal ethical custom s laid down by the company on paper and those that are followed in field. Planners of ethical customs of the company are in serious need of reviewing of the actual feasibility of their ethical plans structured for the company that guide the action plan of the employees (Schumann, 2001). Ethical designs have to be made in sync with the corporate plan of the company. Research shows that BP has not taken significant safety and preventive measures for the drilling operations that it had conducted in the off shore oil shale in the Mexican Gulf. Apparently, faulty construction and improper cementing of the drilling well has created leakage of oil and led to explosion of the oil rig (Dosomething, 2013). The incident implies that the company has waited for the actual occurrence of disaster before taking any actual steps with respect to the disaster. This shows lack of responsibility on part of the company towards the community and the environment. Similarly like vaccinations for preventing any disease to occur, it is important for an organization to develop a safety framework and check the feasibility of the framework before investing in any venture. Lack of such a safety net leads the way to a catastrophe as has been exemplified by the BP oil spill. Another aspect that has to be reckoned by a company is that it is easier and perhaps less costly to consider the ethical sides of a business venture and take steps to minimise the impact of any unwanted accident, than to frame relief measures in the midst of a catastrophe. The outcomes of the disaster might deviate by a large extent and its effects might reach further than the imaginations of the authorities. This is evident in the case of the oil rig explosion of Mexican gulf. Beyond the death and injuries of the workers present in the oil drilling platform and the death of the sea creatures near the oil field, the families and near ones of the workers have been affected, the aquatic creatures have been metamorphosed, the residents of the area have been undergoing physical and mental trauma and new born babies are being born with physical deformities and mental disabilities. According to analysts, the effects of the incident are expected to remain influential for five more years in the future. Hence, it shows that although the relief programs have been launched and compensation had been paid to the people, there are enormous effects on the future generation. This indicates a huge cost to the society that has not been previously accounted for. BP accused of ethical and legal violations The company, based in London, has a long history of making ethical violations in various places in the world. Twice before the Mexican massacre, the company has been accused of environmental crimes; once in Alaska and the other time in Texas. It has been critically accused of violating work safety standards in its various enterprises in the United States (Mauer and Tinsley, 2010). According to some reliable sources, the spokesperson of BP, Tom Mueller, has publicly denied the need to measure the actual rate of leakage that was taking place during 2010. This led to wide variations in the range of estimates regarding the oil spill. The spokesperson opined that efforts to comprehend the volume of the oil leakage would be “irrelevant” (Malik, 2010) and was undesirable since such efforts might detract the actual efforts made for the clean-up. Such opinion by the company spokesperson has become a source of high controversy. Critics, media persons and the common mass consider this action as a breach of ethical standards by any corporate organization (Warren, 2012). The idea that any effort to measure the leakage of oil should as proposed by Mueller, is unrealistic and detrimental to the situation. Experts have responded by saying that it is not possible to launch an efficient clean-up program without actually knowing the extent and effect of damage. Several issues have been raised by activists from Mexico as well as other countries. The legal and moral obligations of the company have been questioned. Conclusion Man-made disasters arise from by different human beings that involve negligent use of technology and lack of responsibility towards the society and environment. While some of the man-made disasters are predictable and can be prevented with use of caution, some others are unpredictable. Since technological development requires experimentations, many of these activities have certain outcomes, the results of which are unexpected. These incidents are powerful enough to pose potential risk to life and property. Some of the effects of man-made hazards fade away quickly, but, some of the incidents have their effects lingering on for a long period of time. It adversely affects the health of livings being in land, water and air, brings drastic climatic changes and also causes civil disturbances. Certain major ethical questions have arisen in relation to the BP oil spill and the attitude of the company towards measuring the extent of harm caused and responding to it. According to the theories of moral principles discussed in this paper, it is evident that the company has shown lack of moral consciousness and failed to fulfil its duty towards the society (Ohreen, 2010). This indicates that there is no inherent virtue in the organizational decision making process. The company has considered the beneficial consequences of its drilling activities from the point of view of profit to the management and benefit of its shareholders, but, ignored the negative consequences of negligent drilling and drastic cost cutting activities on the environment and society. Reference List AHRQ, n.d. Ethical Considerations in Community Disaster Planning. [online] Available at: < http://archive.ahrq.gov/research/mce/mce2.htm > [Accessed 26 October 2013]. BP, 2013. Deepwater Horizon Accident and Response. [online] Available at: < http://www.bp.com/en/global/corporate/gulf-of-mexico-restoration/deepwater-horizon-accident-and-response.html > [Accessed 26 October 2013]. Dosomething, 2013. 11 Facts about the BP Oil Spill. [online] Available at: < http://www.dosomething.org/tipsandtools/11-facts-about-bp-oil-spill > [Accessed 26 October 2013]. Kaptein, M. and Wempe, J., 2011. Three General Theories of Ethics and the Integrative Role of Integrity Theory. [pdf] SSRN. Available at: < http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1940393_code346994.pdf?abstractid=1940393&mirid=1 > [Accessed 26 October 2013]. Malik, S., 2010. Ethical Questions Surrounding the BP Oil Spill. [online] Available at: http://blog.practicalethics.ox.ac.uk/2010/06/ethical-questions-surrounding-the-bp-oil-spill/ [Accessed 26 October 2013]. Mauer, R. and Tinsley, A., 2010. BP Has Long Record of Legal, Ethical Violations. [online] Available at: < http://www.bradenton.com/2010/05/09/2270256/bp-has-long-record-of-legal-ethical.html > [Accessed 26 October 2013]. Ohreen, D., 2010. Opinion: BP Puts Costs Ahead of Environment. Are We Surprised? [online] Available at: < http://business-ethics.com/2010/07/05/1432-opinion-bp-puts-well-costs-ahead-of-environment-are-we-really-surprised/ > [Accessed 26 October 2013]. Schumann, P. L., 2001. A Moral Principles Framework for Human Resource Management Ethics. Human Resource Management Review, 11 (3), pp. 93-111. Schwartz, M. S., 2005. Universal Moral Values for Corporate Codes of Ethics. Journal of Business Ethics 59 (8), pp. 27-44. Snoeyenbos, M. and Humber, J., 2002. A companion to business ethics. London: Blackwell Publishing. Sonenshein, S., 2007. The Role of Construction, Intuition, and Justification in Responding to Ethical Issues at Work: The Sense making – Intuition Model. Academy of Management Review, 32 (1), pp. 1022-1040. Warren, S., 2012. Is BP An Ethical Company? [online] Available at: < http://wearedevelopment.net/2012/05/18/is-bp-an-ethical-company/ > [Accessed 26 October 2013]. Read More