The oil disaster in the Mexican Gulf was one of the most significant tragedies in the United States that affected different people and corporations. It also provoked various discussions on ethics of the company involving politics and ordinary citizens in the argument. Moreover, the elimination of this accident was not on the proper level, and, therefore, the US government has constantly criticized the process and appealed to the court. However, British Petroleum (BP) itself has lost a lot of money and prestige through its provocative statements that ignore ethical standards. This paper suggests that the Deepwater Horizon crisis indicated the gaps in the ethical codex including corporate irresponsibility and false information, which then were fixed by the company for its future economic development and international reputation.
Deepwater Horizon Crisis
The most momentous industrial oil disaster in human history occurred on April 20, 2010. From this day, millions gallons of oil licked into the sea from the well, causing not only an ecological disaster but also defining different business and social interests. Consequently, the accident killed 11 people who worked on the platform at the time. Within five months, about 800 million gallons have been in the sea near the coasts of the United States, affecting the regional tourism and economy of the country (Gannon 2). At the same time, the British financial sector was also damaged losing its reputation at the international market. The price of shares had initially decreased to 55 percent, dropping to the price of 27 dollars per share (Gannon 3). In addition, it also touched the issue of security and geopolitics; and the reaction to the crash was different but mostly alarming since it touched interests of many influential countries involved in the oil business.
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The reaction of society was too sharp, which condemned the management for negligence and inevitable loss to the ecosystem. In this sense, 81 percent of American citizens perceive disaster in a negative light, which is also supported by President Barack Obama who accused the CEO of irresponsibility and lack of professionalism (Gannon 8). The users of Facebook tried to boycott BP, gathering supporters from all corners of the world. They wanted the company to stop its policy. It happened because BP did not follow the environmental standards, thus damaging the ecosystem in the Mexican Gulf. As it was stated, “an anonymous activist has joined the fun by establishing a fake BP Twitter account called @BPGlobalPR and started sending out messages about the Gulf oil spill to Twitter. A month after the explosion, @BPGlobalPR had 190,035 followers while the BP account, while @BP_America had only 18, 826 followers” (De Wolf and Mejri 48). Such active users from the social networks showed their concern for the incident, forcing the company to disclose more facts about the disaster.
Meanwhile, PB also created their platforms on Facebook, Twitter, and Flickr for a permanent notification about the process of clearance the spill. It enabled people to communicate with BP and to involve into the initiative of the company. At the same time, BP published their official document, explaining their vision of the situation. The internal investigation of the accident on the Deepwater Horizon platform showed that the engineers incorrectly interpreted the data about pressure that indicated that the explosion was inevitable. Making the wrong conclusion in the course of checking the stability of oil well, the BP workers tried to replace the mud with seawater. In fact, the drilling mud is heavier than oil and gas, and, as a result, water could not prevent the leakage of natural gas. Therefore, it penetrated into the hole and climbed up to higher levels where it caused an explosion.
In contrast, the company Transocean accused BP that it did not give the information on investigation in a form of an official letter. The paper argues that BP had data that could establish the exact cause of the accident that led “to the tragic death of 11 people and pollution of the Gulf of Mexico” (Gannon 25). The letter supposed that the refusal of BP to provide certain documents prevents conducting a proper investigation by Transocean. As a result, the company had no possibility to explain the bereaved families about the accident at the Deepwater Horizon oil platform. The representatives of BP, in their turn, stated that the allegations of Transocean are baseless and considered them as a “publicity stunt”, by which the company tried to distract public opinion from its role in the incident (Khatchadourian 39). Associated Press noted that BP and Transocean waited for the long trials where they decide what side is guilty, and, accordingly, what compensation it should pay to all injured parties (Gannon 41). Hence, the relatives of the victims, the organizations, and the others who were involved in the disaster filed more than 200 lawsuits in the US courts, trying to achieve justice in the case.
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It is important here that the company already had a negative reputation by constantly insulting the members of wealthy families, having serious problems with production, ignoring the comments on the favorable conditions for the environment, and repeatedly pouring oil into the ocean. As a result, the society was increasingly dissatisfied with such actions that gradually affect the development of the economic sector. Nevertheless, the company was able to restore its authority in such a difficult situation, clearing the oil spill in the gulf and acting as a sponsor during the 2012 London Olympic Games (Gannon 21). Moreover, BP was the second most popular brand among the audience. In this case, the company has spent a significant amount of money in order to eliminate the disaster and improve its reputation. However, it is still associated with the biggest catastrophe after the Chernobyl.
Identify the Ethical Issues Involved
The main ethical problem is that the company did not want to provide full information about the crisis while hiding the true motives and causes of business. The company used the fact of their policy as a cover, ignoring more important issues such as social security and stability. Accordingly, many people wanted to have a complete picture of the incident, not just the controversial and hypocritical facts from the management. In fact, the managers always gave controversial information after the disaster since the company could not choose the optimal strategy to minimalize their financial losses in the market (Khatchadourian 38). Hence, it specifies that they did not care about the ethical codex as well as the public interests and ecological environment, saving mostly their own reputation and finances. Despite this, the media and society forced the company to compromise and to tell the real causes of the disaster.
Another ethical problem was that the company blamed only its employees in their negligence and carelessness that led to the explosion. In reality, there were enough facts to which workers did not have any connection since only BP itself could fix most of the problems. After the thorough investigation by experts and journalists, they found that the company violated at least seven federal regulations, still not recognizing them publicly. For example, only one barrier was on the oilrig, which was insufficient for such a type of work (Khatchadourian 41). Moreover, the negative tests indicated the unreliability of the platform, but BP ignored these critical parameters. Therefore, it indicates the indifferent attitude of BP to the possible effects of its activities. It means that the company was more interested in the profit than in the lives of people and the environment. In this case, Khatchadourian explains that the company’s reaction was chaotic, driven “by corporate avarice, lacking in urgency, and at times willfully negligent of the problem’s scope” (37).
As a result, the main problem was BP’s irresponsibility for the incident. During the crisis, the company was looking for those persons who could be guilty for this tragedy blaming the workers and the providers, but it never took personal responsibility. In fact, BP had no crisis management at the time of the tragedy, which demonstrates its frivolity for such cases one more time because it could not coordinate actions in the early days. Perhaps, if BP had such a plan, the incident would be dealt with much better. Moreover, the company was slow in applying their efforts to clean the region of Mexican Gulf from oil because it required a lot of resources. As a result, BP’s ethical irresponsibility for its actions has transformed into the indifference to the ecosystems and the people from the neighboring states. It is not surprising that almost all stakeholders decided to convict the company.
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The following groups were involved in the crisis: the company itself, the employees on the oil rig, the investors, the US government, the researchers, and the Gulf Coast residents. Each of the stakeholders has their own interests because their lives depended on the activity of BP. They also proposed different ethical issues that have influenced the trial against the company in 2013.
The company is the third world leader that has operations on six continents. It does its business in over 80 countries, creating a powerful economic net. The main headquarters is located in London, and the operations centers are in the US. The main objective of the company is to provide energy for customers to make everyday life easier. In this context, the company was the central stakeholder in the incident because it lost both billions of dollars and international prestige. The company is also interested in paying compensation the victims because they demanded justice (Khatchadourian 42). Furthermore, BP should restore the quality of work on other platforms, including all tests and criteria that were ignored earlier. Although the incidents have occurred within the company previously, this case was the most global, touching the interests of many other stakeholders.
In addition to the company, the first interested stakeholders were the workmen on the platform itself. By the time of the explosion, 126 people worked there, and the rescuers evacuated only 115 of them. The coast guard spent three days finding these 11 people, but none of them was found (Gannon 2). The employees are the dominant persons in this case since they were at the epicenter of the disaster, thus being not immune to that turn of events. Moreover, the company did not support them in this situation because it considered them to be guilty in the tragedy. Hence, the workers needed social and legal support in particular to establish the truth.
The investors and businessmen are also stakeholders in this case because they invested their money in the company. Moreover, many of them belong to different types of work, from the safety of oil transportation to the process of monitoring. For such people, BP was the only way of income, and the future reduction in promotional prices has led to a bankruptcy of many corporations. In this case, tourist-dependent businesses and communities were also one the most interested parties since their operations completely depended on flora and fauna.
The US government was also interested in the crisis because the progress of the current disaster events depended on its reaction. The position of Barack Obama was clear: he strongly denounced the company and promised to facilitate a fair investigation. In this case, he said: “This is the largest response to an environmental disaster of this kind in the history of our country” (Khatchadourian 37). Such reaction was present because the Gulf Coast residents have been affected from the disaster; thus, their lives depended on the region. The government also strongly condemned the company in the context of ecology and the lack of information about the incident (Gannon 2).
The researchers were also one of the stakeholders in the disaster. They assessed the consequences of the event for the environment and society. The biologists and zoologists criticized the consequences of the explosion in particular because many species in the Gulf of Mexico were irretrievably infected after the disaster. More than 400 species were in danger, and some were of them on the verge of extinction (Khatchadourian 42). The microbiologists also criticized the emergence of new bacteria that threatened marine fauna and residents of the southern states. According to the public report, different microbes consumed different compounds of oil (“Public Report”). However, the experts have suggested that the increasing of bacteria amount could lead to health problems. Marine toxicologist Rica Ott noted that the genetically modified bacteria for better absorption of oil could cause an epidemic in the region (Gannon 27). At the same time, the economists and sociologists cited the data about the working class, which has lost the opportunity to fish in the coming years. They counted how many millions of dollars the company must pay for compensating these losses.
In this sense, the shareholders of the company, where the main plaintiffs were the pension funds of New York and Ohio, filed claims for the financial compensation of drilling in the Gulf of Mexico. Therefore, the residents on the Gulf of Mexico were the stakeholders who relied on this region in terms of earning money for their families. There were mostly the fishermen from Louisiana, Mississippi, and Florida, who were affected by the disaster. As a result of the incident, the ecosystem was contaminated or even destroyed, so the region was frozen for the coming years.
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My personal assessment of the situation cannot be completely unbiased because I care about both sides of the situation including ecosystem and inhabitants of the coast. In 2015, the official report of the company stated that they put a lot of efforts to completely empty the ocean (“Public Report”). However, the report does not mention how many animals were killed by the disaster since no one can count and publish this information. Moreover, the oil spill also affected the flora because the latter is particularly vulnerable to such a disaster. I cannot imagine if there is any life at the epicenter of the oil spill. In fact, no possible method can clear the ocean from oil; thus, it will take years for a complete restoration of the current ecosystem. The U.S. Fish and Wildlife Service stated that 32 National Wildlife Refuges are in a dangerous situation where many populations of species are under the threat of significant reduction or even mutation (Gannon 42).
I also care about the common people who depended on the ocean, namely about the physical health of the children near coastline. Even if the territory would be completely restored, many people will not trust the product because they associate it with the polluted area. As for the tourism industry, it also should change their policy and reduce prices, because no one wants to visit places where one of the most significant disasters in the history had taken place. The real estate prices also reduced in the Gulf of Mexico for the same reason, and the whole territory has therefore a negative reputation among potential buyers. Despite the fact that the state partially compensated their losses, they are equally victims of the disaster. This could be avoided if the company had been more attentive to its internal security and ethics.
Delineate (and/or Create) Alternative Courses of Action
There are several alternative courses in this case. The first possible scenario is that BP responds quickly to the disaster while not seeking for a scapegoat in this situation or giving ambiguous information. It openly declares that it committed a mistake though the negative tests have warned of the possibility of disaster. The next step is the official statement from its leadership that they will do everything possible to eliminate the disaster involving different techniques and methods. Particular attention is paid to the development of the ocean life renewal including a long-term plan that is open to most people in the organization’s official site. The company agrees to monitor the situation in the Gulf of Mexico and on its oil platforms in particular. In addition, the company promises to build a channel to get all the requirements of residents in this case. A particular point of the company is financial, psychological, medical, and social support of the residents living along the coastline. Therefore, this scenario refers to utilitarianism because BP cares how its activity connects with the idea of utility.
The negative scenario is that the company conducts a detailed examination of the tragedy and proves that it has done everything right. It is egoistic approach that reflects only personal interests in this case. BP finds evidence of negligent actions of its workmen. At the same time, the company makes a noble gesture, giving a significant compensation to relatives of the victims and showing its respect for their work. Then, it also sues the owners of the platform, which did not follow the safety standards when building this object. The basic idea is that the company is trying to buy time to decide for themselves how to proceed in the future. In fact, this strategy was partially realized in the early stages of the conflict, but it was abandoned when BP began to lose credibility among the citizens and partners.
However, there is a possible “wild” scenario where the oil company stops its activities, loses lawsuit court, and gives all the money to the environment. This option shows the idea that social and ethical responsibilities mean more than income and power. In addition, the company disclaims its own destructive activities investing millions of dollars into alternative energy. For example, this may be the development of light energy that will replace the need for oil. Thus, it is a good example for other companies which activities are destroying the environment.
Assess the Way the Alternatives will Affect Stakeholders
In the first scenario, BP will be involved into the rehabilitation of the area by promoting safe seafood. The company will cooperate with the government on building the region and paying attention to the needs of residents. For example, it will create conditions for rehabilitation of children who were victims of the incident. At the same time, it will support the researchers in their efforts to rebuild the ecosystem, saving various species of flora and fauna. This positive scenario will protect the company from huge losses and amoral statements that were permanently present throughout the story. However, at the same time, it is an unprofitable step for the company since it has harmful financial consequences. In contrast, such alternative way determines beneficial results for the residents since BP saves them from poverty. However, there is a possible conflict of interests, because each of the residents will request for their own compensation that would create a competition between them. Moreover, this can lead to financial manipulation and corruption.
As for the negative scenario, it will have possible negative consequences for the workers and BP itself. This will lead to the corporation’s complete isolation in the international market because no one wants to deal with the controversial company. Eventually, this will cause financial poverty and also affect many people. It is possible that the company will break the law because of the following reasons: falsification documents, manipulation of judges, and refusing to clean the region. This is one of the worst scenarios. In contrast, the “wild” program will satisfy the stakeholders, namely the ecologists, the residents, and the state. It will have the negative results for the company in the commercial context but, at the same time, create its positive reputation as one of the most altruistic corporations in the world.
This issue requires the involvement of external consultants. First, I need to find a specialist in international economics (oil business), ethics (the issues of corporate behavior), and biologist/ecologist (the effects of the disaster for animals and plants). It is also important to involve professional lawyers who would explain in detail what steps the company did in order to hide the facts from the public. They will also explain what elements of the law BP violated in the process. It is equally important to use the official statements from various companies that blamed BP for faking the data. Next, it is also crucial to study carefully the official records of the company and compare them with the actual facts. To do this, I will go to the library where I can look to the authentic printed materials, which are not always present in the internet. At the same time, I will study the reaction of the media at that time, comparing it with the current publications and analytical papers and distinguishing facts from ideology/personal attitude. In this sense, the analytical articles are also important. However, it is not necessary if I will involve the specialists since they will provide essential information for the analysis. Perhaps, to be sure in some assumptions, I will do a short sociological study that will include my close friends being interviewed about their attitude to the incident and the specific applications that the company had made.
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Make a Decision
In conclusion, the overall situation of the explosion is not ethical because the company has not taken responsibility to this incident and, as a result, reacted negatively to the stakeholders. First, it persistently changed information and proposed the debatable facts indicating its desire to conceal the real motives. Second, BP has not developed a corporate ethics because it blamed the workers in the incident. It showed the company’s unwillingness to respond to crisis situations. Hence, the official version of the tragedy was the carelessness of the employees who made the fatal errors. Most importantly, the company tried to save the finances but not its reputation in the early stages. Therefore, it took many false steps, for example, it refused to explain how to eliminate the global catastrophe and regularly avoided taking strategic decisions. However, BP has attracted many resources for making a coherent plan and has partially corrected its image, although many researchers are still skeptical about the results.
I decide to use the first alternative because it has more perspectives in both ethical and economic contexts. If the company had constantly ignored the warnings from the world community, it would certainly be doomed to isolation and international condemnation. In fact, BP had already experienced the pressure from the American society, the President, the environmental community, the international business, and the law. All this led to the fact that it is better to spend millions than to lose billions. Obviously, such a strategy is not profitable because the company takes very uncomfortable steps for itself, namely spending money on building an alternative strategy, when it could develop the business and earn more money. However, in order not to lose the entire corporation, it is important to donate time and resources. If one takes into account the idea of a great restart and adjustment, it will have more beneficial effects than endless judicial decisions from which the company would never destroy the image of the initiator of the largest environmental disaster.
Generally, a long-term alternative scenario does not benefit the company since the restoration of the Gulf of Mexico requires years. In addition, it also allows competitors to use their own business for this time, taking oil more intensely. However, it is a chance to become better, especially in terms of corporate ethics. This could lead to a new level of evolution, particularly in the alternative forms of energy. It is possible, however, that all the decisions made will create new problems. Some of them are the company’s strategy aims to profit, including restoration of the authority, cleaning the ocean, serving the relatives and the residents, and a selfless sponsorship of fishing and tourism. Nevertheless, it has good consequences in a long-term perspective because the company gradually adopts another style. Moreover, it will now be ready for emergencies and respond to them within ethics and human values.