British Petroleum [Case Study : Deepwater Horizon Oil Spill]
- 1. by- Navitha Pereira Femina Dsouza Adarsh K V Ravi Shakti Ethics & Sustainability Deepwater Horizon Oil Spill BRITISH PETROLEUM
- 2. Environmental Business Ethics Environmental ethics is formally defined as the study of human interaction with nature. In a business sense, environmental ethics is concerned with a company's responsibility to protect the environment in which it operates. Public awareness of damage caused to the environment by human action has driven a demand for governmental regulations directly affecting the ability of businesses to conduct their operations. Corporate response to governmental regulation is a primary area of concern in environmental business ethics.
- 3. The Cause for Damage New Opportunities Sustainability Human Choices Business Realities 02 04 01 03 Causes
- 4. Animal Ethics Ethical questions about our treatment of animals arise in several different industries, such as agriculture, medicine, and cosmetics. This section addresses these questions because they form part of the larger picture of the way society treats all living things— including nonhuman animals as well as the environment. All states in the United States have some form of laws to protect animals; some violations carry criminal penalties and some carry civil penalties. Consumer groups and the media have also applied pressure to the business community to consider animal ethics seriously, and businesses have discovered money to be made in the booming business of pets. Of course, as always, we should acknowledge that culture and geography influence our understanding of ethical issues at a personal and a business level.
- 5. Ethical Responsibilities in the Employer-Employee Relationship • The employer-employee relationship should not be looked at simply in economic terms. It is a significant human relationship of mutual dependency that has great impact on the people involved. • A person’s job, like a person’s business, are highly valued possessions that pervasively affect the lives of the employees and their families. • With stakeholders everywhere, the relationship is laden with moral responsibilities.
- 6. Ethical Responsibilities in the Employer-Employee Relationship • It is not a question only of fair pay and good working conditions, there should be a real and enduring concern for the well-being of employees. • While the welfare of the company and other co-workers must remain the dominant consideration an ethical employer is willing to make decisions and implement policies in a manner that demonstrates a genuine concern, even when there are associated costs which impact profitability. Companies should be loyal to workers as well as shareholders/owners/themselves. Employers have a moral obligation to look out for the welfare of employees.
- 7. Ethical Responsibilities in the Employer-Employee Relationship • Employees also have moral obligations, and they go beyond giving a full day’s work for a full day’s pay. • Loyalty goes both ways. Employees have moral duties to the organization, co- workers, and customers. • If an employer were secretly to look for a replacement for an employee by conducting interviews behind the employee’s back, most employees would consider that an act of betrayal. Employees have obligations as well.
- 8. British Petroleum About the Company • Founded in 1909. • British multinational oil and gas company headquartered in London, England. • One of the world's seven oil and gas "supermajors”. • Sixth-largest energy company by market capitalization. • World's 12th-largest revenue turnover. • Vertically integrated company operating in all areas of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
- 9. Human Rights & Corporate Crimes • BP is the largest foreign investor in Azerbaijan, working in close collaboration with a dictator renowned for intimidating and detaining those who criticize his regime, where there are over 100 political prisoners. They turn a blind eye to the widespread human rights violations taking place under the Aliyev regime. • In Egypt, BP is one of the largest foreign investors in the country and works closely with Egypt’s dictators and repressive rulers, in order to secure new drilling deals and boost its profits. Disregard local opposition to its infrastructure plans. • Mexico is in a serious human rights crisis characterized by an extreme situation of violence and insecurity. BP works in ‘close collaboration’ with the Mexican government to pursue deep-water drilling in the Gulf of Mexico. • To extract gas in West Papua, BP works with the Indonesian government which continues to occupy West Papua and deny Indigenous Papuans the right to self- determination. West Papuans face widespread violence and repression, with the Indonesian government accused by some of genocide. Foreign media and human rights groups are banned from operating in West Papua. BP’s Friends: The regimes that violate rights
- 10. Human Rights & Corporate Crimes • In Colombia, BP made large payments to the Ministry of Defense, the army and the police in order to protect oil facilities. Multiple allegations have been made in the years since about the extent of BP’s involvement in human rights violations. • BP works in partnership with the state-owned oil company in Algeria, a company tarnished by a corruption scandal. Over the years, oil industry revenues have enabled the repressive operations of the military and police. Demonstrations remain banned in the capital city of Algiers. • While human rights defenders and journalists face repression in Angola, BP and its partners have made questionable payments to Sonangol – the national oil company headed by the Angolan President’s daughter – for a research centre that has never been built. BP’s Partners: The support that fuels oppression
- 11. Sea Gem Offshore Oil Rig Disaster 1965 Texas City Refinery Explosion 2005 Prudhoe Bay Oil Spill 2006 A History of Violations and Accidents
- 12. A History of Violations and Accidents Texas City Refinery Toxic Substance Release 2007 Caspian Sea Gas Leak 2008 Texas City Refinery Chemical Leak 2010
- 13. Deepwater Horizon Explosion and Oil Spill 2010 A History of Violations and Accidents
- 14. Deepwater Horizon Oil Spill • Explosion in BP operated Deep water horizon. • Explosion caused fire on the deck. • After 36 hours, it sank leaving the well unprotected. • It caused largest accidental marine oil spill of history. Largest Accidental Marine Oil Spill
- 15. Deepwater Horizon Oil Spill 210mn Gallons of Crude Oil 11 Killed 5600m Deep Well 16 Injured 87 Days 20 April – 15 July 2010 1600m Deep Water
- 16. Deepwater Horizon Oil Spill Violated federal regulations at that time : • Only one cement barrier. • Ignorance of negative tests, limitations of control machines. • No or little training about the rare dangerous case. • Failure to observe and respond to critical indicators. • Inadequate well control response. • Insufficient emergency bridge response. • No precaution for employees or state regulator. • Lack of compliance to safety standards or accepted industry practice. • Failure to take timely and aggressive well-control actions. • Failure to notify federal regulators of changes in drilling plans. What went wrong?
- 17. Deepwater Horizon Oil Spill Deepwater Horizon Rig operator Accused for failure of BOP and incorrect evaluation of negative pressure test results. Parties Accused Cementing Contractor Accused for weaknesses in cement design and testing, quality assurance and risk assessment. Nitrogen based cement used was blamed Principal Developer Macondo Prospect Accused for Cost Savings, poor safety operations, well design and decisions regarding testing procedures
- 18. Stakeholders that can affect or be affected by the organization's actions, objectives and policies. 01 03 05 Environment Employees BP CompanyInvestors Residents Government Impact on Stakeholders 02 04 06
- 19. Environment • Reduced marine oxygen levels. • Oil was found in many animals. • Mutated fish. • Dead dolphins, birds, turtles and fish. • Death of a Gulf coral community . • Tar balls found along the coast, coastal islands and marshes. • Death of tree and marsh grass. • Oil fell to the ocean floor - remained in the food chain for the long term. Impact on the Environment
- 20. Employees • 11 employees dead. • 108 workers affected by the toxic from oil and dispersant (to separate oil into droplets) in the clean-up effort. Impact on the Employees
- 21. Residents • Physical health symptoms among the children who lived in less than 10 miles from the coastline. • Commercial and recreational fishing affected. • Fishermen got much smaller amount of fish. • Seafood from the Gulf is not trusted by consumers though samples passed the test of contamination. Impact on the Residents • Many of the Gulf fisheries have collapsed. • Many people canceled their trip due to the spills. • Much lower revenue despite lower hotel rates, free service, changed cancellation policy from the hotels. • The real estate prices and a number of transactions in the Gulf of Mexico area decreased significantly. • Many people lost jobs and wages after the spill.
- 22. BP Company • The spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal payments cost a lot to the company. • Badly damaged image . • BP's stock fell by 52% in 50 days on the New York Stock Exchange. • 10 – 40% drop on sales. Impact on BP Company
- 23. Investors • Investors saw their holdings in BP shrink to $27.02, a nearly 54% loss of value in 2010 (New York Post) Impact on the Investors
- 24. Government • 3 years to investigate and then rule the case Deepwater Horizon oil spill. • Ban of offshore drilling in state waters. • Law amendment. Impact on the Government
- 25. Conclusion • BP can address issues of ethics and social reasonability by maintaining safety. • Safety is key social responsibility. • It will reduce environmental impact and threats to profitability. • BP lost billions. • Implementing simple strategies in safety, the disaster would not have happened. • BP actions and inactions resulted from negligence and, profit first and responsibility second. • Safety should be a number one concern for all enterprises as part of their social reasonability to society at large.
- 26. References • https://www.theguardian.com/environment/2015/jul/02/bp-will-pay-largest- environmental-fine-in-us-history-for-gulf-oil-spill • https://pagecentertraining.psu.edu/public-relations-ethics/ethics-in-crisis- management/lesson-1-prominent-ethical-issues-in-crisis-situations/case-study- tbd/ • https://en.wikipedia.org/wiki/BP#Violations_and_accidents • https://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/9680589 /A-history-of-BPs-US-disasters.html • https://sites.psu.edu/psy533wheeler/2016/10/01/cutting-corners-a-bp-case- study/ • https://cultureunstained.files.wordpress.com/2017/06/bad-company-bp- human-rights-and-corporate-crimes-culture-unstained-june-20171.pdf • https://www.thinkreliability.com/case_studies/deepwater-horizon-oil-spill/ • https://www.mcclatchydc.com/news/nation- world/national/article24589216.html
- 27. Thank You