BP’s Poor Code of Ethics
Poor implementation of their code of ethics led to preventable mishaps such as the disasters in Alaska and Texas. Specifically, BP’s defensive approach towards stakeholder management led to lavish compensation for upper level management while creating hazardous working conditions for employees and a burden on all of society in the form of rising oil prices and environmental damage. BP has a poor code of ethics and you can clearly see that they do not follow it like they are supposed to. British Petroleum was founded in 1908 and since then has rapidly grown to become the eighth largest company in the world. However, as of late, BP has come under fire for several high profile disasters, including the Texas City refinery explosion and the Prudhoe Bay oil spill. In 2005, an explosion occurred at BP’s refinery at Texas City. Fifteen employees were killed and 170 were injured in a fiasco resulting in $1.6 billion in victim compensation and millions in fines. In January of 2007, former Secretary of State, James Baker, published the Baker Report, outlining BP’s failing safety standards as the reason for the incident. In March of 2006, BP faced yet another incident when its corroded pipeline in Prudhoe Bay spilled roughly 270,000 gallons of crude oil onto the Alaskan tundra.
The incident crippled its North Slope operations in the Prudhoe Bay field. Although it is alarming that the incidents occurred due to negligence as a result of BP’s defensive approach to stakeholder management and a poor implementation of their code of ethics, it is perhaps more disturbing that the company continues to employ this strategy in the face of severe public outrage and legal scrutiny. “We care deeply about how we deliver energy to the world. Above everything, that starts with safety and excellence in our operations” These are the first two sentences in BP’s policy titled “What we stand for.” Ironically, BP has been criticized widely for their safety standards and business operations. More specifically, the most well-known and devastating oil spill in US history is largely the fault of this powerful oil corporation. In response, BP implemented extensive recovery programs, but the damage had already been done. The environment, wildlife, and local economies of all of the states lining the Gulf of Mexico felt the consequences of millions of barrels of oil being released into the ocean. As a social science perspective, Donaldson’s ideas regarding corporate duties provide a basic means to assess BP’s ethicalness as a company in their actions leading up to and in response to the accident.
After BP’s oil drilling operations were widely blamed for the devastating 2010 oil spill in the Gulf of Mexico, the company invested large amounts of time and financial resources to maintain a strong public image, but failed to act as an ethically sound corporation. Although BP has made an effort to better the devastating situation for which they are at least partly to blame, it is still hard to consider it an “ethical” company. To act unethically is to disregard duties resulting in a threat to the welfare of those effected. It is easy to compare BP’s actions to Hartman’s assessment of Donaldson’s theories about rights and corporate obligations. Donaldson believes that duties can be divided into three categories: The duty to avoid depriving people of their rights, the duty to help protect people from such deprivation and the duty to aid those who are deprived. Regarding their efforts to help those affected by the Gulf spill, BP technically satisfies Donaldson’s third duty, even though it is not obligated to. Still, since environmental disasters are a common occurrence for BP, their efforts hardly fulfill the second duty, to help protect people from deprivation. In order to protect people from the deprivation that their actions repeatedly cause, BP needed to solve management and cost-cutting issues right after their first major disaster. Perhaps their newly implemented standards and safety precautions will prevent future spills, but BP definitely acted unethically by Donaldson’s standards prior to the Gulf spill. Overall, it is the publics’ responsibility to take action on the unethical behavior of BP and similar oil companies.
It is widely suspected that major oil companies act with profits in mind first, which seems to be the case with BP. The multiple environmental disasters linked to the company prove that BP is not fulfilling its duties as a corporation and therefore should be considered an “unethical” corporation. Furthermore, are their efforts to alleviate the impact on the area simply a strategy to trick the public into thinking they are an ethical company? From their description of the causes of the explosion on the corporate website, it seems as though this may be the case. BP provides only one small paragraph to explain what they did wrong using language like “hydrostatic control” and “blowout preventer equipment,” which the average viewer definitely would not being able to understand, but devotes seven extensive pages to explain everything they have done right since. Any “ethical” company would take responsibility following a devastating disaster like BP’s Deep-water Horizon oil spill.
Winkler, D. T., & Gordon, B. L. (2013). The Effect of the BP Oil Spill on Volume and Selling Prices of Oceanfront Condominiums. Land Economics, 89(4), 614-631. BOND, D. (2013). GOVERNING DISASTER: The Political Life of the Environment during the BP Oil Spill. Cultural Anthropology, 28(4), 694-715. doi:10.1111/cuan.12033 http://www.bp.com/en/global/corporate/sustainability/our–people-and-values/our-code-of-conduct.html http://www.bp.com/en/global/corporate/about-bp.html