Bp—Deepwater Horizon Case Study Ethics

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BP—Deepwater Horizon Case Study
INT1001 Study Skills Module
Reading and Writing Skills—Summative Assignment
Done by: Mew Hui Ying
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Date: 12 February 2013
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Industry: Oil and Gas
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Company: British Petrol

Contents Page No.

1. Introduction………………………………………………….…….3

2. The Case:
2.1 The Deepwater Horizon Explosion……………………..4 2.2 Key Stakeholders and their Involvement……………....5 2.2.1 Shareholders……………………………………..5 2.2.2 Government……………………………………....5 2.2.3 Fishermen, Activists and Environmentalists…..6

2.3 Ethics and Values……………………………………........7

3. BP’s Solutions and Responses…………………………………..8 3.1 Cleaning up……………………...………………………...8 3.2 Compensation and Restoration………………………….8 3.3 Training of Employees…………………………...……….9

4. Evaluation…………………………………………………………..10

5. Conclusion………………………………………………………….11

6. Sources…………………………………………………………..…12

1. Introduction
To businesses, ethics have always been a grey area. Whilst it is not proven to be profitable to display ethical behavior, the discovery of any involvement in unethical behavior will lead to dire consequences on the company. As such, unethical behavior may have been inherent in certain businesses, but with the changing business landscape, increasing numbers of such actions are now being exposed and campaigned against, making it a concern for businesses today.

Hence, in the light of Corporate Social Responsibility (CSR), this report will be focused on the analysis of the Deepwater Horizon oil spill. Using the incident as a case study, we will be looking at the case, analyzing the solutions undertaken by British Petrol (BP) and evaluating them. This will be done in light of BP’s code of conduct, with an emphasis on ethics.

2.1: The Deepwater Horizon Explosion
On the 20th of April 2010, the Deepwater Horizon oilrig owned by BP exploded and caught fire, causing the death of 11 workers and leaving a trail of damage to the surrounding environment in its wake. Two days later, it sunk, leading to the release of 4.9 million barrels of oil into the Gulf of Mexico (Jarvis, 2010). This occurred due to a failure in the cement job at the bottom of a well, which was installed to prevent a blowout. BP then took a further 3 months to repair the broken well and halt the flow of oil (Read, 2011).

In the aftermath, BP had to fork out $4.5 billion for criminal charges, (CBS News, 2012). The oil spill had spread 3850 squared miles and affected coastlines of Louisiana, Mississippi, Albania and Florida (Read, 2011). 4768 dead animals consisting of sea turtles and birds were found, and the fishing industry was affected by an estimate of $2.5 billion (Jarvis, 2010). Furthermore, BP’s top managers were accused of receiving extravagant bonuses (Webb & McVeigh, 2011). In summary, it was a costly disaster for BP, with negative impacts on the environment and their stakeholders.

2.2 Key Stakeholders and their Involvement
In this accident, many groups of people were affected in various ways. Three main stakeholders involved were the company’s shareholders, the government and the fishermen.

2.2.1 Shareholders
Flowing the explosion, BP’s shares dropped by 54%, resulting in a loss of $105 billion in share value (Jarvis, 2010). This greatly impacted BP’s financial status, as shareholders are vital to the financing of businesses. Share prices have been falling since the explosion, and have not returned to the original value before the incident (Read, 2010). Dividends were also not given out that year (ibid). As such, BP had to take measures to regain shareholder confidence. This incident also led to the resignation of BP’s Chief Executive Tony Hayward.

2.2.2 Government
As the oil...
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