BRITISH PETROLEUM
CASE STUDY
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.
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.
Ethical Responsibilities in the Employer-Employee Relationship
Employees have obligations as well.
• 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, coworkers, 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.
About the Company
British Petroleum
• Founded in 1909.
• British multinational oil and gas company
headquartered in London, England.
• One of the
"supermajors”.
world's
• Sixth-largest energy
capitalization.
seven
oil
company
by
and
gas
market
• 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.
Human Rights & Corporate Crimes
BP’s Friends: The regimes that violate rights
• 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 selfdetermination. 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.

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 ofAlgiers.

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.
Human Rights &
Corporate
Crimes
BP’s Partners: The support that
fuels oppression
A History of Violations and Accidents
1965
Sea Gem Offshore Oil
Rig Disaster
2005
Texas City Refinery Explosion
2006
Prudhoe Bay Oil Spill
A History of Violations and Accidents
2007
Texas City Refinery
Toxic Substance Release
2008
Caspian Sea Gas Leak
2010
Texas City Refinery
Chemical Leak
A History of Violations and Accidents
2010
Deepwater Horizon Explosion
and Oil Spill
Largest Accidental Marine Oil Spill
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.
Deepwater Horizon Oil Spill
210mn
11
Gallons of Crude Oil
Killed
87 Days 16
20 April – 15 July 2010
Injured
5600m 1600m
Deep Well
Deep Water
Deepwater Horizon Oil Spill
What went wrong?
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.
Parties Accused
Deepwater Horizon Oil Spill
Deepwater Horizon Rig
operator
Principal Developer
Macondo Prospect
Cementing Contractor
Accused for failure of
BOP and incorrect
evaluation of negative
pressure test results.
Accused for Cost Savings,
poor safety operations, well
design and decisions
regarding testing
procedures
Accused for weaknesses in
cement design and testing,
quality assurance and risk
assessment. Nitrogen based
cement used was blamed
Impact on Stakeholders
Environment
Stakeholders
01
that can affect or be affected
by the organization's actions,
objectives and policies.
02
06
03
Government
05
Investors
04
BP Company
Employees
Residents
Impact on the 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.
Environment
Impact on the Employees
• 11 employees dead.
• 108 workers affected by the toxic from
oil and dispersant (to separate oil into
droplets) in the clean-up effort.
Employees
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.
• 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.
Residents
Impact on 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.
BP Company
Impact on the Investors
• Investors saw their holdings in BP shrink to $27.02, a nearly 54% loss of
value in 2010 (New York Post)
Investors
Impact on the Government
• 3 years to investigate and then rule the case Deepwater Horizon oil spill.
• Ban of offshore drilling in state waters.
• Law amendment.
Government
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.
Videos

https://www.youtube.com/watch?v=FCVCOWejlag

https://www.youtube.com/watch?v=-QQ-_T5