Assessing the Effectiveness of Risk Control Initiatives in British Petroleum

The report highlights the failure of British Petroleum (BP) in generating and maintaining effective risk control initiatives, despite having a Code of Conduct that emphasizes protection of the environment and workplace safety. The analysis reveals that BP's management failed to comply with its own code of conduct, leading to the Deepwater Horizon crisis, which resulted in significant environmental damage and loss of life. Additionally, the report criticizes BP's communication strategy for lacking transparency, leading to mistrust among stakeholders. The study concludes that there is a need for BP to revise its codes of conduct to better align with industry standards and ensure compliance.

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Comparative Business Ethics & Social
Responsibility

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Executive Summary
The paper effectively analysis the effectiveness of the sustainability mechanisms of oil and
gas companies like British Petroleum (BP). The report also gains effectiveness in analysing
the feasibility of the code of conduct for the organisation in the light of the incidence of the
oil spill disaster along the Gulf Coast of Mexico. It reflects the historical association of
British Petroleum with that of non-ethical and criminal conducts like fraud, generation of
damage to environment and natural habitats and also causing the loss of lives and property.
Critical analysis is carried out in the report as to the right type of conduct of conduct that was
required to be put in place and also followed by the managers and staffs for avoiding the
incidence of such disastrous situations like the explosion of the oil refinery along the
Mexican Gulf. Absence of effective communication and transparency systems were also
highlighted for British Petroleum that affected its relationship with both the internal and
external stakeholder communities. Different sustainability procedures and initiatives in place
at BP were also highlighted in the paper. Along with the same other sustainability systems
like the requirement of BP to strictly adhere to regulatory and legislative standards and to
develop effective monitoring and supervising guidelines were stressed in the report. The
same would contribute in helping BP avoid the incidence of such fatal incidents like
explosion and leakage of oil pipelines and also develop its relationship with stakeholders.

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Table of Contents
Introduction................................................................................................................................4
History of BP and Questionable Conducts.................................................................................5
Evaluation of BP’s Efforts regarding Sustainability..................................................................6
Wind Energy..........................................................................................................................6
Solar Energy...........................................................................................................................6
Biofuels..................................................................................................................................6
Carbon Sequestration and Storage (CCS)..............................................................................7
Recommendations to BP........................................................................................................7
Potency of BP Code of Conduct and Ethics Initiatives..............................................................8
Conclusions..............................................................................................................................10
References................................................................................................................................12

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Introduction
British Petroleum (BP) operates as a multinational organisation operating in the oil and gas
industry and is headquartered in London. The company runs based on the collaborated efforts
of around 75,000 people that help in meeting the diversified energy needs of customers both
along the domestic and corporate front. Some key facts about BP are generated as follows.
(British Petroluem , 2017)
The report ideally aims in understanding the historical emergence of ethical misconducts
pertaining to BP. It also focuses on understanding and evaluating the sustainability practices
and code of conduct of the organisation in the face of potential environmental issues.

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History of BP and Questionable Conducts
British Petroleum is observed to bear a historical linkage with questionable conducts. The
company has a long history of being associated with different types of hazards both
environmental and also associated with that of failing to meet the rights and needs of
workers. Similarly, the oil and gas company also face potential litigation issues concerning
the generation of considerable amount of greenhouse gases in the atmosphere. History
reflects that from 2005, British Petroleum is the centre of ethical controversies owing not
only to the existence of different types of non-ethical conducts like fraud, generation
environmental and social degradation and also in affecting the natural and wildlife habitats.
The explosion of a refinery run by BP in Texas during 2005 killing around 15 individuals and
injuring around 170 people was termed guilty by the regulatory authority of the Southern
District in Texas for not complying with the Clean Air Act. The management of BP admitted
in a press meet that the company had rightly not complied with different regulatory
mechanisms concerning mechanical integrity and also generation of a safe start-up. BP thus
faced prosecution charges under the Clean Air Act that led to the closure of the Texas Unit
(Ferrell & Hartline, 2013).
In another case during the subsequent year during 2006, British Petroleum owing to its failure
to rightly respond to red flags that led to the leaking of the oil pipelines in Alaska leading to
the leaking of crude oil in the tundra region and the frozen lakes. The same required the
organisation to render millions of amount of fines to the different regulatory authorities
operating in the region. The leaking of the pipelines that led the company to pay large amount
of fines could have been easily avoided with a strong focus of the company’s management to
routinely check and clean the pipes. Again, the oil and gas company came into limelight
owing to its management being involved in an act of fraud concerning both mail and wire
fraud and also because of actively conspiring to violate the Commodity Exchange Act.
British Petroleum being guilty of such charges was again required to pay millions of dollars
in terms of fines to the regulatory authorities based in United States. The above facts
potentially indicate that BP has had a long history of not taking proper care and attention of
the needs and expectations of both the internal and external stakeholders (Ferrell et al., 2011).
BP in turn focused on Greenwashing its image through the generation of considerable amount
of investment regarding the development of renewable energy resources and also in
enhancing the level of sustainability through reduction of greenhouse gas emissions.

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Similarly, generation of effective stories to create a new reality than that reflected in terms of
evidences were also carried out by the organisation to project its environmental and
stakeholder friendly image before the public (Ferrell & Hartline, 2013).
Evaluation of BP’s Efforts regarding Sustainability
British Petroleum (BP) took its first step towards sustainability during 2005 with its initiative
of ‘going green’. Initially the sustainability initiative was undertaken by the company in
terms of generating a small investment of around $1.4 billion. It was however evaluated that
over the years the sustainability initiative of the company would gain needed importance.
Wind Energy
BP had installed around 500 Mega Watts of wind energy systems where around 432MW is
found to be operational. The Wind Energy came into operations from 2008 with collaboration
of BP with other wind farms like the Cedar Creek based in Colorado. The wind capacity
installed by BP is evaluated to meet the energy supply of around 6 million residences.
Solar Energy
BP focused on entering into agreements with large number of solar panel producing
companies based along different Asian economies. In United States, BP generates only
around 4MW of solar energy that helps in the running of Wal-Mart stores situated in
California. A larger part of the solar business carried out by BP is associated with the
European countries like development of two large solar power plants based in Spain that
helps in meeting the energy needs of million residences. Solar Cities are also being planned
by BP that helps in providing energy to around seven Australian cities. In terms of reducing
emissions of greenhouse gases, BP has developed a pump system run on solar energy situated
at Moxa Gas Field based in Wyoming. The running of the pumps reduces the chances of the
employees and the local communities from getting affected by emissions of greenhouse gases
(Ferrell & Hartline, 2013).
Biofuels
BP identifies Biofuels as a significant part of its renewable energy portfolio and thereby aims
for its continual development and growth for around two full decades. BP in its bid to
develop on its biofuel projects became one of the largest stakeholders in a bioethanol

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company based in Brazil, Tropical Energy S.A. The Brazilian company contributes in the
development of bioethanol products from sugarcane and thereby generates around 115
million gallons of bioethanol. Further, BP is also focusing on the development of a Special
Purpose Entity (SPE) in terms of teaming with a cellulosic ethanol company, Verenium
Corporation (Ferrell & Hartline, 2013).
Carbon Sequestration and Storage (CCS)
Regarding CCS, BP has focused on the development of the Salah Gas Field based in Algeria
that contributed in capturing and storing around 1 million tonnes of carbon dioxide gas from
the atmosphere. BO further aims in meeting its CCS objectives at Hydrogen Energy for
developing low carbon emitting power plants in regions like Abu Dhabi and California. BP
had also developed the BP Zhuhai Plant (BPZ) Plant that contributes in not only reducing
Carbon Dioxide emissions but also in limiting the employment of Liquefied Petroleum Gas
(LPG). From 2005, BPZ had contributed in reducing the carbon dioxide emission levels by
around 35 percent and reduction of LPG use by around 48 percent (Ferrell & Hartline, 2013).
Recommendations to BP
Despite the above sustainability activities undertaken by British Petroleum the oil and gas
company has lot to learn from the grave misconduct during 2010 leading to the explosion of
the oil well operating undersea and situated in the Mexican Gulf. The explosion led to the
killing of 11 crew members while rendering considerable damage on aquatic life and also to
other coast centred communities (Bredeson, 2012). The large scale spreading of oil on the
ocean floor caused the deaths of large number of birds, fishes, dolphins, turtles and shrimps.
The management of BP generated a large scale compensation fund of around $20 billion for
countering the mishap but the same failed to meet the sustainability requirements. The
explosion of the oil well caused the spilling of crude oil of over 134 million gallons that
affected the marine and wild life in the region (Freudenburg & Gramling, 2011).
In the light of the above issue, BP is required to develop on its regulatory standards
concerning that with protecting the regional environments from such emerging catastrophes.
The management of BP is required to enhance on its transparency parameters for generating
greater accountability towards its different stakeholders (Mauk & Metz, 2015). Similarly,
contingency planning systems are required to be developed by BP for both the Coast Guard
of United States and also the management of BP. British Petroleum is required to also

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develop on its spill response initiatives (Kramer & Pittinsky, 2012). BP is also required to
develop on its technology parameters regarding oil drilling and also work for the generation
of effective job training for the rig operators. The same would contribute in development of a
safer work environment for BP staffs operating in such offshore projects (Barnett, 2016). BP
as a potential client of Transocean situated in the Gulf of Mexico was required to effectively
oversee for generating precautions in preventing the emergence of disaster. It was later
observed that the disaster plan of BP contained a number of fallacies and was inadequate for
handling such contingencies. Thus, BP is required to continually monitor and develop on its
contingency and disaster framework to rightly handle such disastrous events like the
Deepwater Horizon Spill (Ferrell & Hartline, 2013).
Potency of BP Code of Conduct and Ethics Initiatives
British Petroleum is observed to have suffered from a long period regarding the issue of
ethical misconducts. The Ethics and Compliance Team in BP during 2005 potentially worked
in creating, publishing and also distributing the code of conduct for the company. The Code
of Conduct for BP is both available virtually and physically and can be effectively accessed
by the employees and staffs operating in the oil and gas organisation. British Petroleum being
a multinational firm has framed the Code of Conduct such that the same helps in uniting
individuals emerging from diverse backgrounds and ethnicities under universal standards
formulated by the organisation. The Code of Conduct was developed by the Ethical and
Compliance team as a one stop platform for helping in guiding the behavioural conducts of
employees. The code focused on addressing different issues ranging from health and safety to
financial integrity parameters and was observed as one of the potential mass communication
exercise undertaken by the organisation (Lustgarten, 2012).
The Code of Conduct in British Petroleum is evaluated to be inadequate in nature for
reducing the chances of incidence of disastrous issues like the environmental disaster that
happened during 2010 in the Gulf Coast. Further, the ethical codes of conduct for the
company to be effective in nature are firstly required to be comprehensive and integrated in
nature and also to be required to reflect the compliance of the upper management on
parameters associated to values, policies and also rules and regulations of the state and
region. Similarly, the viability and of the code of conduct in assessing and monitoring the
conducting of operations along risky areas is required to be carried out through the

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development and integration of a legal team. Regarding BP, the code of conduct for the
company however failed to significantly highlight the areas concerning increased risk along
the day-to-day operations of the company (Elkington et al., 2017).
Similarly, the code of conduct for BP also suffered for being not designed in an effective
fashion to resolve the emergence of ethical and legal issues concerning the conducting of the
daily operations of the firm. The Code of Conduct was also required to be developed for
helping both the managers and the staffs in British Petroleum to ideally deal with the
emergence of ethical issues. However, regarding BP no such evidence is gained where the
code of conduct was ideally communicated to the staffs and managers pertaining to different
departments for limiting the conducting of activities that would help in rightly reducing the
incidence of ethical issues. Again, the code of conduct generated at British Petroleum fails to
encourage the growth of whistleblowing practices in the organisation and neither generates
adequate measures for protecting the actions of the whistleblowers in identifying the
emergence of ethical misconducts within the organisation (Chandler, 2014).
The Deepwater Horizon Crisis associated to British Petroleum further reflects the failure of
the code of conduct of BP to make it ready for responding effectively to the crisis and also in
acting in a sensitive fashion in addressing the needs of stakeholders. It also reflected the lack
of transparency associated with both the internal and external communication practices of the
organisation (Elkington et al., 2017).
The Code of Conduct at British Petroleum was investigated to have failed in reducing the
incidence of decline of morality and ethics pertaining to the day-to-day operations of the
firm. A large number of complaints were observed to have been filed under the code of
conduct parameters of the organisation. The Code of Conduct is required to be effectively
revised for enhancing the parameters associated to safety in the workplace, reduction of
bribery and corruptive activities at the workplace and also for enhancing financial and moral
integrity (Brown et al., 2014).
Decline in the level of moral standards at BP’s workplace was also observed owing to the
growth in the number of employee complaints associated to the Open Talk program. The
increase in the number of employee complaints along the Open Talk platform rightly
indicated the failure in generating and maintaining effective risk control initiatives. It was
also observed that the code of conduct in BP was also not rightly followed in that the rates of
dismissals for violations of the code of conduct policies in the organisation were declining.

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The employees were also observed to fail to respond in an effective fashion to the survey
conducted regarding employee engagement to the code of conduct rules of the organisation
(Kossovsky et al., 2013).
The Code of Conduct in BP commits in generating protection to the environment and also
promoting workplace safety and enhancement of health standards of the employees while
also in generating a zero tolerance policy for emergence of any accidents at the workplace
and also at overseas research and drilling centres. The management of British Petroleum is
however criticized for creating stories such that the same helps in attaining public
legitimisation of the activities and incidents at workplace. Stories concerning the operations
in BP are identified to be increasingly associated with Greenwashing the image of the
organisation in the eyes of the public (Appleton, 2013). Large numbers of storytellers are
employed that contribute in the generation of different antenarratives that contribute in
generating an interpretive reality of the different incidents happening at the workplace of BP.
This practice is observed relating to the generation of counter story telling in case of the oil
spill disaster along the North Slope of Alaska. Each of the different counter stories rendered
by the BP staffs tends to conceal the reality of the event concerning the scandal associated
with the inspection of pipeline and also the delaying activities of the organisation. It thus
helps in concealing the failure of BP’s efforts in protecting the natural environment as stated
in the code of conducts (Appleton, 2013).
Conclusions
The analysis carried out in the report potentially reflects that despite the existence of a
number of sustainability initiatives conducted and maintained by British Petroleum, the oil
and gas company however accounted for a large scale disaster along the Gulf Coast of
Mexico. The disaster was caused primarily owing to the absence of effective monitoring and
reporting mechanisms in place and also the failure of British Petroleum in potentially
responding to the crisis. Further, absence of effective communication carried out by the
company with both its internal and external stakeholders were found to be lacking that in turn
accounted for loss of lives and also affecting marine and wild life on a wider scale. The
Deepwater Horizon Crisis of British Petroleum also reflected its leniency in aptly complying
with the regulatory standards both associated to the industry and also along the different
regions. The analysis also reflected that the codes of conduct designed by British Petroleum

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were not rightly followed by the management and the staff communities in the organisation.
The same accounted for the emergence of such large scale destruction affecting both life and
property. Existence of proper whistleblowing policies were observed along with the practice
of the company in not removing staffs that were found guilty in not following the codes of
conduct. The same reflects the need for the codes of the conduct to be aptly revised such that
they meet the needs of the industry.

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References
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Lustgarten, A., 2012. Run to Failure: BP and the Making of the Deepwater Horizon Disaster.
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