Corporate Responsibility and Governance- PDF

Running head: Corporate Responsibility and Governance
Corporate Responsibility and Governance
-Oil Spill at the Gulf of Mexico
Name of the Student
Name of the University
Author Note

1Corporate Responsibility
Gulf of Mexico Oil spill:
Deepwater horizon was a semi submersible, ultra deepwater, dynamically positioned,
offshore rig under the ownership of Transocean. On 2009, they drilled the deepest well
(10,683 meters) in the Gulf of Mexico. On 20th April, 2010, during the drilling for Macondo
Prospect, an explosion occurred at the rig due to a blowout, as a result of which 11 crew
members were killed and created a ball of fire that was visible from 64 Km. The fire was
impossible to control, and in two days it sank, and the well kept leaking oil from the seafloor,
leading to one of the largest oil spills. This caused a massive environmental damage due to
the oil entering the marine ecosystem. The rig was under lease to British Petroleum (BP) till
2013 and after investigation BP was charged with negligence and willful misconduct which
made this accident possible (Brennan, 2013; Goldstein et al., 2011; Cleveland et al., 2010;
BP, 2010).
Ethical Issues involved from the perspective of BP and other stakeholders
There are several ethical concerns related to the event. Apart from the 11 casualties in
the accident and additional 17 were injured and almost 5 million barrels (about 780,000 cc) of
oil was leaked into the ocean that covered an area of 176,000 sq km (BP, 2010; Dadashzadeh
et al., 2013; Eckle et al., 2012). The waters were consequently closed to fishing to prevent
contamination. This additionally led to loss of several jobs at the fishing industry. The spill
also caused many whales and dolphins being stranded, and the deaths of thousands of turtles,
birds and mammals who got covered in the oil from the spill (Lauritsen et al., 2017; Venn-
Watson et al., 2015; Beyer et al., 2016). The brown pelican which was declared as an
endangered species, was one of the worst affected by the spill (Walter et al., 2014; Wallace et
al., 2017).

2Corporate Responsibility
First ethical concern is the magnitude of damage caused due to the oil spill on the
marine habitat and the effect on wildlife in the Gulf of Mexico. For several years, BP also
refused to take full responsibility of the accident, and instead blamed others. However, it was
acknowledged by BP the different types of species being affected by the spill, and soaked in
the oil and the natural habitats being destroyed because of the oil spill. Also, the effects of the
agents used to disperse the oil on the marine life were also not analyzed in detail before being
used at the site, which shows a significant form of negligence towards environment. The
dispersants breaks down the oil droplets into smaller droplets, which helps it to mix with
water more easily. In the deepwater Horizon, more than 1.4 million gallons of different types
of dispersants used. These can also enter the food chain, and have potential adverse effects on
the wildlife (Beyerb et al., 2016).
The second ethical concern was the effect on the various stakeholders due to the oil
spill. The Fishing industry was affected, since the area of the oil spill soon became out of
bounds for any fishing activities, and hence caused loss of jobs. The seafood industry
similarly got affected due to this, as the fishing restriction meant they had to look for other
fishing areas. Moreover, the fear of contamination of the food and its subsequent health risks
also affected the fishing and seafood industry as well the consumers (Alvarez et al., 2015;
Incardona et al., 2014). The oil spill also destroyed the aesthetic value of the place, with large
swathes of oil deposits in the region, which repelled tourists and visitors. This was a major
disadvantage to the tourism industry. These aspects also affected the local communities
adjoining the affected coast (Shultz et al., 2015).
The third ethical concern is the loss of lives and disabilities caused due to the accident
and safety concerns of those involved in its cleanup. Any form of human casualty and threat
to human wellbeing is an ethical concern of any organization. Ensuring the full safety of the
workers is one of the prime responsibilities of the organization (Pangborn et al., 2018).

3Corporate Responsibility
The fourth ethical issue is regarding the circumstances that can support a government
or a private company in limiting what data is made accessible to the public. This also raises a
question about the level of access the press should have on the site, was BP valid in limiting
access of the press as well as independent scientists and engineers to the site to preserve its
image, to what extent does the government has obligation to intervene to ensure public access
to information that they are entitled to know and what information is the public entitled to
(Thompson, 2014).
Critical analysis of the key decisions in the event:
After the explosion of the Deepwater oil rig in the Gulf of Mexico, BP struggled to
stem the oil leak due to which the oil got spread ashore to the Gulf Coast and the white sand
beaches of Florida. Since the accident, several wrong decisions were made by BP, which is
discussed next:
On April, the rig was drilling about 1,525 meter of water, and already pushing the
boundary of deepwater drilling technology. This decision put at risk the well being of the oil
rig crew as well as the entire project at stake. The operator of the rig said that they had to
prior warning before the explosion occurred, while BP blamed failed safety systems and the
irresponsible behavior of the contractors which caused the explosion. It was also claimed that
the safe well requirements were not properly analyzed using the cement modeling software,
as a result of which the number of stabilizers required for the well was miscalculated. This
accident could have been avoided is the construction of the well was first tested before being
actually performed on the oil rig. However, it was not performed to cut the costs of the
operation (Brennan, 2013).
In the attempt to prevent further damage, BP used undersea robots for stopping the oil
spill by activating the blowout preventer, however the attempts failed and the leakage of oil

4Corporate Responsibility
continued. In the subsequent hearings, BP, Transocean and Halliburton blame each other for
the disaster, pointing negligence towards their duties. The decision of BP to use a wide
variety of dispersals of oil before testing their effect on biological life was also created a
significant impact on the ecosystem and the marine food chain (Beyer et al., 2016).
BP was also scorned upon due to the lack of responsible action to mitigate the
problems due to oil spillage instead of blaming other companies. It would have been useful
for BP to allow external scientists and reporters to have access to the site to perform
independent studies and report on them, which could have informed the key decisions taken
by BP. Reporting the place as unsafe and preventing public access to information. Also, it
was important for BP to promptly seal the well after the accident, to prevent further spillage
of oil, instead of attempting a temporary solution to the problem, which caused further
spillage of oil (BP, 2010; Brennan, 2013).
In this context, I believe the best decisions would have been to properly check and test
the drilling process and safety issues before extending the well. The attempt to extend the
well beyond the recommended limit was a major hazardous decision. Similarly, immediate
steps to prevent spillage of oil, by completely sealing of the damaged well should have been
made the main focus. I believe BP should have had a significant focus to address the concern
of environmental disaster caused due to the spillage, instead to preventing further losses.
Conclusion
It can thus be concluded, that the Deepwater Horizon was an accident which could
have been avoided, if proper precautionary measures being taken, and its environmental
impact could have been minimized by timely action by the involved companies. It is
important that factors such as the ecological impact, loss of l\human as well as animal lives,
and its effect on the stakeholders be properly considered while making the decisions. Since

5Corporate Responsibility
accidents in oil rigs can impose mortal risk on the workers, have immense environmental
impacts, affect the livelihood of many others, it is vital that the most stringent form of
regulations and punitive measures for non compliance are implemented by governments to
prevent any such incidents in the future.

6Corporate Responsibility
References:
Alvarez, S., Larkin, S. L., Whitehead, J. C., & Haab, T. (2015). Corrigendum: A revealed
preference approach to valuing non-market recreational fishing losses from the
Deepwater Horizon spill. Journal of Environmental Management, 150, 516-518. DOI:
https://doi.org/10.1016/j.jenvman.2014.06.031
Beyer, J., Trannum, H. C., Bakke, T., Hodson, P. V., & Collier, T. K. (2016). Environmental
effects of the Deepwater Horizon oil spill: a review. Marine pollution bulletin, 110(1),
28-51. DOI: https://doi.org/10.1016/j.marpolbul.2016.06.027
BP (Firm). (2010). Deepwater horizon accident investigation report. BP. Url:
https://www.bp.com/content/dam/bp/pdf/sustainability/issue-reports/
Deepwater_Horizon_Accident_Investigation_Report.pdf
Brennan, L. C. (2013). Gulf Oil Spill. ABDO Publishing Company. Url:
https://books.google.co.in/books?
hl=en&lr=&id=0HB3AgAAQBAJ&oi=fnd&pg=PP1&dq=Brennan,+L.+C.+(2013).
+Gulf+Oil+Spill&ots=AFt1xEptUK&sig=zxaCRi4PDz1CTbDxacPKtq4c23Q#v=one
page&q&f=false
Cleveland, C., Hogan, C. M., & Saundry, P. (2010). Deepwater Horizon oil spill. The
encyclopedia of earth. Url: http://tos.org/oceanography/article/deepwater-horizon-oil-
spill-a-review-of-the-planktonic-response
Dadashzadeh, M., Abbassi, R., Khan, F., & Hawboldt, K. (2013). Explosion modeling and
analysis of BP Deepwater Horizon accident. Safety science, 57, 150-160. DOI:
https://doi.org/10.1016/j.ssci.2013.01.024

7Corporate Responsibility
Eckle, P., Burgherr, P., & Michaux, E. (2012). Risk of large oil spills: a statistical analysis in
the aftermath of Deepwater Horizon. Environmental science & technology, 46(23),
13002-13008. DOI: 10.1021/es3029523
Goldstein, B. D., Osofsky, H. J., & Lichtveld, M. Y. (2011). The Gulf oil spill. New England
Journal of Medicine, 364(14), 1334-1348. DOI: DOI: 10.1056/NEJMra1007197
Incardona, J. P., Gardner, L. D., Linbo, T. L., Brown, T. L., Esbaugh, A. J., Mager, E. M., ...
& Tagal, M. (2014). Deepwater Horizon crude oil impacts the developing hearts of
large predatory pelagic fish. Proceedings of the National Academy of Sciences,
111(15), E1510-E1518. DOI: https://doi.org/10.1073/pnas.1320950111
Lauritsen, A. M., Dixon, P. M., Cacela, D., Brost, B., Hardy, R., MacPherson, S. L., ... &
Witherington, B. (2017). Impact of the Deepwater Horizon oil spill on loggerhead
turtle Caretta caretta nest densities in northwest Florida. Endangered Species
Research, 33, 83-93. DOI: 10.3354/esr00794
Pangborn, J. Z., Moore, K. J., Santiago, K. M., Trapido, E. J., Subra, W. A., Fleming, L. E.,
& Caban-Martinez, A. J. (2018). 613 Occupational health and safety perspectives of
louisiana first responders involved in the 2010 deepwater horizon oil spill. DOI:
http://dx.doi.org/10.1136/oemed-2018-ICOHabstracts.535
Shultz, J. M., Walsh, L., Garfin, D. R., Wilson, F. E., & Neria, Y. (2015). The 2010
Deepwater Horizon oil spill: the trauma signature of an ecological disaster. The
journal of behavioral health services & research, 42(1), 58-76. DOI: 10.1007/s11414-
014-9398-7

8Corporate Responsibility
Thompson, D. F. (2014). Responsibility for failures of government: The problem of many
hands. The American Review of Public Administration, 44(3), 259-273. DOI:
doi/abs/10.1177/0275074014524013
Venn-Watson, S., Colegrove, K. M., Litz, J., Kinsel, M., Terio, K., Saliki, J., ... & Pitchford,
J. (2015). Adrenal gland and lung lesions in Gulf of Mexico common bottlenose
dolphins (Tursiops truncatus) found dead following the Deepwater Horizon oil spill.
PLoS One, 10(5), e0126538. DOI: https://doi.org/10.1371/journal.pone.0126538
Wallace, B. P., Brosnan, T., McLamb, D., Rowles, T., Ruder, E., Schroeder, B., ... &
Wehner, D. (2017). Effects of the Deepwater Horizon oil spill on protected marine
species. Endangered Species Research, 33, 1-7. DOI:
https://doi.org/10.3354/esr00789
Walter, S. T., Carloss, M. R., Hess, T. J., & Leberg, P. L. (2014). Demographic trends of
Brown Pelicans in Louisiana before and after the Deepwater Horizon oil spill. Journal
of Field Ornithology, 85(4), 421-429. DOI: https://doi.org/10.1111/jofo.12081