Deepwater Horizon Oil Spill Impacts

This assignment delves into the multifaceted impacts of the 2010 Deepwater Horizon oil spill. It examines the devastating effects on marine ecosystems, coastal communities, and the global economy. The document explores the loss of biodiversity, damage to fisheries, and disruptions to tourism industries. Furthermore, it discusses the efforts undertaken by BP and the U.S. Government to mitigate the consequences through cleanup operations and compensation programs.

Corporate Social
Responsibilities

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................2
Question 1: Possible business function areas of CSR, addressed in Deep water horizon spill.......2
Question 2: Economic impact of Deep-water Horizon spill on the company, industry, community
and government................................................................................................................................3
Question 3: Demonstrate in details the environmental effect of the Deep-water Horizon Crisis at
different ecological systems.............................................................................................................4
Question 4: Clarify the effect of the Deep-water Horizon Crisis on the community and their local
business, labor force and potential health hazards and well being..................................................5
Question 5: Answer the following question USING YOUR OWN IDEAS AND THOUGHTS
and based on your recent readings and references from different searching sources: If you have
been hired as a manger for a BP in the US. ..................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

EXECUTIVE SUMMARY
The case scenario discussed about the largest maritime disaster oil spill known as Deep-
Water Horizon Oil Spill. BP, the company involved in this disaster has to face tough time in
terms of employment, economic and financial condition (Reddy, Arey and et. al., 2012). The
hazard also proved to be a nightmare for oil industry, people with small businesses, wildlife and
marine life. It led to the destruction of ecological and economical condition of gulf countries.
Government also helped the company by preparing Gulf Coast Claims Facility (GCCF) in order
to compensate for the loss to several people and businesses.
INTRODUCTION
The businesses are oriented towards profit maximization but they have certain
responsibilities towards the society as well. The business are required to fulfil these
responsibilities by contributing towards the society welfare (White, Hsing and et. al, 2012). The
given case scenario discusses about the hazardous oil spill known as Deep Water Oil Spill into
the gulf of Mexico. The report discusses about the impact of oil spill on ecology, economy and
on the company. It also discusses the steps taken by the government to control oil spill. The
impact on oil industry due to loss of natural resource is also been discussed in the report.
Question 1: Possible business function areas of CSR, addressed in Deep water
horizon spill
According to the case scenario, The company has to face various issues relating to
money, employees safety, risk mitigation, environmental issues, scarcity of resources etc. Deep
water horizons not only impacted the well being of the business it has greater impact on wildlife,
marine life, birds and reptiles. It also led to seal of the well due to uncontrollable flow of oil
(Camilli, Reddy, and et. al, 2010). It affected the shoreline grasses and soil. The economy had to
face increase in the prices of oil , worldwide affecting various companies dealing in oil. There
are various functions that were affected which are discussed in the case study of Deep water
horizons. Some areas are listed below:
 Natural Resources: It is important to preserve the natural resources as these resources
can not be constructed by human. BP lost five million barrel oil leading to loss of $374
million to the company. The whole oil industry of the world was affected due to shortage
of oil which also led to increase in the prices.

 Ecological loss: The oil spill has extensive damage on environment leading to 25
national wildlife dangered in the path. Since, oil was found on the shores of five gulf
countries causing the death of many birds, fish and reptiles. It is important to take care of
marine life and wildlife as well when the company is travelling through the water bodies
or is involved in any kind of business whose consequences can harm them (Hazen,
Dubinsky and et. al, 2010).
 Economic impact: Oil spill has not only proved harmful for BP but it also impacted
small businesses. Fisherman, shrimpers, oystermen and all the business men depending
upon fishing and tourism to earn livelihood.
 Health and safety: Oil leak led to the death of 11 crew members and 17 members
injured. The employer is responsible for health and safety of the employees and necessary
actions are required to be taken by the companies in order to keep their employees,
secured from any hazard (Silliman and et. al, 2012).
Question 2: Economic impact of Deep-water Horizon spill on the company,
industry, community and government
There was a greater economic impact due to Deep Water Horizon spill on the company,
industry, community and government in the following manner;
 Impact on the company: BP lost five million barrel oil costing $374 million giving a
major shock to the company. The company had to face penalty of $3.5 billion. The
company lost its brand image after Deep Water Horizon spill. It also lost 11 crew
members and 178 left injured in the disaster, to which company had to pay claims to their
families.
 Impact on oil industry: Deep water oil crises impacted the whole oil industry,
worldwide. The moratorium issued by the Secretary of the Interior Ken Salazar led to
loss of jobs for 2000 rig workers. The moratorium reduced the oil production by 31000
barrels per day during the fourth quarter of 2010 and 81000 barrels per day in 2011. It
also affected the prices of oil worldwide (Valentine and et. al, 2010).
 Impact on the community: There was a greater impact on the community various
people working as a rig worker lost their jobs due to moratorium. Marine life was at a
great loss due to oil spill where thousands of fishes, reptiles, birds lost their lives.
Thousands of people involved in coastal small businesses including fishermen, shrimpers,

oyster men and those businesses whose livelihood depended on fishing and tourism has a
high grade impact on their lives. The Gulf region lost approximately 2,50,000 jobs in
2010 in fishing, energy, shrimping and tourism industry.
 Impact on government: Government had to issue moratorium in order to develop safety
standards for drilling and creating strategies to deal with wild wells in deep water. BP
made an agreement with U.S. Government and established Gulf Coast Claims Facility
(GCCF) which was an escrow fund of $20 billion to pay for the costs arose due to oil
spill. The claim was paid to every individual who got affected due to oil spill in order to
compensate for the loss (Lin and Mendelssohn, 2012). The fund intended to pay for lost
tax revenue and additional clean up costs to the government by GCCF. It paid $3.6
billion as a claim to 1,70,000 people and businesses.
Question 3: Demonstrate in details the environmental effect of the Deep-water
Horizon Crisis at different ecological systems.
Environmental effects
The deep water horizon crisis have made a big impact of the environment as different
factors are affected from this crisis. The marine life has been completely destroyed. So many
lives are ended due to heavy soil mixed up in the water. The deep water horizon crisis have
destroyed the whole oil industry, because workers have nothing to do to earn something for their
daily life. Millions of fishes are died after this crisis which have made impact on the business of
fisherman(Valentine and et. al, 2010). The land of grass is totally destroyed because the soil
mixed water being incompatible in the growth of grass. Lot of animals can be lost their entire
generation after the deep-water horizon crisis. Then animals would be contaminated with the oil
which will make a huge impact on the environment.
The ecologist have identified that deep-water horizon crisis could make impact of
environment that will be so extensive. Almost 25 national wildlife refuges are being involved in
this crisis. The soil could be affected as the amount of oil in being increased in it so it will be not
useful for any kind of process. The soil is the main thing to produce any kind of food material,
the farming would be destroyed after the impact of this crisis(Chin and et.al., 2013). The Gulf
countries have hug impact on this crisis as so many fish, birds and reptiles was dead, this has
been as the shores of all five Gulf countries are linked to the oil.

According to the ecologists there are different ecological system in the world, each
system is existing for a particular reason. Like for lives of marine there is a different ecological
system in which they required water to live but if the oil will be mixed in that water then it will
end up their whole generation. The birds are living in a different ecological system so they want
fresh air to live but due to deep-water horizon crisis the air could be polluted which will finish
their life. So deep-water horizon crisis affected the environment so badly(Servaes and Tamayo,
2013).
Question 4: Clarify the effect of the Deep-water Horizon Crisis on the
community and their local business, labor force and potential health
hazards and well being
The deep-water horizon crisis would be so ungenerous for the local people like labors and
local businesses. The fisherman are completely out classed from them business, they will not
able to run their business because this crisis have killed the lot of fishes. The people from the
local business like fishing, the labor force who worked in the oil factories. They all will not able
to develop their business in the future. The labors will not have any kind of job to do which will
affect the livelihood of their families thus so many families will be humiliated after this deep-
water horizon crisis(Choi and Moon, 2016).
The crisis can represented a lot of potential health hazards because environment will be
completely polluted it causes many life taking health issues. The government have to adopt some
effective strategies to overcome from those hazards and that can be so expensive. Thus, the
financial status of the Gulf countries will be also affected. The health issues will scream the each
part of the environment. The local business like tourism and fishing have affected from this
crisis. The tourism industry have not got proper oil to run their vehicle which is the so important
for their business. The number of tourist would be decreased so it will impact the whole travel
and tourism industry(Choi and Moon, 2016).

Question 5: Answer the following question USING YOUR OWN IDEAS AND
THOUGHTS and based on your recent readings and references from
different searching sources: If you have been hired as a manger for a BP
in the US.
If I am appointed as the manager of BP in the US then firstly I will make a proper
strategies in which the area will be mentioned which are affected from the deep-water horizon
crisis. The community is the main part of the society so to aware the community about such
factors that can make impact on the environmental and economic conditions I will implement the
required plans in the system. The initiatives that I have made regarding the environment must be
supported by the neighborhood(Choi and Moon, 2016).
There are some risk that can impact the position of company in the market. These are
shown below:
Strategic risk: If the strategy which is adopted by the organization is not matched with the
requirement of the market then it produces a risk of inappropriate strategy.
Compliance risk: This kind of risk come in case of the improper resources. If the
resources are not used then it will definitely make difference(Choi and Moon, 2016).
Operational risk: The operations should be conducted appropriately. If no then this will
be occurred.
Financial risk: If the market requirement is not analyzed and the investment is done in the
wrong part then the financial crisis will be done.
Reputation risk: The people will not attract to the products and services then it will let the
reputation down(Choi and Moon, 2016).
CONCLUSION
From the above report, it can be inferred that every company is required to adopt some
safety measures in order to protect the society from its hazardous impact. The report discussed
Deep-Water Horizon Disaster of 2010 which disturbed the economy of the world as a whole. It
also had a great impact of wild life and marine life of the gulf countries. Various rig workers lost
their jobs and several small business men involved in the business of tourism and fishing had to

bear losses. BP joined hands with U.S. Government to establish Gulf Coast Claims Facility
(GCCF) in order to compensate to the people and business who got affected by the hazard.

REFERENCES
Books and Journals
Reddy, C. M. and et. al., 2012. Composition and fate of gas and oil released to the water column
during the Deepwater Horizon oil spill. Proceedings of the National Academy of Sciences.
109(50). pp. 20229-20234.
White, H. K. and et. al, 2012. Impact of the Deepwater Horizon oil spill on a deep-water coral
community in the Gulf of Mexico. Proceedings of the National Academy of Sciences.
109(50). pp. 20303-20308.
Camilli, R. and et. al, 2010. Tracking hydrocarbon plume transport and biodegradation at
Deepwater Horizon.Science. 330(6001). pp. 201-204.
Hazen, T. C. and et. al, 2010. Deep-sea oil plume enriches indigenous oil-degrading bacteria.
Science. 330(6001). pp. 204-208.
Silliman, B. R. and et. al, 2012. Degradation and resilience in Louisiana salt marshes after the
BP–Deepwater Horizon oil spill.Proceedings of the National Academy of Sciences.
109(28). pp. 11234-11239.
Valentine, D. L. and et. al, 2010. Propane respiration jump-starts microbial response to a deep
oil spill.Science. 330(6001). pp. 208-211.
Lin, Q. and Mendelssohn, I. A., 2012. Impacts and recovery of the Deepwater Horizon oil spill
on vegetation structure and function of coastal salt marshes in the northern Gulf of
Mexico. Environmental science & technology. 46(7). pp. 3737-3743.
Chin, M.K. and et.al., 2013. Political ideologies of CEOs: The influence of executives’ values
on corporate social responsibility. Administrative Science Quarterly. 58(2). pp. 197-232.
Servaes, H. and Tamayo, A., 2013. The impact of corporate social responsibility on firm value:
The role of customer awareness. Management Science. 59(5). pp. 1045-1061.

Choi, H. and Moon, D., 2016. Perceptions Of Corporate Social Responsibility In The Capital
Market. Journal of Applied Business Research (JABR). 32(5). pp. 1507-1518.