The Exxon Valdez Company - Case Study Example

Abstract The 1989 Exxon tanker oil spill caused massive damage to the economy and led to detrimental damages to the environment. The incidence affected the Prince William Sound that has rich fish reserves. The spill also affected the Gulf of Alaska. Critics from various stakeholders pointed at negligence by the management of the company and lack of preparedness. The company also had obsolete equipment and inadequate personnel to respond to the disaster. The company paid a significant amount of money in compensation for damages from the incidence including lawsuits and claims. The company also launched cleanup initiatives to ensure the water were clean. The in Exxon tanker oil spill, however, boosted disaster preparedness in many organizations today. Introduction The incidence occurred in 1989 characterized by oil spill from an Exxon tanker. The Exxon Corporation and Alyeska Pipeline services faced considerable disapproval in view of the manner in which they handled the incidence. The spill occurred on 24 March and spread over considerable square miles. The Prince William Sound and the Gulf of Alaska were the most affected areas by the spill. The incidence created serious environmental concerns because of the effect it brought to the environment including the waters (Wang & Stout, 2007). It would also have profound effects on the oil production in the area of Alaska. The company undertook clean up initiatives and compensated different stakeholders affected by the oil spill. Major Issues The major issues in the case included the imperfect and slow response to the oil spill. An in-depth analysis of the response reveals instances of unpreparedness of the organizations to handle the situation. Instances of mismanagement and negligence were evident from the approach use as a response to the spill. The decision of the ship’s captain to attempt to free the tanker from the reef was a sign of underperformance. According to officials, the decision led to further spill of the oil. After getting the oil spill report, Alyeska crews did not respond in a manner that showed their preparedness for an oil spill. The company did not have sufficient containment equipment, which were vital for managing the situation. This was a case of mismanagement. Alyeska Pipeline services did not depict proper disaster preparedness strategies. The organization’s oil-spill containment equipment was in disarray and took a long time to assemble. There was improper preparation of ways in which to transport the equipment to the oil spill point. First, they were loaded into a damaged barge only for the company to load them back onto a tugboat. This brought about delays in response to the spill. The equipment took long to get to the scene and other equipment got to the scene the following day. This provided time for the oil spill to spread considerably over a large area over water. Both Alyeska and Exxon did not have sufficient containment booms to respond to the oil spill. They lacked chemical dispersants that were vital in the operation. Besides, after taking long testing the chemical, the helicopter used to dispense the chemical was ineffective. It missed the target and did not function well to solve the situation. The boats used in the operation to scoop the oil were inefficient. Despite being old, they continued to break during the process. The skimmers used were of low capacity and filled up easily necessitating their emptying into barges. This made the operation take a long period and allowed further spreads of the spill. Lack of coordination among the work crew was evident from the allocation of duties during the operation. The limited range coupled with technical problems led to miscommunication between those in operation and coordinators onshore. Mobilization of private fishing boats was low and ineffective. Incidence of negligence by Exxon was the move to allow command for a captain who had been through alcohol detoxification (Clarkson, Miller & Jentz, 2006). The officials neglected the regulations set by Coast Guard on alcohol detoxification for captains. Problem Analysis There was an issue of the effectiveness of the organization’s containment plan. According to officials from the organization, there was a detailed contingency plan to attend to emergencies and disasters. After an oil spill or any disaster, emergency crews would get to the scene of incidence. By 1989, when the spill occurred, the organization had eleven officials to undertake the monitoring of the ships. Given the holiday situation during the incidence, the officials were not out of duty. The slow response, therefore, never depicted the organization’s lack of readiness to deal with spill. Contrary to the officials’ word, a state report on the issue proved the organization's containment plan incompetent. The organization had few tugboats, oil skimmers and booms used during an oil spill. On a further note, the organization went against its own contingency plans since it did not notify state officials of the obsolete nature of the barge. According to state monitors, the equipment that the organization had could not support the response to an oil spill incidence. Interventions The Company admitted liability for the oil spill disaster’s effects to the public, company shareholders and others affected. It deduced initiatives to undertake activities aimed at ensuring the water was clean after the spill. The organization set up people, vessels and other equipment for cleaning up the affected areas. Affected beaches and wildlife were part of the cleaning up process. Exxon paid over $2 billion in the form of compensation to various stakeholders affected by the oil spill. The federal, state, as well as local governments received compensation for damages. The company also paid compensation for victims who filled lawsuits and claims for resultant damages from the oil spill (Kvasnikoff, 2007). The taker captain faced charges of negligence of law. The initiatives’ effectiveness and suitability, according to state reports were insufficient to clean up the affected areas. Even though the organization insists the strategies were effective, the public still feels the water is still unclean. The organization should apply modern technologies in cleaning up the affected areas. Conclusion The oil spill disaster had detrimental effects on the environment. It contaminated water and its ecosystems including organisms. It also had serious effects on the fishing industry and subsequently the economy (Cheremisinoff & Paul Rosenfeld, 2009). The spill spread over the water causing deaths of water animals and organisms including fish, sea birds, and other wildlife in the water. Noteworthy is the rich wildlife present at the Prince William Sound before the incidence affected by the spill. This included trumpeter swans, herrings, salmon and other fish species. Prince William Sound was a great habitat to the large number of fish species. These fish species were of significant contribution to the fishing industry. The company faced criticism for mismanagement of the incidence. The company’s manager took long to comment on the incidence. Critics pointed at statements that were of negative effects to the public. The statement by the executive of intentions to shoot gas prices to support the clean up was not appropriate for public relations. The consumers were not happy at the statement over the plan to make them pay the cost of cleaning up the affected areas. The incidence boosted the preparedness for in terms of oil spill management. Companies take initiatives aimed at ensuring quick response to such disasters. References Cheremisinoff, N. & Paul Rosenfeld, P. (2009). Handbook of Pollution Prevention and Cleaner Production - Best Practices in The Petroleum Industry. Burlington, MA: William Andrew. Clarkson, K., Miller, R. & Jentz, G. (2006).West's Business Law: Text and Cases : Legal, Ethical, International, and E-commerce Environment. Mason, OH: Cengage Learning. Kvasnikoff, K. (2007). Exxon Valdez 18 Years and Counting. New York, NY: Lulu Publishers. Wang, Z. & Stout, S. (2007). Oil Spill Environmental Forensics: Fingerprinting and Source Identification. Burlington, MA: Academic Press. Read More