BP Gulf of Mexico Oil Spill - Case Study Example

Case Study: BP Gulf of Mexico Oil Spill Contents a.The social and environmental impacts of oil drilling 3 b.How BP engaged with its stakeholders during the oil spill 4 c.Sustainability reporting of British Petroleum after the oil spill 5 d.Changing activities and sustainable reporting practices by oil companies 5 e.Difficulties in making multinational corporations accountable for the social and environmental impacts in foreign operations 6 f.Long term consequences of the oil spill on the affected parties 7 References 8 a. The social and environmental impacts of oil drilling There are far reaching effects caused by the oil drilling operations in the areas like the Gulf of Mexico. The BP oils spill is a live example of how oil drilling activities can adversely affect the marine lives and species as well as contribute to severe social and environmental damages. The oil drilling activities may result in oil spilling into the oceans and gulf areas which can cause severe continued damage to the health of living beings including human beings, animals, birds and fishes in and around the region and damage the environment as well. The oil spilling leads to increasing the level of toxic chemicals like Polycyclic Aromatic Hydrocarbons (PAH) in the spill water. The PAHs can be associated with oil spills and they include chemicals and carcinogens that are extensively harmful for the health of human beings and marine beings. The increasing level of carcinogens and chemicals in the water may causes severe ill effects on the health of human beings and marine life often causing frequent deaths among them and may also cause these living beings to be born with severe health problems caused by the toxic levels in the water carried through their genes. Also, the effects of the oil drilling activities are long lasting and continue to create damage in the health and lives of the human beings and marine animals for years even after the oil drilling activity or the oil spills have stopped. The spill exposure often lead to severe health problems among the workers involved in the oil drilling activities as well as among the inhabitants in and around the area of oil drilling. Despite the huge negative impacts of oil drilling operations on the social and environmental areas, oil drilling continues to be an important industrial operation for maintaining energy security in different countries. Oil continues to be the greatest source of energy and the demand for oil is continuously rising across the world because it is a natural reserve for energy. As such oil drilling continues to be in a dominant position for boosting the global economic growth and ensuring that a continuous source of energy is maintained. b. How BP engaged with its stakeholders during the oil spill British petroleum is one of the leading oil and gas companies in the globe. The company is reputed for its large scale operations and its sustainability practices in the oil and gas industry. However, the oil spill in the Gulf of Mexico in 2010 caused severe financial and reputational damages for the company (British Petroleum Corporate Website, 2013, p.6). In this respect, the management of the company should have worked more closely with all its stakeholders in order to ideally prevent such an accident. In case such a major accident could not be prevented, British Petroleum should have concentrated on taking immediate and extensive corrective actions to compensate the damages incurred by the society and the external environment due to this oil spill. This is what the management of British Petroleum did in the actual scenario after the occurrence of the big oil spill over in its drilling operations in Mexico. British Petroleum should have concentrated on maintaining smooth communication and taking preventive steps and quality maintenance in its drilling operations and should have communicated about the oil drilling activities practiced by the company in the Gulf of Mexico with all its stakeholders including the employees, external environment, communities, governments, clients and shareholders. This would have allowed the maintenance of transparency between the company and its respective stakeholder groups. Also taking immediate corrective measures and responsibility for the accidental oil spill should ideally be borne by the company. The accountability and responsibility taking activities of the company and reaching out to the stakeholder of the company would have ensured that the company was behaving in a socially responsible manner. c. Sustainability reporting of British Petroleum after the oil spill British Petroleum gave much focus on sustainability repeating for the company after the incident of the oil spill in its drilling activities in the Gulf of Mexico. British Petroleum took immediate corrective measures to offset the negative effects caused by the oil spill in the Gulf of Mexico and surrounding areas and to compensate for the spill in every possible manner (British Petroleum Corporate Website, 2013, p.2). The company ensured that proper processes were followed to settle the claims and take other important steps to compensate for the losses to the environment, society and the community. British Petroleum included different practices like setting up of a USD 20 billion deep water horizon trust, fair claim practices, compensating the local inhabitants and businesses and compensating for the losses of the government and other relevant agencies in the country (British Petroleum Corporate website, 2013, p.1). The sustainability assessment of BP includes key sustainability issues of the company, review of the company for material sustainability concerns and proper internal documentation. Also, after the oil spill, BP has given more focus on presenting the health, safety and environment (HSE) related data in their sustainability reporting. d. Changing activities and sustainable reporting practices by oil companies There are many sustainability and legal issues that are faced by companies after an oil spill disaster. BP also faced many legal issues after the oil spill in 2010 and the legal issues are being continued till date. According to international law, sustainability is the development that ensures that the present needs are met without creating issues for the future generations in meeting their needs. The oil disaster activities raise several questions regarding the sustainability of the practices of oil and gas companies. After the oil spill in Gulf of Mexico, the oil companied across the world felt compelled to take up a proper sustainability assessment of their activities and also practice sustainability reporting as a crucial part of their management accounting policies. The oil companies have started assessing sustainability features with respect to balancing the considerations for the economic, social and environmental criteria in order to minimize the related trade-offs (British Petroleum Corporate Website, 2013, p.4). The economic factors include creating financial profits and returns for the local entities and creating a positive balance between the technology transfers and payoffs so that economic development of the region is achieved. The social criterion involves oil exploration by maintaining an improved quality and standard of life in the host country. The environmental criteria are the most important criteria in this respect and involve preserving the capacities of the environment or use by the future generation. e. Difficulties in making multinational corporations accountable for the social and environmental impacts in foreign operations The oil spill disaster in the Gulf of Mexico through BP’s oil exploration activities were first downplayed by BP. The officials of BP announced this to be an accident and also said that the oil spill and oil disperses in the ocean being much thin as compared to the vast ocean. Also, the personnel of BP added that the environmental impact of the oil disasters in the rig was likely to be very modest. This was in contradiction to what really occurred. The consequences of oil spill in the Gulf of Mexico were dire with the health of the marine beings being detected to be adversely affected by the oil spill even four years after the disaster (The Guardian, 2013, p.2). The government, media and the public played constructive roles in bringing out justice in this case and making BP take up the responsibility of cleaning up in the region. However, it may be identified that this kind of disaster in a developed country would have faced severe repercussions due to the increasing focus on the sustainability issues of the oil drilling companies. The government and the people of a developed country would not have taken this matter lightly and it may be expected that the legal cases would have been closed in a shorter period of time as compared to the present case in which the legal cases for the Gulf of Mexico oil disaster being still continued in the courts. f. Long term consequences of the oil spill on the affected parties The BP oil spill disaster caused adverse health effects for more than 12 varieties of different animals in the region ranging from dolphins, oysters, sea birds and whales. Top level species in the region are suffering with dangerous after effects of the oil spill. According to a report by the National Wildlife Federation, the impacts of the oil spill are likely to affect the marine species in the region for several years to come. Even after four years of the oil spill, the marine species in the season show the symptoms of oil exposure and have been diagnosed with oil toxicity and many diseases associated with oil toxicity. The NWF has stated in 2014, that even four years after the oil spill, oil is present on the Gulf of Mexico in the bottom of the gulf, in the marshes and in the beaches. This has created chemical and toxic exposure for the sea animals with whales, turtles, oysters and sea birds being diagnosed with signs of lung disease, liver problems, reproduction issues and irregular heartbeats among the new born (The Guardian, 2014, p.5). This has established that the marine animals in the region have been affected by cardio toxicity. It is also indicates by NWF that the real effects of the oil disaster in the Gulf of Mexico and the Barataria Bay is likely to be understood in the coming years because of the increasing number of diseases and ill effects found among different rare and top wild life species in the region. References British Petroleum Corporate Website. 2013. BP at a glance. [Online]. Available at http://www.bp.com/en/global/corporate/about-bp/bp-at-a-glance.html. [Accessed on 6 May 2014]. British Petroleum Corporate website. 2013. Gulf of Mexico restoration. [Online]. Available at http://www.bp.com/en/global/corporate/gulf-of-mexico-restoration/deepwater-horizon-accident-and-response.html. [Accessed on 6 May 2014]. British Petroleum Corporate Website. 2013. Independent Assurance Statement. [Online]. Available at http://www.bp.com/en/global/corporate/sustainability/about-our-reporting/assurance/Independent-assurance-statement.html. [Accessed on 6 May 2014]. British Petroleum Corporate Website. 2013. Sustainability. [Online]. Available at http://www.bp.com/en/global/corporate/sustainability.html. [Accessed on 6 May 2014]. The Guardian. 2013. BP oil spill. [Online]. Available at http://www.theguardian.com/environment/bp-oil-spill?page=2. [Accessed on 6 May 2014]. The Guardian. 2014. Wildlife in Gulf of Mexico still suffering four years after BP oil spill: report. [Online]. Available at http://www.theguardian.com/environment/2014/apr/09/wildlife-gulf-of-mexico-bp-oil-spill. [Accessed on 6 May 2014]. Read More