The sustainability concept is an important issue that has caught the attention of not only the scientist but also world global leaders. Oil drilling does impact the environment negatively taking into account the case of BP tragedy in the Gulf of Mexico an aspect that has resulted in scientists delving into research to identify clean and sustainable sources of energy.
According to (Barron, 2012, p. 34), the ecological environment is altered with the continuous oil drilling in the incident that occurred at the Gulf millions of sea cultures were affected by the tragedy resulting in the death and adverse chemical pollution to the remaining. Secondly, oil mining result in the change of the landscape resulting in the increase in erosion, landslides and a shift in the gulf floor which alters the coastal habitat. Thirdly, oil drilling releases toxic waste to the environment which does increase the high rate of occurrence of chronic diseases like cancer, brain haemorrhage among others to exposure to the high levels of toxic waste (Panchal & Lodhia, 2017, p. 1288).
Oil drilling in the deep sea or on land does release high levels of dangerous methane gas to the environment that traps heat resulting in high levels of global warming. Furthermore, an oil leak or spillage in the case of BP and Exxon Valdez resulted in the disruption of the normal livelihood of the people like farming, fishing and tourism (Gill, Piscou, & Ritchie, 2012, p. 6).
Despite the discussed negative impacts of oil drilling, there is continuous production due to the fact that it does drive the global economy. It is true that there are other energy sources but oil contributes to nearly 87% of the production. Increase in oil prices has a positive correlation to the increase in inflation as it does control the infrastructure, manufacturing and production industries (Warner, 2013) .
According to Flournoy et al 2010, BP has had a number of environmental pollution cases against them but has managed to circumvent the legal system due to their multinational status. By virtue of being non state corporations they are not tied down to the multilateral environmental agreements that are consented between states (Namballa, 2014). The aspect gives them a leeway to avoid being accountable for their environmental and societal impacts in the countries that they operate.
Moreover, Multinational Corporations contribute immensely to the growth of the economy in their country of operations and home country. In the country of operations, they provide employment opportunities and attract investors in form of their competitors to open new firms in the nations. On the other hand, in their country they generate revenues in form of taxes. The aspect makes the government to turn a blind eye to their environmental unaccountability (Namballa, 2014, p. 184).
Additionally, multinational corporations have political power in the international arena. They achieve this by contributing to the political campaigns of candidates inclined to support their profit mission and goals especially in developing nations. Once the governments are in power, the multinational have immense control with respect to the policy that will be implemented. The power they wield incapacitates the local governments from implementing any policies or laws, which they might face for not being accountable for the negative environmental and social impacts of their operations.
The disaster occurred in the USA a developed nation that is democratic independent and has a lot of influence around the globe. The fact put a lot of pressure on BP to take action on the disaster; the company spent a lot of money in the clean-up of the sea, paying the legal penalties and coming up with sustainable measures to prevent the re-occurrence of the situation (Flournoy et al 2010). If the situation occurred in a developing nation, based on the explanations given the company might have managed to escape hefty penalties for their actions.
A number of BP stakeholders were impacted directly or indirectly by the actions of the company. The major stakeholder is the USA government who directly benefit from the investments of BP in North America. The company could have involved the government in coming up with environmental regulations that will not only enable them to continue their operations but also protect human and aquatic life. The incident occurred due to laxity in the enforcement of policies by the government and the company.
The second stakeholder are the investors, the company could have informed their shareholders of the measures they have put in place to prevent the occurrence of predictable risks like oil spillage. The communication with the shareholders would have lessened the panic that was witnessed when the disaster became public knowledge. In June, the shareholders lost 55% of the shares an aspect that led to most of them selling their shares in the company for fear of incurring immense losses if they held on to them (Seagul, 2017).
The third stakeholder was the local community who were directly affected by the incident. BP could have worked together with the members of the local community to prevent the oil spillage before it becomes a huge disaster. According to the National Commission on BP oil spill, (2011, s.vi), 1,000 gallons of oil were released on a daily basis, if the company had involved the members they would have prevented the oil leak from spilling 4 million barrels of oil to the Gulf of Mexico.
Finally, the company could have interacted with their customers on not only on their website but also on the social media sites. The action would have provided the company with an opportunity to clarify on the rumours that were circulating. Additionally, it would have provided the company with an opportunity to get views on ways to handle the tragedy. The immediate involvement of their customers in tackling the disaster would have shown that they are remorseful and are willing to rectify the situation. Their involvement would have reduced the immense losses recorded by the company at the end of that financial year.
BP has learnt from their mistakes and has taken a number of steps in sustainability reporting. The company has set up a website called, “Gulf of Mexico Restoration” that outlines the strategies that the company is employing in rectifying the damage caused by the disaster. The website shows the pictures of the clean-up exercise taking place on the beaches, water, and carrying out animal rescue. The company by 2013 had spent an estimate of twenty five billion on the clean-up and restoration exercise (BP PLC, 2013, S. Gulf of Mexico: Restoration progress).
Secondly, the corporation included safety within its core values to ensure that they protect their employees from any danger. In 2008, the company introduced the operating management systems in deep water oil drilling. The system outlines the practices and policies that would be followed to ensure that they protect the environment from a recurring disaster (BP PLC, 2011, s.68)
Thirdly, the corporation has set up, the safety and operational risk, an independent department that evaluates the operations practices of the corporation. They have been given the mandate to intervene in the case they detect and operational and safety risk that may occur as a result of the corporations activities (BP PLC, 2011, s.68). In addition, the corporation has set aside $500 million to be used in research on the long term effect that the disaster will have on the eco-system in the area. Lastly, the corporation has set aside a total of $100 million charity fund to support the unemployed employees in surviving after they lost their jobs as a result of the oil drilling ban instituted on the company.
The events that led to the BP oil rig disaster in the Gulf of Mexico will definitely impact all the oil producing companies in the industry. After the disaster the USA government initiated a review of the laws and regulations on environmental standards, health and safety with respect to oil exploration and on rigs (Carrington, 2016). This will result in the introduction of stringent laws and intense scrutiny of the operations of the companies in the oil industry.
Secondly, the government has introduced a number of safety checks to regulate the oil drilling process in the USA. The aspect has raised a lot of complains among the oil companies who claim that the regulation has slowed down the process of permit provision (Mene, 2017). Thirdly, the companies have engaged in more corporate social responsibilities (CSR) programs to ensure that they restore the customers and shareholders confidence in the industry.
Additionally, the oil spill has intensified pressure and discussion on the alternative energy sources. The alternative energy sources like wind and solar power are clean and are eco-friendly when compared to oil. BP in 2012 invested a total of $3.4 million in clean air agency aimed at reducing emissions. The effect of this is that if the research in alternative energy is successful, most of the oil companies in the industry will end up closing as many consumers shift to this new energy source.
Barron, M. G. (2010). Ecological impacts of the Deepwater Horizon oil spill: implications for immunotoxocity. Toxiologic immunotoxocity pathology, 40(2), pp.315-320.
BP PLC. (2013). Gulf of Mexico: Recovery Progress. London BP PLC.
BP PLC. (2011). Gulf of Mexico: Recovery Progress. London BP PLC.
Carrington, D. (2016). BP oil spill /Environment/ The Guardinan [online] the Guardian. Available at: https://www.theguardian.com/environment/bp-oil-spill [Accessed 19 July, 2017]
Flournoy, A., Andreen, W., Bratspies, R., Doresmus, H., Flatt, V., Glicksman, R., et al. (2010). Regulatory blowout: How regulatory failures made te BP disaster possible, and how the system can be fixed to avoid a recurrence.
Gill, D. A., Piscou, J. S., & Ritchie, L. A. (2012). The Exxon Valdez and BP oil spills: a comparison of initial social and psychological impacts. American Behavioural Scientist, 56(1), pp.3-23.
Namballa, V. C. (2014). Global environment liaility: Multinational corporations under scrutiny. Exchanges: the Warwick Research Journal, 1(2),pp. 181-205.
NationalCommissiononBPoilspill. (2011). Deep Water- The Gulf Oil Disaster and the Future of Offshore Drilling. National Commision on the BP Deepwater Horizon Oil Spill and Offshore Drilling Washington D.C: U.S.Government.
Mene,A. (2017). The Gulf of Mexico oil spill:consequences for the oil and gas industry[online] Uk.practicallaw. Available at: https://uk.practicallaw.thomasreuters.com.3-504-7901?transitionType=Default& contextData=(sc.Default) & firstPage=true & bhcp=1[Accessed 19 July, 2017]
Panchal, A., & Lodhia, S. (2017). The BP Gulf of Mexico Oil SPill: exploring the link between Social and Environmental Disclosures and Reputation Risk Management. Journal of Cleaner Production, Vol. 140, No.3,pp 1287-1297.
Seagull, D. (2017). BP ethical issues. [online]. Academia.edu. Available at: https://www.academia.edu/7563817/BP-ethical-issues [Accessed 19 July, 2017].
Warner, J. (2013). Oil is both the lifebloos and the poison of the global economy. The Telegraph.
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