The responsibility of the company is not only to make profits but also to keep a check on its works so as to ensure that its surroundings are not getting affected in any way, and to guarantee the safety of the people associated. So it is the duty of such large working corporate to watch out their responsibility towards the people of the society on a large scale. The Gulf of Mexico is a very important territory as it acts as a home for numerous varieties of aquatic species and on a large scale. This area is also considered to be as a very vital and the richest source of oil and natural gas, above this it is an area which requires development on a huge basis and this is the reason it provides employment to five major states of the U.S (Broder & Krauss, 2011). Considering the oil spill incident in the Gulf of Mexico it was reported that the spill caused destruction on a large scale and hampered aquatic species on a huge scale, but many problems was caused due to the attitude of BP towards the incident which raised voices demanding answers and accountability of the environment on the part of the company. The result of the oil spill incident led to a big decision from the Gulf area for the safety and enhancement of the area and environment of that region which required huge economy (Juhasz, 2011). It’s been tracked that BP spent huge amounts of money for the process of cleaning up the area and for restoring the area, and paying compensations as well. According to the Sustainability Report 2010, it has been reported that BP spent almost $37.2 billion in paying the compensation.
According to the theory of Public Interest, its main task is to consider matters of importance highlighting the mistakes and the features in which the management is lacking and also to see that what are the steps taken by the management whenever such incidents occur, here the oil spill incident is to be considered. But it should be seen that there was no place for the public interest theory in this incident, which is a very relevant point (Ballot et. al, 2006). The public interest theory was brought in action to keep an eye on the absurd practices of the corporate entities and to inspect them. The intervention of the government is inevitable in such cases. The drafting of this theory was the need of the hour and was created in such a way so as to guarantee the safety and well-being of the whole society and not only the profits of an individual.
The public interest theory is concerned with the companies and their acts in safeguarding the overall economy. As a matter of fact, agencies need to implement actions that are strict and help during the emergency times. It must be determined when the action should be put to implementation and deliver to the statutory bodies. Further, it has become an issue to the trustees regarding the trace of various products and services that vanished from the environment. Going by the oil spill tragedy it can be brought to the focus that public interest was never of any importance to the company because BP hardly paid any attention to the overall economy (Dittrick, 2010). Further, the annual report was devoid of any activity that focused on the economy’s benefit or to help the people.
It has been seen that different authors have different ways of viewing the theory. Author Pigou, who drafted the theory, thinks that it should be brought into action when the public raise their voices together to eliminate a malpractice from the society, while an author named Stigler thinks that it should be followed when the public is in agreement for allocating the resources (Lahav, 2014). He also said that this theory barrier and limits the entry of the competitive company in the market. The main objective of the theory is to see that what measures are taken up by the corporate entities to safeguard the interest of the public and to unveil the steps followed to provide safety and significance to the environment.
If consideration is made for the interest and safety of the public then the theory is a perfect one and stands tall. Considering the above conditions and the situations which followed the oil spill it was necessary to get a valid and strong theory to safeguard the interests of the public. It is vital for the government to see that a perfect division as balance is settled between the economy of its vicinity and the interests of the public for a protected and healthy environment (Mason, 2010). Thus, it is seen that the regulations made by the company to mandate the corporate companies to show the steps taken for public interests stands good and it is solely the duty of the
The article emphasizes on the financial, economic, and environmental accounting of the corporate entities. As success is achieved, it also causes one to forget about the others and this is the case with the entities. This also happened in the case of BP who didn’t take immediate and strong steps to cure the region as quick as possible to decrease the effect of the spill. This act of the BP caused 20 species of the marine life to get affected (Adam, 2010). The environmental and the social life as well were under danger due to such acts, and this threat also sustains after 7 years of the incident also after the application of the theory.
The U.S. lacked the policy and stronghold over the companies. It was seen that the boundaries were not enough to stabilize the competing interest which determines the attainment of utilization of energy. It can be also given a form which depicts the ineffective working and the later steps take up by the regulatory authorities in the case of the BP oil spill (Fodor &v, 2010). Attention should be paid that the oil spill disaster took a big form due to the inefficient working of the regulatory authorities. These points make it clear that the failing of the regulatory authorities and the legal system made the oil spill disaster a big one, affecting and impacting the lives of millions of people and numerous diversities (Booz & Hamilton, 2010). So it was the regulatory framework which was inefficient and neglected the environmental laws.
It was tracked that such policies and rules existed which if followed well would have stabilized the conditions of the disaster but nothing of this sort happened, and this shows the failure of the corporate and the government which slammed the public interest theory. It is also seen that if the markets are left to operate on their own then they incur huge losses to the respective companies. This is because markets are fragile in nature (Clark, 2010). Also after the presence of the statutory authorities, the incident happened which shows their inefficiency.
It is the major duty of the regulators to ensure that the public interests are strictly followed. The regulatory authorities should also understand that contingencies are uncertain and accordingly plans should be kept in hand if such incidents occur. This shows the ineffective power of the regulators which created such a scenario (Albuquerque et. al, 2013). The statutory authorities had full control over all the rules and the framework but then also its negligence and the late steps led to such a disastrous effect of the oil spill.
In this case, my opinion is that the public interest theory proves to be a boon to all the people of the society as it sees the effective working of the companies and implements such laws which enhance the benefit of the people. It is the best theory for the people as the corporate giants who do not abide by the rules regulations would be put into attention by the government to exercise their duties properly. According to the theory, the companies who will not be having these rules and regulations in their agenda will have to include them and will also be kept into a vision for their activities or workings (Slaper & Hall, 2011). There are also cases in which some individuals are reported to be working in the government companies and the private entities as well. This creates a golden opportunity for these people to safeguard the interests for their future because their expertise in of no-match with the others people working normally in the related industries. These people working on both sides are said to favor the private companies more.
But on considering the overall situations we find that the public interest theory has found its place as a chief and very important set of rules and regulations which are to be followed by all the companies. These regulations create a healthy environment for the society to live in and at the same time keep on developing it with effective strategies. But the major matter of concern is the working of the employees that will they skillfully and honestly follow their duties or will work in the favor of the private entities. As such, to track the entities it is a must and a rotation or tenure of such people involved will be an effective measure.
Conclusion
It is the need of the hour to draft and brings into action such rules and regulations that would be able to control the working of the corporate giants and would also keep a watch on their absurd activities at the same time. Any such plan and strategy are always welcomed by the government. Attention should be driven towards the point that an effective the3ory of regulations would act as a limit to the abnormal activities of the corporate entities and will prevent them from functioning aimlessly. So it must be seen that the public interest theory is a must for the safeguard of the society. The disastrous incident of BP oil spill will act as an example for other companies and it is expected that they will pay more attention towards the development of the management and the proper execution of the regulations. It can be clearly seen that the BP provided and spent money like water to restore all that it could do but this could not prevent the price of the share to see a downfall in the market. Thus it is recommended for BP to pay utter attention to the regulations, governance issues and to function as per the terms of corporate responsibility. Moreover, the safety of the economy and the preservation of the environment should be help at a prime activity. This will not only avoid problems but also lead to a strong practice, setting examples for other companies too. The BP Oil Spill is a major eye opener for the regulators, judicial bodies, companies etc.
References
Albuquerque, R, Durnev, A, Koskinen, Y 2013, Corporate social responsibility and firm risk: theory and empirical evidence, Boston University.
Adam, D 2010, BP oil spill: death and devastation – and it’s just the start, viewed 24 May 2017 https://www.theguardian.com/environment/2010/may/31/bp-oil-spill-death-impact
Ballot, B, Heitger, D. L & Landes, C. E. 2006, ‘The future of corporate sustainability reporting: A rapidly growing assurance opportunity’, Journal of Accountancy, vol. 20, pp. 65-74
Booz, A & Hamilton, A 2010, The Offshore Oil and Gas Industry Market Response – Part One, Department of Energy, National Energy Technology Laboratory.
Broder, J. M, & Krauss, C 2011, Regulation of Offshore Rigs Is a Work in Progress, The New York Times, viewed 24 May 2017, https://www.nytimes.com/2011/04/17/us/politics/17regulate.html?pagewanted=all&_r=0
Clark, A 2010, Gulf oil spill: Will Deepwater sink the 101-year-old BP?, viewed 25 May 2017 https://www.theguardian.com/environment/2010/jun/02/gulf-oil-deepwater-sink-bp
Dittrick, P 2010, ‘Investors ask firms to outline deepwater risks, spill-response plans’, Oil and Gas Journal, vol. 108, no. 30, p. 26.
Fodor, A & Stowe, J.D 2010, The BP Oil Disaster: Stock and Option Market Reactions, Working Paper, Ohio University.
Juhasz, A 2011, Black tide: the devastating impact of the Gulf oil spill, John Wiley and Sons, New Jersey
Khatchadourian, R 2011, The Gulf war, Was there any heroes in the BP Oil Disaster, viewed 25 May 2017 https://www.newyorker.com/magazine/2011/03/14/the-gulf-war
Lahav, A 2014, The ideas that underly BP’s cert petition don’t make sense, viewed 25 May 2017 https://neworleans.legalexaminer.com/toxic-substances/professor-lahav-the-ideas-that-underly-bps-cert-petition-dont-make-sense/
Mason, J.R 2010, The Economic Cost of a Moratorium on Offshore Oil and Gas Exploration to the Gulf Region, Working Paper :Louisiana State University.
Slaper, T. F & Hall, T. J 2011, ‘The Triple Bottom Line: What Is It and How Does It Work? Indiana Business Review. vol. 86, no. 1, pp. 6-10.
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