The Ethics of BP'S Oil Spill* Eleven people died and others were injured in the explosion of the Deepwater Horizon oil rig on April 20, 2010. The explosion led to oil spilling into the Gulf of Mexico for three months, which killed many birds, turtles, dolphins, and other wildlife and had a devastating effect on the Gulf's ecosystem that will be felt long-term. Many communities rely on the Gulf economically, specifically for fishing and tourism, and the spill destroyed their means of livelihood. BP was forced to dole out millions of dollars to Gulf communities in reparation for the damage done to their economies and billions more in cleanup costs. Situations such as these cost huge amounts of money to rectify, and depend- ing on BP's response to the social and environmental account- abilities arising from the spill, the company's public image will be defined by it for years to come. The public called for greater accountability from the government and BP and for stricter regulations and oversight of operations. Debates revolved around who was responsible and how much industrial catastrophes could be avoided in the future. Although legal liabilities could have arisen from taking immediate action to reduce further damage from the oil spill, BP thought it was the right thing to do and quickly tried to contain the spill. BP's actions were consistent with the principles of "product stewardship"-the belief that producers and manufacturers are responsible for the life cycle management of their products as well as the damage and benefits that their products bring to consumers and society at large. The ethical issues are fourfold: Who was responsible for the deaths from the explosion and the resulting oil spill? Who is responsible for the cleanup of our global commons? Who is going to compensate the thousands of land based people whose livelihoods are likely to be destroyed? And what should be the overall responsibility of a corporation when it has significant negative externalities associated with its operations?" *Reprinted courtesy of Managing Values The U.S. government has asserted that the cost of the cleanup must be borne by BP. But who restores the damaged. ecosystem? When the consequences of business, intended or otherwise, cause people to lose their lives or livelihoods, then financial compensation is due to those affected. Many lawsuits were filed against BP. There is an added ethical dimension to this, as was played out the in the past, in how long it can take to pay that compen sation. In the case of Exxon Valdez, the last similar oil spill catastrophe which happened back in 1989, the cost of the cleanup, fines and compensation was put at $3.5 billion, but the punitive damages were originally set at $5 billion to compen- sate the fishermen who lost their businesses in a $12 million a year herring industry which eventually collapsed. The case was dragged through the courts for 19 years until the US Supreme Court determined that the damages were excessive and reduced them by 50%. One of the considerations the court took into account was that no one was killed. Twenty years after the disaster, the money had still to be paid... Exxon remains one of the least trusted companies in the world." The oil spill that was thought to bring economic ruin to the Gulf Coast has instead brought some people rich monetary rewards. For example, local governments collected more retail tax because businesses had an increase in sales for products and services used to cleanup the oil spill. In taking responsibility for the cleanup (including the health and safety of Gulf residents and the people who helped respond to the spill) and swiftly com- pensating people affected by the accident, BP has spent US$17.7 billion (as of December 31, 2010).67 In trying to do right, however, it seemed BP had made another wrong. BP had established an Immediate Action Claims Team in an attempt to cut through paperwork and expedite payments, but in doing so BP's fairness and manner in which the company was paying claims becamea controversial issue. As BP purchased goods and services for cleanup and paid compensation for damage and loss, some busi- nesses and individuals were thought to be gouging BP by charg- ing prices that were up to twenty times the going rates (e.g., for boats, lumber, bottles of water, hotel rooms) and reporting losses higher than actually incurred.68 After seventeen months of investigations, the U.S. Coast Guard and the Bureau of Ocean Energy Management, Regulation and Enforcement issued a detailed report concluding that BP was not solely responsible for the accident. Their findings showed that fault was to be shared by BP, Halliburton (the company that worked on sealing the well), Cameron (the company that supplied the blowout preventer), and Transocean (the owner and operator of the Deepwater Horizon drilling rig, who then issued their own report placing blame solely on BP). The report included thirty-six recommendations for new regulations and safety procedures."

DISCUSSION QUESTIONS Research the answers to the following questions on the Internet and provide a report of your findings. Provide your sources of information.

1. How did BP respond to this accident? Do you think BP is responding in an ethical manner? Why or why not? Do you think BP should be expected to clean up this mess alone? Why or why not?

2. What are the devastating effects of this catastrophe? Who has been hurt by this oil spill? Discuss at least three ethical situa- tions, conflicts, or dilemmas this oil spill has caused. It might help to think about these questions: How does this affect you? How does this affect the environment? How does this affect the citizens closest to the spill as well as citizens of the world? How has this affect government, legislation, the oil drilling industry, the supply of oil, and BP company?

3. Who is profiting from the oil spill? What is meant by "spil- lionaires"? Discuss at least three groups, companies, or individuals that you feel have profited from the oil spill in an unethical manner.