The Ethics of BP'S Oil Spill* The U.S. government has asserted that the cost of the cleanup must be borne by BP. But who restores the damaged Eleven people died and others were injured in the explosion of ecosystem? the Deepwater Horizon oil rig April 20, 2010. The explosion led When the consequences of business, intended or otherwise, to oil spilling into the Gulf of Mexico for three months, which cause people to lose their lives or livelihoods, then financial killed many birds, turtles, dolphins, and other wildlife and had compensation is due to those affected. Many lawsuits were filed a devastating effect on the Gulf's ecosystem that will be felt against BP. long-term. Many communities rely on the Gulf economically, specifically for fishing and tourism, and the spill destroyed their There is an added ethical dimension to this, as was played means of livelihood. BP was forced to dole out millions of dollars out the in the past, in how long it can take to pay that compen- to Gulf communities in reparation for the damage done to their sation. In the case of Exxon Valdez, the last similar oil spill economies and billions more in cleanup costs. Situations such catastrophe which happened back in 1989, the cost of the cleanup, fines and compensation was put at $3.5 billion, but the as these cost huge amounts of money to rectify, and depend- punitive damages were originally set at $5 billion to compen- ing on BP's response to the social and environmental account- sate the fishermen who lost their businesses in a $12 million a abilities arising from the spill, the company's public image will year herring industry which eventually collapsed. The case was be defined by it for years to come. The public called for greater dragged through the courts for 19 years until the US Supreme accountability from government and BP and for stricter regula- Court determined that the damages were excessive and reduced tions and oversight of operations. Debates revolved around who them by 50%. One of the considerations the court took into was responsible and how such industrial catastrophes could be account was that no one was killed. Twenty years after the avoided in the future. Although legal liabilities could have arisen disaster, the money had still to be paid . . . Exxon remains one from taking immediate action to reduce further damage from of the least trusted companies in the world. the oil spill, BP thought it was the right thing to do and quickly The oil spill that was thought to bring economic ruin to tried to contain the spill. BP's actions were consistent with the the Gulf Coast has instead brought some people rich monetary principles of "product stewardship"-the belief that producers rewards. For example, local governments collected more retail and manufacturers are responsible for the life cycle management tax because businesses had an increase in sales for products and of their products as well as the damage and benefits that their services used to cleanup the oil spill. In taking responsibility for products bring to consumers and society at large. the cleanup (including the health and safety of Gulf residents The ethical issues are fourfold: Who was responsible for the and the people who helped respond to the spill) and swiftly com- deaths from the explosion and the resulting oil spill? Who is pensating people affected by the accident, BP has spent US$17.7 responsible for the cleanup of our global commons? Who is billion (as of December 31, 2010).57 In trying to do right, however, going to compensate the thousands of land based people whose it seemed BP had made another wrong. BP had established an livelihoods are likely to be destroyed? And what should be the Immediate Action Claims Team in an attempt to cut through overall responsibility of a corporation when it has significant paperwork and expedite payments, but in doing so BP's fairness negative externalities associated with its operations?"65 and manner in which the company was paying claims became Reprinted courtesy of Managing Valuesa controversial issue. As BP purchased goods and services for 1. How did BP respond to this accident? Do you think BP is cleanup and paid compensation for damage and loss, some busi- responding in an ethical manner? Why or why not? Do you nesses and individuals were thought to be gouging BP by charg- think BP should be expected to clean up this mess alone? ing prices that were up to twenty times the going rates (e.g., for Why or why not? boats, lumber, bottles of water, hotel rooms) and reporting losses 2. What are the devastating effects of this catastrophe? Who has higher than actually incurred.68 been hurt by this oil spill? Discuss at least three ethical situa- After seventeen months of investigations, the U.S. Coast tions, conflicts, or dilemmas this oil spill has caused. It might Guard and the Bureau of Ocean Energy Management, Regulation help to think about these questions: How does this affect and Enforcement issued a detailed report concluding that BP was you? How does this affect the environment? How does this not solely responsible for the accident. Their findings showed affect the citizens closest to the spill as well as citizens of the that fault was to be shared by BP, Halliburton (the company world? How has this affect government, legislation, the oil that worked on sealing the well), Cameron (the company that drilling industry, the supply of oil, and BP company? supplied the blowout preventer), and Transocean (the owner 3. Who is profiting from the oil spill? What is meant by "spil- and operator of the Deepwater Horizon drilling rig, who then lionaires"? Discuss at least three groups, companies, or issued their own report placing blame solely on BP). The report individuals that you feel have profited from the oil spill in an included thirty-six recommendations for new regulations and unethical manner. safety procedures.69 DISCUSSION QUESTIONS Research the answers to the following questions on the Internet and provide a report of your findings. Provide your sources of information