Lyse Wagner
Professor Saavedra Espinosa
Global Commerce 250
May 9th, 2018
Disaster and Corporate Social Responsibility
On April 20th, 2010, a disaster occurred that shook North America. On this day, The Gulf of Mexico experienced a damaging event that would change the community, environment, and economy. This detrimental accident caused by British Petroleum (BP), one of the world’s largest and leading oil companies, had damaging effects on the Gulf. Even though the company caused a terrible disaster that created great damage to the Gulf and the communities surrounding it, BP has still managed to maintain a good corporate social responsibility. BP’s website clearly depicts how their company operates, as well as their company values and ways they are giving back to the world. Despite the damaging and detrimental accident of the oil spill in the Gulf of Mexico, BP has managed to create a well-rounded corporate social responsibility initiative. Some examples of this are BP’s veterans program, their involvement in STEM, and their devotion to bettering the environment and the community. Not only has BP gone above and beyond to restore the damage the company caused, they also support many other organizations and initiatives that strengthen their corporate social responsibility immensely. In this paper, I will first summarize the disaster and account for the specific damage it caused, as well as BP’s response and reaction to the event. I will then examine how BP closely relates to the Newmont Mining Company, that is the subject of Marina Welker’s ethnography Enacting the Corporation; An American Mining Firm in Post-Authoritarian Indonesia. Lastly, I will include an analysis of BP’s corporate social initiatives, and how BP displays a well-rounded corporate social responsibility, in the aspects of the environment, as well as the global community.
The Deepwater Horizon oil spill is considered one of the largest oil spills in history. Approximately 200,000,000 gallons of oil over 87 days were leaked into the Gulf of Mexico from this rig that experienced failure caused by issues of engineering (cnn.com). BP stated in a press release from May 24th, 2010 explaining the numerous problems that contributed to this accident; some of them being faults in the casing system, faulty cement that was used to seal the reservoir, and the failure of the detection procedures to ensure the control of hydrocarbons in the well (BP, Press Release, 2010). These factors caused the rig to explode, killing eleven workers and injuring seventeen. From the initial explosion of the rig itself, the oil began to quickly leak into the Gulf, and would spread over approximately 68,000 square miles. The uncontrollable flow of oil was extremely damaging to the Gulf, and the states on the coast of it. This oil spill had a ripple effect on many different aspects of society; first, it dramatically effected the ecosystem; crude oil has many endangering effects on animals, it strips the waterproof quality of a bird’s feathers, compromises the insulation of fur on mammals, and can poison and kill an animal when ingested (noaa.gov). According to the Center for Biological Diversity, approximately 25,900 marine animals were affected by this disaster (biologicaldiversity.org). Fish, sea turtles, birds, and plants were impacted the most by the oil. Habitats were also deeply affected; around 490 miles of wetlands around the coast was effected by the spill, and these wetlands serve as a habitat for numerous species, specifically birds and fish. On beaches surrounding the gulf, about 550 miles were effected, which also posed threats to sea turtles and birds that nested on beaches. These impacts that the oil had deeply harmed the ecosystem, which also effected the economy. When marine animals’ populations were declining, such as fish and shellfish, the seafood industry was severely impacted. The seafood industry in states along the Gulf specifically were deeply impacted, and experienced great damage. One oyster farmer accounted for this; “Our business is still struggling here at Bon Secour Fisheries because of the lack of oyster production…I place the blame for that on the oil spill” (Chris Nelson, npr.com). This was said in 2015, which was five years after the spill, showing that the impact of the oil spill still runs deep for the seafood industry. Another oyster company experienced similar damage to their corporation in New Orleans. P+J Oyster Company, an establishment that is over hundred and thirty years old, faced frustrating consequences of the spill as well. Al Sunseri, the owner of the company, explained that he had the impression that the company would recover after a year or so. He then goes on to say that, “Now it’s five years out and we’re not anywhere near to where we thought we’d be” (Al Sunseri, npr.com). He has a similar response to Chris Nelson for blaming the decline in business on the oil spill; “I attribute it all to the Deepwater Horizon oil disaster, and I’ll never say it’s anything but a disaster. It’s not a spill, because spills are easily cleaned up, and this is the gift that keeps giving” (Al Sunseri, npr.com). These are just a few examples of hundreds of other seafood companies that experienced the same great damage to their businesses. The event of the oil spill had many disastrous effects on the Gulf of Mexico, as well as the states on the coast of it, and British Petroleum was to blame for it. This being said, BP has had to rebuild their company name, after being the cause of a severe catastrophe. This situation that BP has been in since 2010 correlates to one that occurred in the ethnography Enacting the Corporation; An American Mining Firm in Post-Authoritarian Indonesia, by Marina Welker. In her ethnography, Welker analyzes the Newmont mining company, and describes how it operates as a corporation. The most evident parallel drawn between the two companies is that they both attempt to display their companies to the public as responsible and environmentally friendly. Because both companies are not generally known as being beneficial to the environment, being mining and gasoline and oil companies, these corporations have to go to greater lengths to gain the community’s trust, especially after a certain event that damages the company’s image occurs. For example, when Project Underground released a comic calling Newmont “Newmonster”, the mining company heightened their social responsibility. These comics classified Newmont as “destroying the environment”, and “greedy, amoral men are responsible for this evil” (Welker, 160). This forced Newmont to counteract Project Underground’s poor description of the company, and they started with nicknaming the company “Goodmont”. They devoted their efforts towards becoming more environmentally friendly, and were eager to share it with the public. Welker explains, “Several officials tried to impress me with the cost and state-of-the-art design of Newmont’s water management system (which they referred to as ‘the eighth wonder of the world’), offering it as evidence of environmental commitment” (Welker, 161). Along with Newmont’s newly acquired sustainability initiative, they also were devoted to helping the community; “Newmont managers expressed pride in the company’s local hiring efforts, infrastructure projects, development programs, and NGO collaborations” (Welker, 162). Welker also continues to explain that Newmont not only created these new initiatives, but they did so “flamboyantly” (Welker, 163). This is specifically seen when the company was accused of releasing millions of tailings, containing harmful toxins, into the ocean every year. While Newmont was doing this, they discovered that tailings were not actually toxic, and put great effort into convincing the community of this realization. They conducted this by asking people to sample the tailings, explaining that they were harmless. This kind of exhibition along with the general attempt to become more sustainable performed by Newmont is evidence for its attempt to correct the world’s view of the company that was misconstrued by Project Underground. Similarly, BP also heightened their corporate social responsibility, following the Deepwater Horizon oil spill on the Gulf of Mexico. To accept responsibility for this disaster, British Petroleum worked towards restoring both the economy and environment that was effected by the damage they had caused. For the economic reconstruction of the Gulf and the states effected, they paid several large sums of money to different organizations within the industry. In total, BP paid $13 billion dollars on claims alone that were made by victims of the oil spill. Of this sum, about $4.8 billion was a part of the settlement deal. Along with the claims they fulfilled, BP also paid $14 billion for restoration (msnbc.com). The large $14 billion amount that was added onto the previous claims by BP, which shows that BP did claim responsibility, for going above what was asked of them to pay. Besides economic relief, BP was committed to the environmental restoration of the Gulf, and communities surrounding it. In BP’s efforts to restore the damage they had done, they went beyond just the settlement payment, and continued to heavily contribute to the restoration. $25 million was given to Mississippi, Florida, and Alabama in order to provide stronger protection of the coastlines in these areas from the crude oil (bp.com). Along with the money given to these states, BP also took the sum of their revenue earned from the MC252 well, and put it towards restoring the wildlife in Alabama, Mississippi, Florida, and Louisiana (bp.com). British Petroleum took this event seriously, which is thoroughly expressed in a press release that took place on June third, 2010, just a few months after the event. CEO Tony Hayward explains “Everyone at BP is heartbroken by this event, by the loss of life and by the damage to the environment and to the livelihoods of people of the Gulf Coast. It should not have happened and we are bound and determined to learn every lesson to try and ensure it never happens again” (Hayward, bp.com). He also explains that BP is determined to not only restore the damage done in the Gulf, but also to rebuild the trust in America. The rest of the press release is filled with statements from the Chairman and CEO of BP, regarding what they have already done for relief of this disaster, and what they will do in the future. BP holds a diverse corporate social responsibility initiative, in the way that they cover many different aspects of the world around them; while the Gulf restoration is certainly holds a presence in BP’s corporate social responsibility, they have adopted many other programs over the years to add on to their initiative, specifically in the areas of the environment, and the community; both inside and outside of the company. One example of this is the BP Foundation that was created in 2006, and is one aspect of BP’s corporate social responsibility that is extremely beneficial for communities around the world. This organization provides aid to many different nations worldwide, and caters to the needs of the development of economies, and humanitarian relief (bp.com). The foundation has reached a total of $185 million in efforts to strengthen these aspects of global communities. Their donation of $1 million towards the NACME organization for student engineers alone has provided 200 scholarships for students to study engineering in school. They are also partnered with the National Merit Scholarship Corporation, and have donated $6.2 million in scholarships for children of BP workers. For education, BP has had a large presence in the field of STEM. BP states on their website that “A world-class workforce with a diverse mix of talented people is vital to meeting the energy needs of tomorrow – and women, more than ever, are playing their part” (bp.com).
Another field BP is dedicated to and involved in is the veteran community. They host the Hiring Our Heroes organization, which aids veterans in finding a suitable job. When veterans are employees at BP, they are given numerous benefits, and flexibility with military leave and compensation for health coverage. BP was described as a “Military Friendly Employer” in GI Jobs magazine, named “Best of the Best in the U.S Veterans magazine, and many more (bp.com). The various affiliations BP has with outside organizations serve as evidence to BP’s beneficial social responsibility. Along with these programs, BP also holds a strong commitment to the environment, the global community, and the community within the company itself. BP was clearly deeply involved in the oil spill cleanup and restoration of the Gulf, but that is not the extent to their devotion to the protection and preservation of the environment. Bob Dudley, the Group Chief Executive of British Petroleum stated that “As the world demands more energy it also demands that it be produced and delivered in new ways, with fewer emissions…At BP, we embrace this dual challenge. We have always looked to the future, adapted to change and met challenges like this head on” (Dudley, bp.com). He explains the amount of resources that were put into the purchase of wind, solar, and biofuels as energy sources to become more environmentally friendly. BP has also continuously worked towards lowering emissions, by altering certain ways that the company operates, such as reducing fuel consumption and methane emissions (bp.com). It is also stated on their website that “Our goal of achieving no damage to the environment guides our actions” (bp.com), which describes that BP is so devoted to managing their environmental impact that it dictates their operations and processes. Aside from BP’s environmental preservation aspect of their social responsibility, they also have a strong devotion to the quality of the community within the company. BP has their code of ethics and morals on their website, and include “Safety, Respect, Excellence, Courage, and One Team” (bp.com). BP describes this code as “our guide to doing the right thing and explains how our values should guide our decisions” (bp.com). This is one way that BP has expressed their deep care in creating the best environment for the employees of the corporation. BP believes in diversity in the workplace, and acceptance throughout the company. “We believe that to succeed, we must create an environment in which everyone is included and treated with respect and dignity” (bp.com). This statement, along with BP earning a top spot in the Human Rights Campaign’s Corporate Equality Index this past year, is evidence that BP cares deeply about their employees, and the environment in which they work in (bp.com). BP is also a large advocate for women in the workforce, which is seen in their goal of making women represent 25% of group leaders by 2020 (bp.com). The organizations BP is involved with, along with their sustainability initiative and environmental preservation creates a well-rounded corporate social responsibility campaign, which proves that despite the horrific event of the detrimental oil spill at the Deepwater Horizon rig, BP has managed to not only control and help immensely with the relief efforts, but has continued to expand and widen their variety of other ways to provide a positive impact on the world. This is evident in BP’s founding of the BP Foundation, and their presence in the veteran and STEM communities. Throughout BP’s website, it is evident that they are a committed corporation, that went further than what they were asked to fully restore the damage they had caused in the Gulf of Mexico. Despite the tragedy and damage that the oil spill caused, it is visible that British Petroleum has still managed to create a well-rounded corporate social responsibility initiative, inclusive of efforts to benefit the environment, the global community, and the inner community of the corporation.
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