Corporate Crime – BP Oil Spill

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Table of Contents

Introduction
BP Oil Company
BP Oil Spill Effects
Conclusion
References List

Introduction

Most organizations have strived to carry out their operations within the confines of the law. However, in some instances of, say negligence, has made them be entangled with lawsuits emanating from their operations. Some companies knowingly or unknowingly have committed corporate crimes in the pursuits of profit maximization.

In general terms, corporate crime refers to any crime committed by a company/organization or business entity. Similarly, Yeager (1980) illustrates that corporate crime is “ the conduct of a corporation or employees acting on behalf of a corporation, which is prescribed and punishable by law”. This crime may also reflect the character of the management team as cited by Yeager (1980).

BP is one of the respected companies which, in the eyes of many, was involved in corporate crime. Though it may be argued that crime committed was not intentional, it had far reaching effects on the environment and climate.

The crime the company committed occurred in the Gulf of Mexico, which in 2010, fixing environmental and economic issue. These included damage to aquatic life, water pollution and breakdown of businesses among others. It is reported that around 174 million gallons was spilled and spread over an area estimated 25, 000 square miles (Hayward, 2010).

BP Oil Company

BP is one of the largest oil suppliers of oil on the globe. The organization was engaged in steady operations until 2010, when it experienced lower profits because of the oil spill that happened in the Gulf of Mexico. The Spill happened in April 2010, when the Deep Water Horizon drilling,a company owned by Transocean Ltd, contracted by BP burst and begun burning near the shores of the Gulf of Mexico.

The ship began sinking, gushing an estimated 55,000 barrels of oil per day. Efforts to contain the spill was unsuccessful. When it was successfully capped in September 2010, an estimated 205 million gallons of crude oil was already spilled into the ocean.

The disaster caused a severe damage and endangered several “at risk” businesses along the Gulf. These industries included; tourism, recreational and commercial fishing and other businesses tied to natural resources.

BP Oil Spill Effects

Environmental Challenges

The BP oil spill had several ethical implications to the organization and the environment as a whole. Some of the effects caused by the spill revolved around the wildlife and the environment. The spill contributed to the disruption of the ecosystem and the wildlife, these included both aquatic and terrestrial wildlife.

Similarly, marine and wildlife habitats were extensively damaged, fishing and tourism affected as the fish were affected by the oil present in the water bodies.

This made their survival a challenge. According to Steiner (2010) environmental and water pollution contributed to both human and aquatic health problems as it led to suffocation of aquatic life besides contaminating the oxygen concentration in water and the environment.

Financial Loss

Company

The BP oil company did not only contribute to the destruction of the environment and wildlife, it incurred financial losses as well. For example, Steiner (2010) indicates that the compensation valuation in physical damages in contrast to actual claims was approximated to be about $20-50 billion.

Many authors opine that this figure is one of the grand verdicts ever made compared to the more than $5 billion awarded to Alaska oil spill in American history (Amadeo, 2010).

Businesses and Individuals

Many businesses and private individuals also suffered financial loss in terms of property and economic damage. These included about 13,000 individuals. Among the businesses that suffered hugely included; property owners, the hoteliers, restaurateurs and oyster men.

Loss of Life

The BP oil pill contributed to loss of life. According to Gardner (2010) eleven people perished and animals and plants died as well. In addition to these deaths, several people were injured, because the spill covered a large surface area, Gardner (2010) notes that sea birds, fish and turtles among others died on a large scale. The coral reefs which add beauty to coastal beaches was also destroyed.

Social Fabric

The Oil spill on the Gulf of Mexico confronted an environmental disaster never experienced in the American history. Because of the oceanic and geography processes, the ecological impacts of the spill had a greater impact on the coastal areas. Nevertheless, the spill affected the social fabric and the ecology of the communities residing in these areas.

The situation caused the inhabitants to reflect their relationships with the media, industries and government agencies. According to X, the communities residing at the coastlines blamed the regulating agency for improperly monitoring the extraction of the resource and the BP for the technical failure causing the spill.

Along with the media, we viewed the agencies/institutions as incapable of conveying accurate information to the public or addressing critical technical aspects during the response process.

Pyrrhic defeat theory illustrates that those who have authority to change the system opt not to do so because they benefit in the way it operates. In this case, the institutions which the residents trusted to be their aid did nothing tangible to safeguard their well being (Alario & Freudenburg, 2003).

Rather than being a center of first stop, the community argued the institutions and the industry were colluding in efforts to extract the petroleum resource. Similarly, the media, BP and the institutions were believed as promoting their own interest rather than safeguarding the community through failure to properly represent the community and the story.

Thus, the residents were convinced that the values bestowed to the institutions were geared towards political and profit making goals. In a nutshell, the institutions failed to implement policies that would have reduced the risk.

Why BP Oil Spill is a Problematic Issue

BP oil spill is one of the most complex cases ever to have happened in the world history. This is because the spill covered five Gulf States, that is, Alabama, Mississippi, Texas and Louisiana. The spill altered the structures already established. On a larger scale, it destroyed the livelihood of these states rendering the economic and social survival of thousands of people a challenge.

Also, Weiss (2010) illustrates that the compensation in terms of physical damages was at a high of $ 20-50 billions. Among the litigants, this amount was believed to be the grant judgement ever to be delivered. Similarly, the spill brought about many groups and individuals seeking compensation.

For instance, groups such as the hotel owners of Florida and captains of charter boats sued the company as a result of losing customers. Also, about 15,000 fishermen in Louisiana sued the company by claiming the oil polluted the habitats of fish challenging fishing activities (Hayward, 2010).

Another bizarre issue with this case is that there were both physical and non- physical damages occurring. However, under the Tort law, an appellant suing the organization, claiming for physical damages to property is limited to the economic loss but not on the damages inflicted on him/her.

Similarly, under the tort law, all the affected parties have to correctly confirm the exact damages caused so as to facilitate quick recovery of their business (Gardner, 2010). As in the case of a BP oil spill, there were many diverse plaintiffs such as the boat operators, sports fishermen and seafood sellers.

There were many ideological positions among the decision makers on how to approach the BP case. However, most arguments were inclined on the due course of the law. For example, the American Environmental Protection Agency (EPA) indicated that it would ban the company temporarily from securing new contracts with the government for it had failed to uphold business ethics in their business operations.

Similarly, the ideal of criminal justice was upheld by the US government (Amadeo, 2010). The government pointed out that the BP should compensate all the victims of the tragedy. BP had to abide by the decision of the government; it set aside over 40 Billion in fines and settlements, clean up costs on the oil spill and additional 16 billion demanded by the Clean Water Act (Dyer et al., 1992).

Similarly, whereas it is in the public domain that the BP oil rig blew up in the Gulf of Mexico, and everyone admits including the BP company, some people have not believed this argument. They feel that this was not a mere accident. It was their unwillingness to improve safety, hence, an intentional act of conspiracy.

Conclusion

BP oil spill is considered a corporate crime. It led to a lot of actions that were considered criminal. This contributed to the loss of life, environmental pollution and health issues among others. For instance, the pollution of the environment contributed to the extinction of endangered birds and other aquatic species. Similarly, it collapsed family units as some people migrated to other areas for safety and loss of jobs.

On commercial implications, properties were destroyed and businesses lost huge profits and business opportunities. For instance, tourist operators, fishermen and captains had their source of livelihood constrained.

References List

Alario, M. and Freudenburg, W.R. (2003). Paradoxes of Modernity: Scientific Advances, Environmental Problems, and Risks to Social Fabric? Sociological Forum, 17(2), 193-214.

Amadeo, K. (2010). Gulf Oil Spill, US Economy. Web.

Dyer, C.L., Gill, D.A., and Picou, J.S. (1992). Social disruption and the Valdez oil spill: Alaskan Natives in a natural resource community. Sociological Spectrum, 12 (2), 105-126.

Gardner, D. (2010). Bp Market Plunge Wipes Billions Off UK Pension Funds as Shares In Oil Giant Suffer Fresh Falls. Web.

Hayward, T. (2010). BP 2010; Strategy Presentation. New York, NY: BP Corp.

Steiner, R. (2010). The Largest “Accidental Oil Spill” in History; Lessons of Bp’S Deepwater Horizon Disaster. Web.

Weiss, D., C. (2010). BP Agrees to Pay $20 Billion into Compensation Fund. Web.

Yeager, P., C. (1980). Corporate Crime. New Jersey: Transaction Publishers.

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