BP's Gulf Oil Spill: Where Ethics and Legal Advice Collide


As oil continues to rise to the surface in the Gulf of Mexico, BP’s public reputation continues to fall. Its name is becoming synonymous with this environmental disaster much in the way that Exxon’s name was tainted in the wake of the Valdez tanker catastrophe in 1989. This is especially ironic given the recent effort that BP has made to brand itself as a “green” company that balances oil and gas exploration with the development of alternative energy technology.

I believe that the problem BP is facing in the aftermath of this disaster is a result of a lack of strong ethical guidance. Instead of doing the right thing, it appears that BP’s management has resorted to arguing the issue of liability in the court of public opinion. BP’s C.E.O., Tony Hayward, has recently said, “This was not our accident.” He has pointed to Transocean, the rig owner, and Halliburton, the company that constructed the concrete encasement that sealed the well, as the true culprits.

While company lawyers would be negligent if they failed to advise BP to avoid accepting legal responsibility for the disaster, this does not mean that BP should publicly blame others. It appears that the company’s public relations and legal positions have become entangled with BP resorting to finger pointing as its chief strategy. Such actions should be reserved for the courtroom, not the media. People are expecting BP to express sorrow and regret for the disaster, not cast blame and divert attention from its own actions. Its reputation is suffering as a result.

Modern business ethical theory and corporate responsibility emphasize the importance of taking stakeholder interests into account. Stakeholders are those parties that a company’s actions affect. In developing a public response to the gulf oil spill, BP had failed to properly place its stakeholders at the center of its strategy.

Instead of being fixated on legal liability, which primarily impacts internal stakeholders (i.e., management, employees, and shareholders), BP should have empathized with external stakeholders that will suffer from the oil spill. These include Gulf Coast fishers, nearby residents who rely on tourism dollars, those concerned with harm to wildlife, and those who simply enjoy the physical beauty of the area. Proper corporate responsibility could have involved BP, Transocean, and Halliburton working together to formulate a relief package to address these economic and environmental factors, regardless of who was ultimately responsible for the spill. By focusing on corporate liability in its public statements, BP has hurt all of its stakeholders.


Source by Greg Yanke