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The BP oil spill in April 2010 was the worst tragedy in the history of the United States. The Deepwater Horizon, owned by BP Global, exploded along the Macondo Prospect, which resulted not only in the deaths of the service crew aboard the oilrig but also to the widespread contamination of the Gulf that damaged sea life and habitats as well as the livelihood of people living along the coast (Kibert et al. 2012, 143). Shortly after the incident, people criticized BP Global because of the company’s failure to reveal information that would assure or comfort the families of the service crew in the oilrig and the people who were living near the Gulf. Many people waited for BP Global to talk about the situation, communicate assurances, or issue an apology and discuss what kind of measures the company was taking to mitigate the impact of the oil spill or make up for the damages, but the people heard nothing from the company. “BP added insult to injury by failing to share information with those affected and with the public at large” and the company ignored social media sites, which could have been helpful in delivering information to those who need it (Notter & Grant 2011, 104).
Due to the errors of BP Global, the company is expected to have implemented changes and improvements to its Corporate Social Responsibility (CSR) practices since the oil spill as a means of showing that BP learned from its mistakes. Moreover, CSR practices and reporting in BP Global is essential because the company’s operations have a significant impact on the environment and the future of the younger generations. One primary issue that oil companies like BP Global should address is their policies regarding sustainability. Since oil is a finite source, oil companies should practice CSR in order to slow down depletion while, at the same time, taking care to avoid accidents that would harm the environment.
The Role of CSR at BP Global
Prior to the oil spill, BP Global was reported to have one of the most accurate and trusted CSR profiles. “Several NGOs have publicly acknowledged BP for being one of the first TNCs to endorse a human rights policy and for its transparency in allowing public scrutiny of its operations and regular reporting of its social and environmental impact” (Banerjee 2007, 55). Through BP Global’s CSR practices, the company not only establishes good relations with stakeholders, develops a community within the organization that values sustainability and CSR practices, nurtures a workplace that thrives on ethics, but also enables the organization to improve its process performance. For instance, guided by corporate responsibility and sustainability principles, BP Global adopted “a firmwide cap on greenhouse emissions combined with corporate emissions trading system” (Dayal-Gulati 2007, 5). As a result, BP Global was able to curb the company’s greenhouse gas emissions and carbon contribution into atmosphere and saved on operational cost, while assuring the public and its stakeholders of its ability to abide by principled practices.
Essentially, CSR disciplines companies and provides a benchmark that guides their practices and operations. Although BP Global was applauded for its CSR practices prior to the oil spill, the company was forced to enhance its efforts after the accident. In the company’s most recent report, released in 2011, BP Global brands the company as a “stronger, safer BP.” Prior to the oil spill, BP Global utilized CSR to improve its process performance, but in 2011 the company chose to focus on strengthening the company’s ability for compliance by enhancing its safety and risk management practices. BP Global consistently evaluates operational and management risks and has restructured the company, focusing on three main areas of operation: exploration, developments, and production. BP Global has also promised to design particular company’s responsibilities to make up for the damages caused by the oil spill both to people and the environment through the continued internal investigation of the case (BP Global 2011). BP Global includes stakeholder input through challenge. It is currently looking for ways to address the energy sustainability challenge through thorough research conducted with the participation of thirteen universities that aim at coming up with various strategies and practices that BP could adopt in order to address sustainability issues concerning oil, gas and renewable resources. In this regard, BP Global is both trying to reverse the damage of the oil spill, improve its performance, and address the issues that the oil industry must face: sustainability and the oil resources dwindling.
BP Global’s CSR report also includes the company’s dedication to building a strong team of staff and employees who would “reflect the qualities and behaviours that distinguish BP at its best” and “the behaviours that are expected of everyone” (BP Global 2011). According to BP Global, the company evaluates the performance and progress of managers and employees through consistent and timely reviews. To sustain employee compliance to the BP Global’s values and ethical practices, the company has aligned performance and rewards to values that introduce “safety” and “long-term perspective”. This means that the company has set benchmarks of safety and ethical conduct, which employees should meet, and comply with in exchange for rewards and recognition.
Aside from using CSR to correct the errors and make up for the damages caused by BP Global’s negligent practices and engaging the company’s employees, BP Global has also adopted new practices to improve its management and operations approach. The company has conducted a review to determine best practices in contractor management and implemented new frameworks for the technology use in the company – primarily for the early detection and prevention of risks and advanced career planning and development. To appease the public, BP Global has been involved in shoreline clean-ups and the identification of environmental damages due to the oil spill in order to determine possible solutions that it can provide to reverse or lessen those consequences. Since 2010, BP Global, in cooperation with the US Coast Guard, has been surveying the Gulf, establishing clean-up standards, and participating in clean-up operations. BP Global has also been in contact with the Natural Resource Damages (NRD) to determine what possible actions the company could undertake in order do to alleviate the effects of the oil spill. As a reformative measure, BP Global has also reported that it has “compensated individuals, businesses, government entities and others who have been legitimately impacted by the oil spill” (BP Global 2011). BP Global also provides funds that help seafood and tourism businesses in the Gulf. In 2011, BP Global has invested over $80 million and the company is expected to provide $90 million worth of investments for tourism, seafood testing and marketing by the end of 2013.
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Due to the oil spill, BP Global has gained a negative image and much criticism from the public. Reports about BP before the oil spill have showed that it contributed to the positive perception of the company. However, after the oil spill and until today, BP Global has not yet regained the trust of society despite its efforts. The consequences of the oil spill are far greater than what the company has accomplished in terms of CSR so far. Therefore, if the company aims to earn the people’s trust and rebuild its positive image once again, it must continue improving its CSR practices in the years to come.
Based on information gleaned from BP Global’s CSR, it may be stated that CSR practices play an important role not only in the company’s social relationships with its stakeholders and the public, but also in its operations and other practices. For instance, CSR could be used as a benchmark to guide improvements on process operation. Companies can base their future plans by considering the standards and trends in CSR, taking the BPGlobal’s case as a sample. Since common trends in CSR include the adoption of practices and systems that help the company reduce carbon footprint and save on cost, companies can base their future acquisitions based on that knowledge. Moreover, CSR practices also guide research and development issues and investment allocation. Although CSR may initially appear to be primarily focused on a company’s social relations and sustainability practices, CSR practices also guide human resources management (HRM). At BP Global, for instance, they use technology for career planning and development as well as for continued training. Moreover, CSR practices help align HRM practices to the company’s values and ethical principles. At BP Global, managers and employees are compensated and rewarded when they display or comply with the company’s principles.
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As for recommendations for BP Global, the company needs to take pains consistently and continuously over the next decade to: (a) reverse the detrimental outcomes of the oil spill, (b) make up for the company’s errors – negligence and lack of involvement in appeasing the public, especially those who were affected by the spill – through its continues investments to help boost the fishing industry and tourism in the Gulf, (c) improve the company’s process operations through gradual research and development and adoption of practices and systems that decrease BP’s carbon gas emission into the atmosphere, (d) implement evaluative measures to ensure early detection and risk assessment, and (e) implement preventive measures to make sure that the incident will never repeat again.