Ethical and legal effects of the gulf oil spill

 

 

 

 

 

 

 

Running Head: Ethical and Legal Effects of the Gulf Oil Spill

Name:

 

 

 

 

 

 

 

 

Course:

 

Instructor:

 

Date:

Ethical and Legal Effects of the Gulf Oil Spill

Introduction:

The Gulf oil spill that began on April 2010, presents numerous ethical and legal questions that need to be answered. British Petroleum (BP) Oil Company is under heavy scrutiny on its ethical and legal responsibility in this issue. There are specific codes of ethics that can be related to this issue. The ethical effects of the spill will result in a change on the ethical guidelines that have been used in previous years. Additionally, the oil spill has presented numerous legal consequences that BP and several other companies have to face. Specific federal and state laws are relevant to this case. Apart from the financial expenses, the gulf oil spill resulted in various legal outcomes for the different companies that are involved in this case.

Discussion:

First, it is important to note that any company has moral and ethical obligations to its stakeholders. Stakeholders in this case mean all the people that may be affected by the activities of the company (Bergin & Kerber, 2010). This includes internal stakeholders who are the managers and employees of the company. It also includes external stakeholders who are the people outside of the company and maybe affected by the activities of the company. BP oil has the moral and ethical responsibility to plan all its activities in a manner that ensures safety for the people, wildlife and property and environment of the surrounding area. Its activities in the Gulf of Mexico are subjected to these ethical guidelines that define how a company can act in any circumstance. The effects of the oil spill have resulted in numerous ethical questions being asked on the drilling activities that BP is involved in. In an event that a company does not follow the set code of ethics, punishment from corporate organizations is unavoidable. The activities of BP and its partner companies resulted in harm to the environment and losses to the people. Studies show that the company did not follow the set code of ethics in its drilling activities. The company faces several ethical consequences from this spill.

BP has a defined code of conduct that defines the company’s activities in relation to other factors like environment and people. In previous years, the company has come up with a strategy that has seen the company advertise itself as an environmentally friendly company. However, after the gulf oil spill, many questions were raised on the implementation of this strategy. One of the major ethical effects of the oils’ spill was the eviction of BP from the FTSE4GOOD ethical investment series, which is an index that recognizes companies that follow the corporate code of ethics (Bergin & Kerber, 2010). The index is globally recognized and follows certain standards that are accepted worldwide. A company’s placement on this index is vital in attracting investors and clients who value standards. Additionally, the company share index may rise and fall depending on how investors value this placement. In September 2010, the compilers of the index decided to expel BP from the list of company’s who follow the assigned standards. The gulf oil spill was one of the contributing factors to this expulsion. Additionally, the company’s previous environmental records were lacking thus leading to the decision to expel the company from the list. This move resulted in a drop in the company’s share price further showing the importance of a company’s placement on this index.

The ethical effects of the gulf oil spill can also be seen from the expulsion of BP from the Dow Jones (DJ) sustainability Index (Bergin & Kerber, 2010). This is also another renowned index that analyzes a company’s ethical competitiveness in the corporate world. By appearing on this index, a company is more attractive to investors and customers. In summary, the gulf oil spill has led to ethical questions being raised on whether BP follows the international ethical guidelines. Additionally, the company has an ethical responsibility of cleaning the waters to make them safe for people and animals. The environmental impact of the oil spill is both an ethical and legal issue. Companies hold a responsibility of protecting the environment by ensuring that their operations are in line with the environment protection systems. In this view, the gulf oil spill, presents an ethical responsibility to the companies concerned especially BP.

On the legal side, there are several laws that are relevant for this case and may be used against the companies responsible for the spill. One such law is the Oil Pollution Act (OPA) of 1990 (Riesel, 2007). This law was passed in 1990 after Exxon Valdez was found responsible for a similar oil spill. This law is the principal governing act on matters related to oil spills in the United States. This law gives a clear guideline on how to deal with oil spillage into the country’s waterways. According to this act, a person or company responsible for oil spillage has the sole responsibility for cleanup and containment of the oil spill. Even when the government intervenes, the company must cater for all costs for the clean up. This law does not put a limit to the amount of money that a company can pay for the cleanup of the oil spill. In this perspective, BP and its partners have been legally held responsible for the cleanup (Bowman, 2010). Under this law, if the persons or companies responsible for oil spills do not meet the financial responsibilities for the cleanup, additional penalties may be imposed on them. This shows the extent to which a company can be held responsible for the oil cleanup. The government determines the amount of money that is used in the cleanup and the companies responsible meet this cost.

Secondly, under this Act, persons and companies responsible for oil spillage have the responsibility of paying damages for the losses incurred by people or businesses affected by the oil spill. Additionally, the companies are also liable to paying damages to the government for its loss in tax revenues due to the spill (Bowman, 2010). The destruction of natural resources is also a liability that the companies have to meet by paying the government any outstanding amounts lost due to the damage to natural resources. The effects of the Gulf of Mexico oil spill are already visible from the numerous cases that have been filed against BP and its partners. Fishermen, hotel owners and operators of tourism businesses, have filed cases that demand for the payment of different amounts in damages due to the losses incurred after the spill. The companies are expected to pay huge amounts in terms of damage costs in the legal cases presented. However, the OPA gives a limit of $75 million as the maximum amount that a company can pay in damages for oil spillage (Bowman, 2010). As an effect of the spill, this law has been under review by the Congress as some people think that this is too lenient considering the effects of the spill. In this perspective, the OPA holds BP, Transocean and the other companies responsible for the payment of the damages caused to people and business.

Another law that is applicable to this case is the Clean Water Act (CWA), which protects the American waters from contamination of any kind (Riesel, 2007). This act recognizes the negligent release of oil into American waters as a criminal activity. The CWA also recognizes as criminal, any act meant to withhold information about oil spillage from the government. For example, BP has been accused of withholding specific information that defines the amount of oil that has been spilled into the water. Apart from spilling the oil, withholding information is a crime in itself. This act defines penalties according to the amount of oil that has been spilled into the water. For example, a company can be charged about $1,100 per barrel of oil for unintentional spillage (Bowman, 2010). However, if investigations discover any form of negligent or intentional spillage, the company has to pay higher criminal penalties. In the gulf oil spill, investigations are still going on to ascertain the amount of oil that has been spilled into the water. In this case, the government is obligated to provide evidence of negligence or withholding information in order to prove a criminal case against a person or a company. Additionally, for people found guilty of negligent oil spillage, an appropriate sentence is given in a court of law. In this view, the Clean Water Act presents a legal option that the federal government can use against BP and other partners.

Another law that is applicable to the gulf oil spill is the Endangered Species Act (ESA) (Riesel, 2007). This act is aimed at protecting animals or plants that have been listed in the endangered species list. Any activities that a company takes must be in line with the protection efforts of these species. Additionally, people or companies operating in areas where these species live have to acquire permits from the federal government that gives them authority to operate in such areas. Any acts that degrade the endangered species act are criminal acts punishable by law. Punishments include payment of criminal penalties or revocation of the permits granted in the first instance. The gulf oil spill has resulted in the killing, displacement and destruction of habitat of several animal and plant species most of which are endangered (Bowman, 2010). Through the different agencies responsible for marine life, the federal government can sue the companies responsible for the oil spill. This often leads to the payment of civil fines, which are decided upon by the court.

The Migratory Bird Treaty is also applicable to this case as it makes it illegal to harm in any way bird species that are defined in the treaty (Riesel, 2007). Any violation to this treaty results in civil fines or imprisonment as defined by the court of law. In the Gulf of Mexico, the brown Pelican has been adversely affected by the oil spill and this may lead to the payment of legal fines by the companies responsible for the spill (Bowman, 2010). The Marine Mammals Protection Act is also an applicable law as it gives extra protection to the marine mammals. In summary, the legal effects presented by the gulf oil spill can be seen from the legal cases that have been filed against the various companies related to this spill. Individuals and business owners affected by the spill have already filed for damages against the different companies. However, the government is yet to file criminal charges against these companies as it is still conducting investigations.

Conclusion:

In conclusion, the ethical and legal effects of the gulf oil spill can be seen from the discussion above. The companies responsible for the spill have been affected negatively by the spill. Similarly, the companies face various legal battles as a direct effect of the oil spill. Different laws are used to protect and provide legal action against people or companies who perpetuate oil spillage.

 

 

 

 

 

 

 

 

 

 

 

 

 

References:

Bergin, T., & Kerber, R. (2010, September 10). BP kicked out of ethical index. Financial Post. Retrieved from http://www.financialpost.com/news/mining/kicked+ethical+index/3506731/story.html

Bowman, Q. (2010, June 10). Oil Spill liability, a complicated legal web. PBS Newshour. Retrieved from http://www.pbs.org/newshour/updates/politics/jan-june10/oillaw_06-04.html

Riesel, D. (2007). Environmental enforcement: Civil and criminal. New York, NY: Law Journal Press.