Case Study: BP Oil SpillBackgroundThis lesson has addressed the key components of ethical principles in crisis communication, including the ethical principles of responsibility, accountability, and humanistic care. The case of BP oil spill in 2010 provides an important example for understanding how these principles are valued by public opinion in a crisis situation, and how the communication actions by a corporation in this type of circumstances might have long-term effect on the brand image of the organization.On April 20, 2010, a BP’s Deepwater Horizon oil rig exploded, causing what has been called the worst environmental disaster in U.S.
History and taking the lives of 11 rig workers. For 87 straight days, oil and methane gas spewed from an uncapped wellhead, 1 mile below the surface of the ocean. The federal government estimated 4.2 million barrels of oil spilled into the Gulf of Mexico.Mistakes in Initial ResponseAccording to NPR, BP’s action has become a textbook example of how not to do crisis management. BP executives declared it was not their accident, blamed their contractors and made the company look arrogant and callous. CEO Tony Hayward repeated insensitive comments in public, like this one: “There’s no one who wants this thing over more than I do. You know, I'd like my life back.” He also suggested that the environmental impact of the spill would be “very, very modest.” Images of Hayward attending a yacht race just 48 hours after a hostile interrogation by a US congressional committee on the oil spill, provoked sharp criticism on both sides of the Atlantic. Although the company, formerly British Petroleum, officially changed its name to BP in 2001, Americans consider it a foreign company even though it has just as many American shareholders as British ones, and its biggest operations are in the United States.PR ActionsTo sooth angry Americans, BP aired a multimillion-dollar national TV spot in June in which Hayward pledges: 'We will make this right.'
Hayward also promised BP would clean up every drop of oil and “restore the shoreline to its original state.” President Barack Obama said the money spent on the ads should have gone to cleanup and compensating devastated fisherman and small business owners. The ad indicated that the company didn't even follow its own internal guidelines for damage control after a spill. Its own spill plan, filed the year before with the federal government, says of public relations: “No statement shall be made containing any of the following: promises that property, ecology or anything else will be restored to normal.”BP also bought online ads that pop up when people search for information about the oil spill on Google and Yahoo. The ads, which link to BP's own oil-response sites, typically appear above or to the right of other search results.
BP said the idea was to help people on the Gulf find the right forms to fill out quickly and effectively. However, many people suggest it's a move to steer searchers away from bad press for BP.Crisis management experts stated the only reliable way to repair BP's badly tarnished image should be the obvious one — to plug the hole where oil was still leaking out. It would take nearly 3 months before the leak was stopped, and nearly 5 months before the well was declared effectively dead. Public relations experts pointed out that BP ran its crisis communications in the same “ham-fisted” manner they’ve run the clean-up operation in the Gulf.' BP's handling of the spill from a crisis management perspective will go down in history as one of the great examples of how to make a situation worse by bad communications,' said Michael Gordon, of New York-based crisis PR firm Group Gordon Strategic Communications. “It was a combination of a lack of transparency, a lack of straight talking and a lack of sensitivity to the victims. When you're managing an environmental disaster of this magnitude you not only have to manage the problem but also manage all the stakeholders.”ConsequencesBP attempts to convince people that it appears the Gulf of Mexico is healing itself after a while.
In 2015, BP released PR materials that highlight the Gulf’s resilience, as well as a scientific report showing the area is making a rapid recovery. But evidence is mounting that five years after millions of gallons of oil spilled into the Gulf, wildlife there is still struggling to rebound.In June 2016, BP issued its final estimate of the cost of the spill, the largest in U.S. The total amount for the cost of the 2010 oil spill in the Gulf of Mexico was $61.6 billion. Under the settlement with BP, five states in the Gulf area and local governments will receive payments over the next dozen years.
The funds will enable them to ramp up vital restoration work along the coast. BP continues to settle claims from business owners and residents who say they were harmed.Moral of the StoryIn conclusion, this is a classic case example of why organizational decision making in crisis situations should be based on ethical principles such as accountability and responsibility. Public criticism and outrage following the incident not only focused on the oil spill, but on the lack of remorse and sincerity from the top management in crisis response, particularly the lack of sympathy to the victims of the disaster. The failure by BP’s leadership to respond to the disaster with sufficient speed and attention demonstrates that crisis preparedness and ethical guidelines should become part of the organization culture.Module 9.
.Its Corporate CultureFor a broad overview, check out reporting from ProPublica on, a New York Times, this McClatchy on BP's record of legal and ethical violations, and the Center for Public Integrity's of safety problems at BP's Texas City and Toledo, Ohio, refineries.Twenty years ago, BP was nothing like the powerful multinational corporation it is today. In 1995, Lord John Browne, an engineer and BP manager with a reputation as an aggressive cost-cutter, became CEO. Browne, described in this as the 'enigma who brought BP in from the cold,' was known for making big deals. In the late '90s and early 2000s, BP bought Amoco, Arco and five other companies - quadrupling the company's value.
This New York Times describes Browne as trying to turn BP into a company 'that is as much at home in Silicon Valley as in the Oil Belt.' Browne was also known as the rare oil industry executive who acknowledged climate change; in 1997, 'There is now an effective consensus among the world's leading scientists and serious and well-informed people outside the scientific community that there is a discernible human influence on the climate and a link between the concentration of carbon dioxide and the increase in temperature,' and he tried to BP as 'Beyond Petroleum' in the early 2000s. The company's new logo featured Helios, the ancient Greek sun god, and Browne was dubbed the ' by the news media.Browne surrounded himself with a group of young executives he dubbed his ' - named after the cartoon Teenage Mutant Ninja Turtles.
One of those turtles, Tony Hayward, an engineer who headed oil exploration worldwide, was chosen to succeed Browne after Browne was forced out following a scandal about his private life. Hayward about BP's problems at Stanford Business School in July 2009 and he BP's safety culture.Hayward himself was forced out after the Deepwater Horizon spill and replaced by Bob Dudley, an American who had headed BP ventures in Russia. This of Dudley from The Guardian depicts the American's 'calmness under fire' as a reason he was elevated to the top job. Texas Refinery ExplosionOn March 23, 2005, 15 people died in an explosion at BP's Texas City, Texas refinery; 170 more were injured. Two months before the explosion, on Jan. 21, consultants hired by safety-conscious Texas City engineer Don Parus published an assessment of the 'safety behavior and culture' at the refinery.
The report included an employee survey in which workers talked about their 'exceptional degree of fear' and their fears of dying. Read the or the.
And the previous year, in the fall of 2004, Parus had given a presentation to BP to Texas City plant leaders and to BP refining and marketing chief John Manzoni in London. PowerPoint from the presentation state that 'Texas City is not a Safe Place to Work,' and includes a list of workers who died at the plant.The 1200-acre Texas City refinery, which was built in 1934, was acquired in 1999 as part of BP's $61 billion takeover of Amoco. While under Amoco management, major upgrades to the refinery had been postponed. For example, in 1991, Amoco considered replacing the antiquated blowdown drums used to collect volatile liquids and gasses in an emergency with safer, modern flares. They decided against it; it was a question of saving money. A 2002 PDF indicates that BP had also considered updating the blowdown drums but decided against it. 'We need to decide if we want to invest $150,000 now to save money later on,' wrote one employee.
A senior manager wrote that capital expenditure is 'very tight. Bank the $150,000 in savings right now.' In the March 23, 2005 explosion, observers saw a geyser of excess gas and liquid 'flying out the top of' the blowdown drum.The U.S. Chemical Safety Board launched a two-year investigation, which resulted in the publication of this PDF on March 20, 2007.
The CSB also released a 54-minute video about the explosion titled ',' which details the investigation and BP's safety, practices and standards, and includes a of the explosion.A second, commissioned by BP, was led by former Secretary of State James Baker. It concluded that 'BP has not adequately embraced safety as a core value.' BP Senior Group Vice President for Safety & Operations John Mogford gave on 'Lessons Learned' from the Texas City explosion at an industry conference. 'This was a preventable incident,' he said. 'It should be seen as a process failure, a cultural failure and a management failure.'
The Galveston County Daily News has extensive coverage of the explosion on its, which includes an article about OSHA's record 2009 against BP for lack of compliance with safety regulations, and from more than five years of reporting on the explosion and its aftermath. BP initially contested the $87 million fine, but $50 million in August 2010.Brent Coon & Associates, the lead counsel in the litigation following the explosion, that features evidence releases, a library of media coverage, and Eva Rowe's lawsuit against BP. Rowe, whose father and mother both died in the explosion, refused an initial settlement with BP that would have prevented her from talking publicly about the company. Instead, she filed a lawsuit against BP, which she eventually for an undisclosed amount, $32 million donated to charities of her choice, and the release of 7 million internal BP documents, many of which became the basis for subsequent investigations. You can find out more about her advocacy at her.In June 2010, Galveston County Daily News reporter T.J.
Aulds that BP intentionally released 500,000 pounds of poisonous emissions over a period of 40 days beginning in April 2010. You can about this incident on ProPublica's website. The EPA is currently investigating, and the state of Texas in August 2010.
Alaska Accidents and SpillsBP's vast Prudhoe Bay oil field on Alaska's North Slope represents 8 percent of America's domestic oil production. But as detailed in this, a rash of problems in BP's Alaska operations raise questions about BP's commitment to safety.One incident, in 2002, involved oil worker Don Shugak, who was injured when a Prudhoe Bay well he was inspecting blew up; he lay in a coma for six weeks after the incident. This details what led to that explosion.
Shugak, who suffered broken bones and burns, settled with BP for an undisclosed sum and agreed not to speak to the media as part of his settlement. His accident spurred workers to bring safety concerns to the attention of BP management, but workers tell FRONTLINE no action was taken. Workers at BP's Prudhoe Bay facilities had brought safety concerns to BP management before; in 2001, management issued which details worker concerns about cost-cutting and safety and outlines recommendations to fix the 'fundamental lack of trust' at the facility.In March 2006, 260,000 gallons of oil leaked from a BP pipeline in the worst spill ever on the North Slope. The reason was corrosion caused by sediment buildup in the pipe, which hadn't been cleaned in over a decade. Five months later, BP was forced to after a second spill.In the aftermath of the Alaska spills, questions were raised about the quality of the pipe inspections, many of which are conducted by subcontractors, such as Acuren, who was responsible for pipe inspections at Prudhoe Bay. ProPublica and FRONTLINE have learned that some pipe inspectors were not certified or trained properly.
An, from an attorney who routinely deals with BP worker complaints, offers insight into Acuren supervisor Martin Anderson's attempts to alert officials to 'the deficiencies within Acuren's inspection program on the slope.' Some of these deficiencies include violations in compliance requirements, inadequate record keeping and the hiring of uncertified inspectors. BP has since acknowledged that more than 19 inspectors, responsible for more than 13,000 inspection points, were uncertified. They say they've corrected the problem and that at least 10,000 inspection points have been re-examined.On Jan. 14, 2010, Reps. Henry Waxman D-Calif. and Bart Stupak D-Mich.
sent to BP, asking for updated safety information about the Trans-Alaska Pipeline System in light of several additional close safety calls. You can read ProPublica reporter story on the letter.Here is additional coverage on the 2006 Alaska spills from, as well as and NPR's on the congressional response to the incidents. According to this May 2010 Alaska Dispatch story, BP is stemming from oil spills at Prudhoe Bay. Thunder Horse RigIn July 2005, Hurricane Dennis swirled over the Gulf of Mexico; in its path was Thunder Horse, BP's showcase platform, which towered 43 stories above the water. When the storm hit, BP's state-of-the-art rig toppled over. After an investigation BP discovered that the storm wasn't the problem; as ProPublica reporter explains: 'It turns out that BP engineers had incorrectly installed a number of valves that are meant to control the flow of water in the supports that keep the rig afloat. And the rig, as a result, took on water instead of shedding it.'
On January 2007, the Minerals Management Service (now known as the Bureau of Ocean Energy Management Regulation and Enforcement) came out with its PDF on the oil platform accident. Among hte causes cited for the accident is 'human error.' Read more about the Thunder Horse incident in from The New York Times. Also take a look at this from the Financial Times that summarizes the geological and engineering issues facing BP and other companies engaging in deepwater drilling in the Gulf of Mexico. Deepwater Horizon Spill: ReportingOne of more than 100 BP oil rigs in the gulf, the Deepwater Horizon rig, which exploded on April 20, 2010, once again brought to light BP's safety problems, this time in the form of the worst environmental disaster is U.S. History.This Times-Picayune identifies the five human errors and the one major mechanical error - the malfunctioning blowout preventer - that led to the gulf oil spill.
You can also explore this related that illustrates each of the six errors. ProPublica has this of BP's internal report on the gulf spill.Though it is difficult to assess the full, long-term impacts of the spill, some reporting has sought to identify some of its possible lasting economic, environmental and health effects. This Times-Picayune examines how the spill, as well as the moratorium on drilling, disparately affected some local industries more than others. BP has set up a $20 billion for compensation for damages incurred by victims of the spill. This New York Times investigates some of the challenges of addressing compensation claims, particularly instances of fraud.This in the Financial Times examines some of the health effects, including respiratory problems, cancer and mental health problems that the spill might trigger for people living and working in the gulf region.
It also cites an earlier conducted by the U.S. Institute of Medicine, which surveyed the potential adverse health effects resulting from the spill. Six months after the explosion, this Associated Press includes the views of scientists who measure the longer-term ecological impacts of the spill. And The New York Times profiles some of the spill's in the gulf, particularly on wildlife.And in Esquire offers an incisive and humanizing portrait of the 11 workers who died at the Deepwater Horizon rig the night of April 20.For further reading, the Wall Street Journal has these from a panel of experts on 'the world's thirst for oil and the hazards of that dependence.'
Deepwater Horizon Spill: MultimediaOnline coverage of the gulf spill included a number of extensive multimedia features and interactive graphics that paint vibrant pictures of the spill and its impact.The Financial Times' chronicles the explosion through Aug. 4, along with estimates of the number of barrels of oil captured and the cost of cleanup per day. You can also view that depicts the spread and reach of the spill at different stages.The New York Times' gulf spill multimedia includes a tracking the spill's spread, impacts and efforts to cap it.
It also investigated the spill's, including a map and data of sea turtles, dolphins and birds that were found dead. This related features photos from the investigation into the notably higher number of animals found dead in the Gulf of Mexico in comparison with years past.And the Boston Globe's 'Big Picture' produced seven photo galleries of the spill, from late April, when the oil first approached Louisiana's coast, to August, following the first successful efforts to cap the well:.Deepwater Horizon Spill: Where Were the Regulators?Since the spill, the government has come under criticism for failing to regulate more thoroughly deepwater drilling and offshore oil production. This Wall Street Journal investigates two decades of oil exploration to demonstrate how years of lax government regulation, in an effort to foster the offshore oil production boom, led up to the gulf spill.
This related depicts the offshore field production of crude oil over the years, illustrating the 'deepwater oil rush.' Additionally, in Rolling Stone examines the industry's self-regulation during the Bush administration and argues that the Obama administration ignored ample warnings and failed to crack down on the Minerals Management Service (MMS). Please enable JavaScript to view theIn order to foster a civil and literate discussion that respects all participants, FRONTLINE has the following guidelines for commentary.
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What Did Bp Do Wrong In The Oil Spill
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