BP Oil Ethical Issues

2476 words (10 pages) Essay in Management

30/05/17 Management Reference this

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For a company to become a good corporate citizen it must follow the rules put in place by the government to where the company’s operations activities are taking place, this also include protecting the environment and local people in the community from any harm from noise or water or air pollution. This report will explore more about the responsibilities BP have for making moral judgement and how their employees are involved and empowered. Also will have information on ethical issues affecting their operational activities and how do they ensure good relationship of employer and employee. Ending part there will be a summary about ethical code for oil industry.

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INTRODUCTION

Considering ethics, a corporations’ responsibility for taking actions that are morally sound needs to change. Reviewing the role of the individual, corporations are being subjected to the role of moral agent. The question is, can a corporation, composed of people, be held responsible for its own action as a moral agent? The answer is complexed from an individual’s viewpoint with that of the corporation. Werhane (1989:821) viewed that corporation by law is identified as a person that is frequently held responsible for business practises. However, Werhane continues, if firms are not moral agents, they do not become morally liable and thus the onus is passed onto the individual person. [1] This becomes complicated because how can individuals become solely responsible for business practises? Essentially, the issue of moral agency and legal implications needs to be revised so that it is made clearer who is actually responsible for taking actions that are morally sound.

BP’S RESPONSIBILITY FOR MAKING MORAL JUDGMENTS

Moral judgement is the way of evaluating the behaviour of what is right or wrong and making a judgment for it or system of moral conduct. Some psychologist such as Kohlberg point out levels of moral development, that we as individual need to develop ourselves morally before making any moral judgement. BP is one the world’s leading company selling fuels and products to different countries. They have the responsibility of making moral judgement and taking actions that comport with morality to its people and the environment. Actions put in place are as follows:

They have promised to reduce emissions by 10% project started from 1990 to 2010

They have Introduce ultra low sulfur fuels in 60 different cities around the world believing products with low sulphur with emissions that would approach zero

They are also changing the course of extracting out gas flaring in exploration and putting more effort in increasing production operations

They are promoting natural gas as plans for world’s future needs with the investment around $4billion which started in 2005 to avoid fossil fuel promoting new technology to reduce their carbon foot print

BP’s sunrise joint venture in Canadian oil sands that have contributed energy to North America. They are using new technology steam assisted gravity drainage close to reservoir engineering to extract energy minimising greenhouse gas emission which is associated with oil sands production. They stated that they are planning to follow environmental and social practices which are managing water, land use and community relations.

In their practice of making moral judgements they must consider the importance of people, employees’ wages and environment.

PEOPLE

BP have responsibilities internally of protecting their people who are the employees by providing them with good working environment making sure they don’t get harmed, also externally these are their stakeholders, investors, competitors and customers. Moral judgement they need to make is by identifying what’s right for people though in the business point of view sometimes it can be difficult to do right ethically meaning profit will be less when consider practising ethics. BP have provide welfare to their people such as medical allowances, dental services etc

WAGES

An organisation’s success is being determined by employees’ high performance, in order for them to be motivated a company need to provide good wages and salaries to their employees so that they could meet their daily needs, such salary should not be too low that employees could fail on meeting their needs. BP has the responsibility of making sure employees are being paid for their leaves, sick pays, paternity and maternity leave.

ENVIRONMENT

Organisation such as BP have the responsibility of protecting its environment from any toxic substances that could harm the environment these are people, animals, natural vegetation. Environment rules are being set by the government; organisations need to protect its environment and their employees from air and noise pollution by using non-fossil fuels, disposing waste in a manner that is friendly which could not cause any problem to the environment. They need to update their equipments from destruction that could harm the environment like in the case of BP oil spill which occurred on 20th of April 2010 in Gulf Mexico which destroyed living things in the sea.

By making sure moral judgements are being practiced, an organisation need to ensure employees are involved and empowered. At the same time they sustain their energy company for the environment.

MECHANISM USED BY BP TO SUSTAIN THEIR DEVELOPMENT

BP decided to define sustainability as means of doing more for the environment with less, continue saying is about changing their ways of extracting and producing oil and gas. BP has stated in their company website that they recognise the importance environment and its social challenges faced by the world in the 21st century. They have the belief also and capable of resoling some issues and finding other way of addressing to such issues associated with sustainable development. In their website they also continue to claim that they are producing natural gas which is not harmful and have an agreement with environmentalist but they don’t deliver the real commitment.

POSITION

As in motivation theory, Maslow point out esteem as being part of human need, they need some sort of approval in the society after testing their abilities that bring changes in the society. This is same as individuals in an organisation they need positions such as manger, director, supervisor etc, so that to satisfy their ego and feel been valued by the organisation.

TRAINING AND DEVELOPMENT

Employee have the right to develop their careers in another stage, organisation need to make sure they give their staff opportunity to develop themselves by providing training to them that will help them and the organisation as well. Organisation making changes from immoral practices to moral ways, they need to provide business ethics training to their staff so that could know and understand about the changes, that way staff will feel motivated that they are included in any decision making about change of doing things.

GOOD WORKING ENVIROMENT

In order to achieve employee involvement and empowerment, Organisation such as BP need to provide their staff a safe working environment where it’s free from noise and air pollution. Employees need the environment which is not stressful, they need to be included in the decision making, environment where they could express their feelings also they need the environment where they could make relationship with each other as part of the team. This will motivate all human beings need to make friends and interact.

REWARDS

Is another mechanism for achieving employee involvement and empowerment in today’s business. As being discussed previously about making moral judgement organisation need to identify the need of individuals to seek rewards to the contributions they made towards organisation’s success. Kohlberg suggested it in Preconventional level one where individuals in this level are motivated seeking for reward as approval [2] .

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ETHICAL ISSUES AFFECTING THE OPERATIONS ACTIVITIES OF BP

BP operates globally as a system of internal control which operates from corporate governance the processes which are detailed. BP claim to have the system put in place in their operating activities by abiding to the laws, risk management and environmental issues. They combined together people, processes and plant to make a good performance in BP. There are companies that behave like corporate citizen but not BP due to number of oil spill cases happened in different areas where they operate causing environment disaster in those areas, and because high gas usage by the people that brought impacts to the climate change as the way we are facing now, the weather is now unpredictable.

BP runs their operations to the developed and developing countries. In the developing countries they have a great responsibility of protecting and respecting human rights and all other ethical issues involved in those areas. They need to take necessary measure of making sure they don’t cause any impacts to those local communities surrounding them, by investing in such communities such as building hospitals, schools, provide employment to the local people etc.

Again in those developing countries they need they have the responsibility of avoiding child labour as its unethical practices. In UK recommended age for a child to start working is from 16 but in developing countries is from 18, for BP to ethical need to check people age before employing them. BP need to give women opportunity in various positions and also right to make decisions, this can be seen in their website women having their own social network around BP called The BP Women International Network, in here they provides global forum for women for their own issues in an informal ways. It is a group of local women working in the BP encouraging women in their global network to continue working with BP and pursue their careers. BP has also the duty of not involving themselves into corruption or taking bribery from people or any organisation body which is classified as unethical.

BP’S CONTRIBUTIONS TOWARDS IMPROVING GOOD RELATIONSHIPS WITH THEIR EMPLOYEES

BP managed to make some investments of $106.8 million in 2009 with the local communities that help their business and sustain development. They have created partnership with local companies whom they supply them their products where such companies having business link with other companies having connection with local dealers, such local companies can become BP suppliers that could help BP to find high quality goods and services from local dealers.

BP are providing their skills, resources and investment to the local communities that will help them in their day to day activities, such as they have invested in the education by building schools in different areas in developing countries such as in Asia, Africa and South America so that children of their employees could go to school while their parents could be at work. In Germany they have encouraged greenhouse schools where students had a competition of cutting down carbon dioxide in their schools. In china BP invested $500,000 in the University for School of economics and accountancy. This will help employees themselves if they decide to develop their careers and their children pursuing degrees in such university.

In UK, BP encouraged children in science program which have been developed years ago from lower level of education to university research. Having link with UK education Employees of BP provides workshop to the students regarding energy and business also giving them opportunity on work experience placement. In US and Canada helped students on energy and environment education program. In Angola assisted by providing grants to postgraduate degree in law on oil and gas whom such graduates, some of them are employed by BP Company. Also supported employees and local community in health aspects trying to tackle disease such as HIV, tuberculosis and malaria, and some of the areas in Angola where water was contaminated by oil and air emissions, noise pollution by assessing those areas.

ETHICAL CODE FOR OIL INDUSTRY

An ethical code is a rule or system which is adopted by the organisation showing the way they behave in the business environment and in the society; employees also need to follow these code of conduct. Ethical code for oil industry such as BP, Shell, Total etc is about making sure they abide to laws of health and safety meaning they should operate their activities in the a safe environment without causing any harm to natural resources and people surrounding them including employees. Employees right should be taken into consideration such as providing them medical assistance if they are injured at work place should be entitled to sick pays too. There should be an equal opportunity to both sex at work regardless of background difference or religion, race, nationality etc, employees confidentiality should be protected at all times.

Having an ethical partnership with other business, suppliers avoiding conflicts of interest. Company should not involve itself in any political and corruption issues or bribe, there should be a policy stating anything employees may receive from other business regarding company matters should fill up a form showing what kind of gift or money they have received and the amount in order to protect the company and employees. All activities taking place in the company should be transparent to the people (stakeholders) so that they could know how they operate their business also need to conduct a fair trade to developing countries.

CONCLUSION

BP has cause number of problems to the environment and people for example in the case oil spill in the Gulf of Mexico April 2010 were 11 people were killed, hundreds of animals have died and the cause for such disaster is not being known till now. BP has the responsibility of protecting the environment by having a proper mechanism put in place to prevent oil spill and proper equipment should be used and updated regularly. As being one of the world’s leading Oil Company earning more than 30 billion, they need to invest more in providing training to the staff on how to handle activities in the company in a safe way for protecting the environment and themselves. BP has new locations to operate their business in Canada, Africa and some parts of Africa, the question comes do they have any guarantee to the world that they won’t be operating unethically? The answer is complex as to end of the day accidents can happen any time but they need to prove to the world that they are willing to use all skills they have also adopting new ones to protect the environment from toxic emissions that could harm people.

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