BPs

Lack of Ethics

Ruben de la Rosa II
ORGL 3322 Ethics and Leadership I
BPs Lack of Ethics
August 25, 2016
Dr. Rebecca Silva

The Deep Water Horizon Disaster of 2010 is the largest marine oil spill in history
and had some catastrophic effects in many ways. The explosion and subsequent oil spill
was a result of lack of moral decisions made by BP management in order to save cost
where it was greatest, even though the consequences were greater. The lack ethics and
moral judgment has resulted in the environmental disaster, loss of employment, years of
litigation, and unfortunately loss of life. I will examine these aspects in further detail in
the following paragraphs.
This disaster appears to have had warning signs even before the rig was built. BP
has been making questionable decisions for years. In 2005, the initial example of
unethical decision disaster presented itself. A BP Texas refinery had an explosion that
caused the death of 15 people and injury to 180 others. The cause of this disaster appears
to have been a result of deciding to cut back on maintenance costs and safety measures in
order to reduce costs. In 2006, a second disaster occurred in Alaska. 200,000 gallons of
oil poured in to the bay, which resulted in the largest oil spill in Alaska to date. This
occurrence happened even though Alaska State Regulators had warned BP about the
dangerously thinning pipelines that required maintenance. By this point, a trend can be
seen in how BP management utilizes ethics and morals when making company decisions
that affect others. The Deep Water Horizon disaster was no different in terms of blatant
disregard for the well being of others. In 2010, an explosion occurred off the coast of
Louisiana on an oilrig that BP was leasing from Transocean. This resulted in the death of
11 people, 17 injuries, and an ongoing environmental tragedy. Aside from those directly
affected by the explosion itself, the oil spill caused the death of many animals, ruined
ecosystems, caused health issues with those animals who did survive, shut down beaches

and other areas whose source of income depends on tourists, and caused unemployment
for thousands of people. In order to save millions of dollars, BP will now have to pay
billions in fines on top of the billions they have already set aside to aid in the cleanup
effort. They cost the lives of many people and animals, as well as possibly ruining the
lives of those who could not work as a result of the disaster. Greed is the only thing that
could have driven these decisions, as ethics has played no part. BP had plenty of warning
in order to make an ethical and moral decision that could have avoided these
catastrophes. In a letter to Mr. Hayward, CEO of BP, several of these warnings were
pointed out. Starting with the well design. It was pointed out that they had options as to
whether they use a casing or a liner. The liner was more expensive but was the safer
option, however it cost $7-10 million more and would take longer to achieve. BP was
already behind on a tight schedule and did not want to delay any further. They also did
not want to spend anymore than they had to. When installing the casing, which was the
cheaper route and less safe route, they needed to utilize centralizers, which ensure that the
casing is properly centered. This is crucial to ensure that gas flow problems do not occur
or are minimized. Halliburton, who BP contracted to pour the cement, suggested that they
use 21 spacers to achieve the proper spacing. The BP official in charge of this decided to
install only 6 spacers due to the fact that it would take 10 extra hours for the rest.
Halliburton advised again that they go with 21 spacers, but were shot down. After the
cement had been poured, another official saw there was a risk with how it was done but
ignored it stating that it was already done, and they would probably be fine. It was also
suggested they conduct a cement bond log which would test the seals. They however sent
the conducting company back stating that their services were not needed. A mud

circulation is also required to allow the natural gases to be expelled to allow the workers
to test for gas leaks. This was partially done because a full job would have taken 12
hours. Since they opted for the casing method, a lockdown sleeve was required to prevent
seal issues. However BP decided not to deploy a sleeve. This is the last of the 5 major
issues that have been called to attention. After reviewing these, some of the cost and time
could have been avoided by just utilizing the safer yet more expensive option of a liner.
Instead, in a effort to save time and ultimately money, a series of poor decisions were
made that harmed the company, its employees, and worst of all, other innocent people
and animals.
In a business that is as dangerous as this, I would assume that it is crucial to
utilize altruism. Many people depend on their leaders to make safe decision to protect
them and ensure no harm will be done. I am sure that the employees were making
extremely fair wages, however I cant imagine had they been aware these decisions were
being made knowing they posed life threatening risks, that they would have taken the
money over their well being. It is clear; that BP management did not effectively weigh
out the consequences that would ensue should something like this happen. They have
adversely affected their company, the community, the environment, and the people
involved both employees and others. It is hard to believe that all management went along
with what was being done. Someone must have had feelings that what was going on was
wrong and could do harm. They should have spoken up. It is hard to be a whistle blower,
but had it saved the lives of those lost, they would be known as a hero.
The verdict handed down by U.S. District Judge Carl Barbier, was that BP was
found to be grossly negligent in its decisions that lead to the Deep Water Horizon in

2010. The fines to be paid by BP could total as much as $18 billion. BP was found to be
67% at fault for the disaster. Transocean, who was found to be 30% at fault, was ordered
to pay $1 billion in fines. Halliburton was found to be only 3% at fault. The judge made
his decision based on one of the most detailed re-creations to date. He found that BP
workers were not interpreting test results accurately and even has a BP managers
account where he felt the results were squirrely. Based on the accounts and the
recreations, he decided that the decisions made were profit driven decisions. It is clear
to me that this judge has ethics and is truly looking out for those affected by the disaster.
BP must be brought to justice and pay for the harm they have caused. Also, the
contracted companies were also justly accountable for their role in this. They did provide
recommendations on how things should be done, however were overruled by BP. In that
instance, BP was the customer. I do feel that Halliburton should have reported this to
officials. Had inspectors or government officials looked in to this, the rig could have been
shut down and lives could have been saved.
Thus far, it is clear that BP management has had a complete lack of ethics when
making decisions. It also seems as though this is something that is somewhat of a culture
at BP. I have not seen yet where any leader at BP has stepped up and done what is right
or ethical of them. All have just decided to look the other way or ignore things for the
sake of cutting cost and increasing profits. Even after the disaster, executives have shown
no morals or sensitivity. Take for example Tony Hayward, the face of BP during this
ordeal. He state that I just want my life back in an interview. This shows a lack of
sensitivity for those who were lost during the explosion, the ecosystems ruined, people
who depend on the beaches and tourism for income, and all the animals lost. I am sure

they would like their lives back as well and did not do anything to deserve this nor did
they profit from any of the decisions made. Even with the rulings and fines paid, many of
their lives could be ruined. Also, no amount of money will bring back those who lost
their lives.
In my opinion, this tragedy could have been avoided. Greed is an anti-moral in
my opinion. If you can be consumed by greed, ethics and morals will play no part in the
decisions you make. This appears to be what has happened here. BP seems to have a
culture where all they care about is maximizing profits at any cost. What they fail to see
is that people do not want to work for a company that does not employ ethics in
decisions. I am sure they are losing a great deal of quality employees due to this disaster.
Also, as we have seen, cutting costs could in the long run cost you more than you saved
or profited. They cut corners and saved millions, possibly a few billion. However this
disaster is going to cost them billions and they are still not done reviewing. I do feel the
judge was just and fair with his decision. He took many witness accounts and re-created
the issues. Reviewed the information and considered those affected in how he came up
with his verdict. The only thing that could have changed in this was BP managements
user of ethics in their decision-making. That would have cause a chain of events that
would have not resulted in this disaster. Without that change, I feel the way things played
out was inevitable.

References
Ingersoll, C (2012 April 3). BP and the Deepwater Horizon Disaster of 2010. Retrieved
from https://mitsloan.mit.edu/LearningEdge/operations-management/BP-DeepwaterHorizon-Disaster/Pages/BP-and-the-Deepwater-Horizon-Disaster-of-2010.aspx

Gilbert, D (2014 September 4). BP Is Found Grossly Negligent in Deepwater Horizon

Disaster. Retrieved from http://www.wsj.com/articles/u-s-judge-finds-bp-grosslynegligent-in-2010-deepwater-horizon-disaster-1409842182

Pallardy, R (2016, May 9). Deepwater Horizon oil spill of 2010. Retrieved from
https://www.britannica.com/event/Deepwater-Horizon-oil-spill-of-2010

Johnson, C (2016). Organizational Ethics A Practical Approach. Thousand Oaks

CA: Sage