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A Report On

MANAGEMENT IN THE WIDER ENVIRONMENT

HOW THE WIDER ENVIRONMENT IMPLICATION AND


EFFECTS WORKS ON BRITISH PETROLEUM (BP)

Submitted To:
Mr. C. Coker
Course Instructor
Advanced Professional Diploma in Management Studies
City of London College

Submitted By:
Md. Keiser Hossain (BEN)
Roll – 00205970
January 2009
Advanced Professional Diploma in Management Studies
City of London College
Date of Submission: 5th June 2009

Table of Contents

Focus Page
No
Introduction- History 03-04
of Petroleum

Task One 05-08


Organizational Profile of British Petroleum 05
The Mission Statement of British Petroleum 06
Philosophy of British Petroleum 06
Goals and Objectives of BP 06-07
Profile of the Stakeholders 07
Company’s Past and Current Strategy 08

Task Two 09-12


Internal and External Environment of BP 09-11
Working Environment of BP 12

Task Three 13-17


Regulatory Forces Affecting BP at National, 13-14
EU & Global Levels
Effects of Globalization 14-15
Corporate Social Responsibility 15-16
Environmental Responsibility and 17
Accountability

References 18

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INTRODUCTION- HISTORY OF PETROLEUM

Petroleum, in one form or another, is not a recent discovery. More than four
thousand years ago, according to Herodotus and confirmed by Diodorus Siculus,
asphalt was employed in the construction of the walls and towers of Babylon;
there were oil pits near Ardericca (near Babylon), and a pitch spring on Zacynthus.
Great quantities of it were found on the banks of the river Issus, one of the
tributaries of the Euphrates. Ancient Persian tablets indicate the medicinal and
lighting uses of petroleum in the upper levels of their society.

Oil was exploited in the Roman province of Dacia, now in Romania, where it was
called picula. The earliest known oil wells were drilled in China in 347 CE or
earlier. They had depths of up to about 800 feet (240 m) and were drilled using
bits attached to bamboo poles. The oil was burned to evaporate brine and produce
salt. By the 10th century, extensive bamboo pipelines connected oil wells with salt
springs. The ancient records of China and Japan are said to contain many allusions
to the use of natural gas for lighting and heating. Petroleum was known as
burning water in Japan in the 7th century. In his book Dream Pool Essays written
in 1088, the polymathic scientist and statesman Shen Kuo of the Song Dynasty
coined the word 石 油 (Shíyóu, literally "rock oil") for petroleum, which remains
the term used in contemporary Chinese.

The first streets of Baghdad were paved with tar, derived from petroleum that
became accessible from natural fields in the region. In the 9th century, oil fields
were exploited in the area around modern Baku, Azerbaijan, to produce naphtha.
These fields were described by the Arab geographer Abu al-Hasan 'Alī al-Mas'ūdī in
the 10th century, and by Marco Polo in the 13th century, who described the
output of those wells as hundreds of shiploads. Petroleum was distilled by the
Persian alchemist Muhammad ibn Zakarīya Rāzi (Rhazes) in the 9th century,
producing chemicals such as kerosene in the alembic (al-ambiq), and which was
mainly used for kerosene lamps. Arab and Persian chemists also distilled crude oil
in order to produce flammable products for military purposes. Through Islamic
Spain, distillation became available in Western Europe by the 12th century. It has
also been present in Romania since the 13th century, being recorded as păcură.

The earliest mention of petroleum in the Americas occurs in Sir Walter Raleigh's
account of the Trinidad Pitch Lake in 1595; whilst thirty-seven years later, the
account of a visit of a Franciscan, Joseph de la Roche d'Allion, to the oil springs of
New York was published in Sagard's Histoire du Canada. A Russian traveller, Peter
Kalm, in his work on America published in 1748 showed on a map the oil springs of
Pennsylvania.

In 1710 or 1711 (sources vary) the Russian-born Swiss physician and Greek teacher
Eyrini d’Eyrinis (also spelled as Eirini d'Eirinis) discovered asphaltum at Val-de-
Travers, (Neuchâtel). He established a bitumen mine de la Presta there in 1719
that operated until 1986.
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Oil sands were mined from 1745 in Merkwiller-Pechelbronn, Alsace under the
direction of Louis Pierre Ancillon de la Sablonnière, by special appointment of
Louis XV. The Pechelbronn oil field was active until 1970, and was the birth place
of companies like Antar and Schlumberger. The first modern refinery was built
there in 1857.

The modern history of petroleum began in 1846 with the discovery of the process
of refining kerosene from coal by Nova Scotian Abraham Pineo Gesner. Ignacy
Łukasiewicz improved Gesner's method to develop a means of refining kerosene
from the more readily available "rock oil" ("petr-oleum") seeps in 1852 and the
first rock oil mine was built in Bóbrka, near Krosno in Galicia(Poland/Ukraine) in
the following year. In 1854, Benjamin Silliman, a science professor at Yale
University in New Haven, was the first to fractionate petroleum by distillation.
These discoveries rapidly spread around the world, and Meerzoeff built the first
Russian refinery in the mature oil fields at Baku in 1861. At that time Baku
produced about 90% of the world's oil.

The first commercial oil well in Romania was drilled in 1857, and the world's first
oil refinery opened at Ploiesti, Romania being the first country in the world with a
crude oil output officially recorded in international statistics, namely 275 tonnes.

The first oil well in North America was in Oil Springs, Ontario, Canada in 1858,
dug by James Miller Williams. The US petroleum industry began with Edwin
Drake's drilling of a 69-foot (21 m) oil well in 1859, on Oil Creek near Titusville,
Pennsylvania, for the Seneca Oil Company (originally yielding 25 barrels per day
(4.0 m³/d), by the end of the year output was at the rate of 15 barrels per day
(2.4 m³/d)). See also the Pennsylvanian oil rush The industry grew through the
1800s, driven by the demand for kerosene and oil lamps. It became a major
national concern in the early part of the 20th century; the introduction of the
internal combustion engine provided a demand that has largely sustained the
industry to this day. Early "local" finds like those in Pennsylvania and Ontario were
quickly outpaced by demand, leading to "oil booms" in Texas, Oklahoma, and
California.

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TASK ONE

Organizational Profile of British Petroleum

BP is one of the world's largest energy companies, providing its customers with
fuel for transportation, energy for heat and light, retail services and
petrochemicals products for everyday items

Bp’s history is full of discoveries, starting in 1908 with oil found in a rugged part
of Persia after a long and difficult search. Since then, discoveries large and small
(and sometimes just in the nick of time) have fuelled our progress.

In the story, you may make a few discoveries of your own. Winston Churchill gives
a rousing speech. The Smurfs cause a traffic jam. Our employees help construct a
giant spool, build the world’s largest deepwater pipeline and bring solar power to
remote villages in the Philippines.

To find oil in Persia, George Reynolds and his caravan of explorers had lived
through seven years of harsh heat, gastric illnesses and disappointments. The next
seven years would be no less difficult for the Anglo-Persian Oil Company, which
would one day become BP.

The company was incorporated in 1909 in England and Wales and changed its name
to BP p.l.c. in 2001. BP is one of the world’s leading oil companies on the basis of
market capitalization and proved reserves. Our worldwide headquarters is located
at 1 St James’s Square, London SW1Y 4PD, UK

BP is a global group, with interests and activities held or operated through


subsidiaries, jointly controlled entities or associates established in, and subject to
the laws and regulations of, many different jurisdictions. These interests and
activities covered two business segments in 2008: Exploration and Production and
Refining and Marketing. With effect from 1 January 2008, the former Gas, Power
and Renewable segment ceased to report separately

A separate business, Alternative Energy, reported in other businesses and


corporate, handles BP’s low-carbon businesses and future growth options outside
oil and gas. Exploration and Production’s activities include oil and natural gas
exploration, development and production (upstream activities), together with
related pipeline, transportation and processing activities (midstream activities),
as well as the marketing and trading of natural gas (including LNG), power and
natural gas liquids (NGLs). The activities of Refining and Marketing include the
refining, manufacturing, supply and trading, marketing and transportation of
crude oil, petroleum and petrochemicals products and related services.

All these activities are supported by a number of other organizational elements


comprising group functions and regions. Group functions serve the business
segments, aiming to achieve coherence across the group, manage risks effectively
and achieve economies of scale. In addition, each regional head provides the

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required integration and co-ordination of group activities and represents BP to
external parties.
The Mission Statement of British Petroleum

In all activities of BP seek to display some unchanging, fundamental qualities –


integrity, honest dealing, treating everyone with respect and dignity, striving for
mutual advantage and contributing to human progress.

To translate these into guides for practical action, we build on them in our group
values. By bringing together intentions previously articulated in a number of
different policy statements, these make it clear that the group aims:

• To improve, and to be accessible, inclusive and diverse.


• To engage the creative talents of our employees, and develop and apply
leading, cost-effective technology and intellectual creativity to enhance
innovation and new ideas.
• To carry on its business in an environmentally responsible manner, and
develop cleaner energy and renewable energy sources. The group is
committed to the responsible treatment of the planet’s resources and to
the development of sources of lower-carbon energy.

For clarity, BP expresses the group values under four headings: performance;
people and capability; health, safety and environment; and external relationships.

Philosophy of British Petroleum

A study of BP annual reviews past and present suggests a shift is under way. This
is what BP's values used to be: "Green - demonstrating environmental leadership.
United around a vision of environmental leadership and recognition that the
challenge to develop cleaner energy must be met, we are committed to the
proactive and responsible treatment of our planet's natural resources and to the
development of sources of lower carbon energy."

This is what they are now: "Responsible. BP is committed to the safety and
development of our people and the communities and societies in which we
operate. BP aim for no accidents, no harm to people and no damage to the
environment."

In other words, no mention of green, environmental leadership and the


development of cleaner energy. Even the word "environment" is included almost as
a passing thought.

Goals and Objectives of


At the core of BP is an unshakeable commitment to human progress. Our products
and services are creating the freedom to move, to be warm, to be cool, to see and
enjoy a better quality of life. We believe this freedom is inseparable from the
responsibility to produce and consume our products in ways that respect both

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human rights and natural environments. Confronting this paradox is our mission,
but we cannot do it alone. Where others see contradiction and conflict, we see
opportunities for mutual progress.

It will be the magnet for people who want to change the world with new ideas,
delivering a performance standard that challenges the world's best companies.

And will enable customers, governments, communities and own people to


participate in a new constructive dialogue. We aim for a radical openness - a new
approach from a new company: transparent, questioning, flexible, restless and
inclusive.

The IDC and associated events aim to build awareness and understanding of safe
driving techniques and behaviours which all can adopt in their driving-related
activities. The event also provides an opportunity for drivers, other participants,
line leadership and functional specialists to better understand the challenges
being faced and good practices being employed by the driving workforce from
around BP, and to use the knowledge gained to share best practices and help
shape future driving safety needs.

To be a participant at the world finals or, at a regional event, is seen by drivers as


recognising and rewarding their driving safety skills and behaviours. Events are
typically held at well regarded venues and competitors' partners are invited to
attend. Time will be spent actively involved in competition and there is also time
to socialise, take in the local culture and to celebrate together with the winning
drivers. IDC events have become a valuable community relations showcase for BP.
For instance the media is present, national and local government officials have
been involved in past events and this will be continued into the future. BP
businesses also utilise the opportunity to invite customers along. And local staff
and their families are encouraged to attend during the competition.

Profile of the Stakeholders


BP has different stakeholders which is very important to the company. BP lists its
stakeholders as employees, customers, suppliers, community members,
environmental groups, activists, shareholders.

BP serves millions of customers every day, providing fuel for mobility, energy for
light and heat, and petrochemicals, BP have some 110,000 employees working in
more than 100 countries.

BP plays an important role in the life of local community members. Environmental


groups and activist are one the major threat to BP Company. Starbucks
shareholders play a very important role in the day to day functioning of the
company. They are represented by a group called “no accidents, no harm to
people, and no damage to the environment”. They are concerned about the
financial and legal implications of genetically engineered oil, not to mention the
company's reputation.

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Company’s Past and Current Strategy

BP remains focused on process safety and asset reliability. We have begun the
implementation of our Operating Management System, which covers everything
from employee competencies to risk assessment, and we’re already seeing the
benefits. BP is building capability with extensive training programmes such as the
Operations Academy developed in partnership with MIT.

BP started up nine major projects and made good progress on controlling costs.
We also delivered our 15th consecutive year of reported reserves replacement of
more than 100 per cent, and resource replacement of more than 200 per cent, a
performance that puts us among the best in the industry.

And BP have begun to reduce the complexity and cost base of BP – by the end of
2008, BP had reduced our corporate overhead by around 3000 people, and are on
track to exceed original target of 5000 by the middle of 2009. BP has also
eliminated nearly 20 per cent of the senior positions.

BP is intent on establishing a track record that is the very best in the industry.
2008 has also seen build operational momentum across the group. In E&P, BP
successfully grew production in line with guidance, the only one of the majors to
do so. Underlying production, excluding the effects of high oil prices on BP
entitlements under production-sharing contracts, was 5 per cent.

BP ‘s goal is to maintain this momentum in what will be a challenging


environment. And it’s that environment like to turn to next. BP is also seeing the
first signs of financial momentum. Significantly, 2008 results showed the greatest
increase among the peers.

All in all, BP made progress in 2008 and expect to see further financial benefits as
BP move into 2009. As we all know, in 2008 oil prices were extremely volatile.
They fell from a peak of $144 per barrel in early July to as low as $34 per barrel in
December. The average for the year was $97 per barrel. In the short term, prices
will be determined by a balance between OPEC cuts and the state of the global
economy and demand for oil.

On the demand side, global oil consumption is likely to decline for a second
consecutive year in 2009, probably by more than 1 million barrels per day – the
largest amount since 1982. BP therefore do not expect a quick recovery and it
would be wise to prepare for continued volatility, which may extend into 2010.

Despite today's pessimism, the future has not been cancelled – merely delayed.
Once economic growth recovers, BP expects oil demand and gas prices to recover
as well. Countries outside the OECD contributed more than half of total global
GDP growth in 2008 and will continue to do so in the future. As growth resumes,
they will need more energy, including oil, to continue their rapid
industrialization. In such a challenging environment, BP’s commitment to
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technology is more important than ever. Technology plays a critical role in
addressing the world’s energy challenges, from fundamental research through to
wide-scale deployment.
TASK TWO
Internal and External Environment of BP

BP operates in more than 90 countries worldwide. In each of these areas, BP has,


or is developing, processes designed to ensure compliance with applicable
regulations. In addition, each employee is required to comply with BP health,
safety and environmental policies as embedded in the BP code of conduct. Our
partners, suppliers and contractors are also encouraged to adopt them. This
Environment section focuses primarily on the US and the EU, where around 61% of
fixed assets are located, and on issues of a global nature such as operations and
the environment, climate change programmes and maritime oil spills regulations.

Internal Environment- BP as an individual group has following internal attributes


in terms of internal environment.

• Company Culture: The Company strives to be opening minded and flexible in


their work. A forward-thinking culture creates a well-managed and
contemporary organisation that is always seeking to improve.
• Company image: As a world renowned company BP has good image as the
name. Any top people would like to join the company as of the image and due
to that company in a situation where they can recruit the best people.
• Organisational structure: The company structure from the CEO (Chief
Executive Officer) to the bottom level has been formulated with talented and
experienced people from all over the world.
• Key staff: Top, talented, experienced people have been recruited from all
over the world in order to make sure that the business stability and ongoing
training programmes are in progress.
• Access to natural resources: As the nature of the business such as air and sea
operations are utilising the natural resources at its best.
• Position on the experience curve: Being number one in the industry as well as
being in the field over 100 years sense that the company is in the top level in
the experience curve.
• Operational efficiency: BP believes that efficiency gives confidence that BP
will continue to deliver profitable growth hence it runs its maximum efficiency
with its new technologies.
• Brand awareness: BP considers that the most valuable asset of the company is
brand. It helps open doors, it attracts talented people, it differentiates us and
it is a reassurance of trust in our technical capability.
• Market share: Being number one confirms that the company has the biggest
portion in the share pie.
• Financial resources: The world largest organisations and the financial
organisations have merged with the company and the company has issued
shares to access the world’s largest financial resources.
• Exclusive contracts: In order to make sure that the supply chain is managed
properly some contracts has been signed where the supplier only supply for the
company.
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• Patents and trade secrets: The Company holds number of patents for the
inventions that they have done which only the company gets authority to
supply for the market.

External Environment-

• Micro Environment

• Customers: Meeting the needs, wants and providing the benefits to customers
will result of surviving an organisation. And in the event of failure of do so will
be end up with failed business strategy. BP apply their expertise in technical
innovation to their products and services for the benefit of the customers, in
order to bring them new market opportunities, good value and high quality
products which are reliable and safe. Also they emphasise that they
communicate honestly and openly with the customers, seeking a full
understanding of their requirements and meeting company commitments to
them. We respect the confidentiality of information from our customers to
which we have access. As the organisations like Rolls Royce have loyal top class
customers it is an asset for the company and a threat if they seek for some
other supplier or brand as they spend lot of money for the brand name.
• Employees: Over some 110,000 employees working in more than 100 countries.
To make sure the every employee has thorough knowledge on the products and
the procedures, overall trainings will be given based on given time lines as well
as based on the job role. The company demonstrate its capability by enhancing
the recruitment of excellence, talented and experienced people.
• Competitors: As the company operates in different sectors such as aero, naval
and civil, there are competitors for every sector. Also being number one itself
enclosed business to the competitor’s targets.
• Media: As a renowned organisation advertising is the most important activity
in most of the time to attract the new customers as well as to retain the
existing customers. Audio and video advertising across the country is taking
place to promote the special inventions and the products or services.
• Shareholders: A large scale of share holders across the world investing on the
business as the company has the best recognition among the world. Also the
joint ventures with Marks n Spencer and other main organisations help
recognition of the company and the stability of organisation.
• Suppliers: World renowned fair-trade suppliers are the leaders in supplying
products for the organisation. To make sure that the supply is maintained on
the demand the company always choose reliable and capable suppliers from all
over the world. The contracts and the bonds have been created to fulfil the
requirement of the stores constantly with suppliers.

• Macro Environment

• Political: These refer to the changes and involve of the government on making
decisions which affects the organisation. Political behaviour can affect the
organisations growth in many aspects. On the other hand trade agreement,
tariffs and restrictions can be the barriers. Also the tax levies, tax breaks and
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market regulations can be directly affected to the growth of the business. As
the nature of the business operation needs to work with countries all over the
world, the political stability should be assessed.

• Economic: All businesses are affected by local and global economic factors.
National and global interest rate and financial policy will be set around
economic circumstances. The atmosphere of the economy dictates how
customers, suppliers and other organisational stakeholders such as suppliers
and creditors behave within society. Especially in a situation where the world
economy falls and in a recession, the organisation cannot expand the business
as there is not much demand, even if the company capable for. Also the type
of economic system in each country operates in affects the organisation. Due
to these circumstances the organisation operates as individual units in each
country.
• Social: Organisation should be able to align their product or service to
harmonize and benefit people’s lifestyle and behaviour. If the organisation
fails to do so the market share and the demand for their product or service
will be lose. The organisation has limitations in producing some products as
globally it has restrictions such as for military air craft’s or equipments. So the
company has to manage the efficiency by increasing the productivity even if
the company has the capacity of production.
• Technological: Technological advances have deeply changed the manner in
which businesses operate. Technology such as Internet, Intranet and telephone
which exchange the information faster make the organisations more efficient.
Also the ERP systems (Enterprise Resources Planning) supporting the business
to record and distribute the information as and when required in easy aspects
comparing to the old methods. Also the computers and the devices which help
the organisations operations and day to day business smooth have been
installed. As the nature of the business involves with the technology, the
company should use latest techniques in order to lead the market. And the
company has to do the experiments and inventions in terms of the technology
to survive in the market.
• Environmental: The organisation is responsible for the low emission as much
as they grow in technology. As an initiative for that the company has invested
£95 million on Environmentally Friendly Engine (EFE) programme which was
started in 2006. The programme will make a major contribution towards
achieving the industry targets of 50 per cent lower CO2 emissions, 80 per cent
lower NOx (Nitrogen Oxide) emissions and 50 per cent less noise by 2020, all
from a 2000 baseline. The company’s leading in the industry should invent
environmental friendly technologies, and failure to do so will result in
terminates the operations by the governments.
• Legal: As the business operates in over the world, the company has to manage
their operations according to the legal circumstances of the particular
government. Some government restrictions on products, laws on the
employees, laws in currency exchanges and legally allowed operation patterns
have to be considered. The company’s legal teams cover all areas of the
business and take the initiative in providing advice and assistance to our
businesses so that they can meet their commercial objectives and legal

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obligations. To ensure that they deliver high quality legal services that provide
the best value to organisation, they work hard to gain a thorough
understanding of all aspects of Rolls Royce Company. This enables them to
influence key commercial decisions.

Working Environment of BP

BP’s approach to managing people and developing their skills is consistent with
the principles of our brand. The rights and dignity of all employees. Everyone who
works for BP contributes to our success and to creating a distinctive company.
Working together, drawing from our diverse talents and perspectives, will
stimulate new and creative opportunities for our business. Collectively generate a
more exciting and rewarding environment for work in which every individual feels
responsible for the performance and reputation of our company.

BP’s duty of care in practice-


• make the workplace safe
• prevent risks to health
• ensure that plant and machinery is safe to use, and that safe working
practices are set up and followed
• make sure that all materials are handled, stored and used safely
• provide adequate first aid facilities
• tell about any potential hazards from the work you do, chemicals and other
substances used by the firm, and give you information, instructions, training
and supervision as needed
• set up emergency plans
• make sure that ventilation, temperature, lighting, and toilet, washing and
rest facilities all meet health, safety and welfare requirements
• check that the right work equipment is provided and is properly used and
regularly maintained
• take precautions against the risks caused by flammable or explosive hazards,
electrical equipment, noise and radiation
• avoid potentially dangerous work involving manual handling (and if it can't be
avoided, take precautions to reduce the risk of injury)
• report certain accidents, injuries, diseases and dangerous occurrences to
either the Health and Safety Executive (HSE) or the local authority,
depending on the type of business

BP’s workplace is safe and healthy- BP’s work premises provide a safe and
healthy place to work:
• workplaces are properly ventilated, with clean and fresh air
• temperatures at a comfortable level (a minimum of 13 degrees C where the
work involves physical activity; 16 degrees C for 'sedentary' workplaces (eg
offices) - there's no maximum limit)
• the workplace and equipment clean
• workrooms are big enough to allow easy movement
• the workplace and equipment in good working order
• floors, walkways, stairs, roadways etc safe to use

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• fit openable windows, doors and gates with safety devices if needed
• provide suitable washing facilities and clean drinking water
• set aside areas for rest breaks and to eat meals, including suitable facilities
for pregnant women and nursing mothers
• make sure that employees who work alone, or off-site, can do so safely and
healthily
TASK THREE

Regulatory Forces Affecting BP at National, EU & Global Levels

Regulatory forces are the various government regulatory agencies that impact how
an organization operates on a daily basis. Some of the general regulatory forces
that affect the common business and as well as British Petroleum in UK, EU and
internationally are as follows:

National Level
• Health and Safety Executive (HSE)- According to the official web site the
HSE’s mission is “to prevent death, injury and ill health in Great Britain’s
workplaces." They do this through research, information and advice,
promoting training, new or revised regulations and codes of practice,
inspection, investigation and enforcement.
EU Level
• European Commission- European commission is the executive branch of
the European Union. The body is responsible for proposing legislation,
implementing decisions, upholding the Union's treaties and the general day-
to-day running of the Union.

Global Level

Globalization in its literal sense is the process of transformation of local or


regional phenomena into global ones. It can be described as a process by which the
people of the world are unified into a single society and function together.

• Federal Trade Commission (FTC) - FTC was created in 1914 in United


States of America. It is the only federal agency with both consumer
protection and competition jurisdiction in broad sectors of the economy.
The FTC pursues vigorous and effective law enforcement; advances
consumers’ interests by sharing its expertise with federal and state
legislatures and U.S. and international government agencies; develops
policy and research tools through hearings, workshops, and conferences;
and creates practical and plain-language educational programs for
consumers and businesses in a global marketplace with constantly changing
technologies.

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• Federal Communications Commission (FCC)- The FCC is an independent
United States government agency. The FCC was established by the
Communications Act of 1934 and is charged with regulating interstate and
international communications by radio, television, wire, satellite and
cable. The FCC's jurisdiction covers the 50 states, the District of Columbia,
and U.S. possessions.

• ISO (International organisation for Standardization) - ISO is the


main confederation for standardization, with its headquarters in
Geneva Switzerland. It is the hallmark for Audited Quality Management
Control Systems throughout Trade and Industry affecting all areas of
business and qualified by ISO Certification and Registration.

• UNFCC (United Nations frameworks for climate change) - It is an


organisation that consider what can be done to reduce global warming and
to cope with whatever temperature increases are inevitable. More recently,
a number of nations approved an addition to the treaty: the Kyoto Protocol,
which has more powerful (and legally binding) measures. The UNFCCC
secretariat supports all institutions involved in the climate change process,
particularly the COP, the subsidiary bodies and their Bureau.

• KYOTO PROTOCOL- The Kyoto Protocol is an international agreement


linked to the United Nations Framework Convention on Climate Change. The
major feature of the Kyoto Protocol is that it sets binding targets for 37
industrialized countries and the European community for reducing
greenhouse gas (GHG) emissions .These amount to an average of five per
cent against 1990 levels over the five-year period 2008-2012.

• E4environment- E4environment Ltd is a registered landscape practice and


environmental consultancy, It was founded in January 2000 by the two
founding Directors Kay Hawkins and Mandy Stoker who between them have
more than 34 years experience in environmental consultancy. The company
now has three Directors and a team of environmental consultants,
researchers, graphic technicians and an office manager.

Effects of Globalization

It is a pleasure, and an honour to have been invited to share a few thoughts with
today. The reflection on the morality of global economy, or globalisation, is
formed looking through three lenses. The first, is the unique lens that brought me
here, namely the corporate lens which comes with being a senior advisor for one
of the worlds largest industrial companies, BP. BP is a company that lives
globalisation. We recognize that we are uniquely positioned to contribute to
shaping human development in many diverse parts of the world. Few other

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entities offer as much opportunity to put reality behind the words "force for
good."

Globalization has various aspects which affect the world in several different ways
such as:

• Industrial - emergence of worldwide production markets and


broader access to a range of foreign products for consumers and companies.
• Financial - emergence of worldwide financial markets and
better access to external movement of material and goods between and
within national boundaries.
• Economic - realization of a global common market, based on
the freedom of exchange of goods and capital. The interconnectedness of
these markets, however meant that an economic collapse in any one given
country could not be contained.
• Political - some use "globalization" to mean the creation of a
world government which regulates the relationships among governments and
guarantees the rights arising from social and economic globalization.
Politically, the United States has enjoyed a position of power among the
world powers; in part because of its strong and wealthy economy. With the
influence of globalization and with the help of The United States’ own
economy, the People's Republic of China has experienced some tremendous
growth witfhin the past decade. If China continues to grow at the rate
projected by the trends, then it is very likely that in the next twenty years,
there will be a major reallocation of power among the world leaders. China
will have enough wealth, industry, and technology to rival the United States
for the position of leading world power.
• Informational - increase in information flows between
geographically remote locations. Arguably this is a technological change with
the advent of fibre optic communications, satellites, and increased
availability of telephone and Internet.
• Language - the most popular language is English
o About 35% of the world's mail, telexes, and cables are in English.
o Approximately 40% of the world's radio programs are in English.
o About 50% of all Internet traffic uses English.
• Technical
o Development of a global telecommunications infrastructure and
greater transborder data flow, using such technologies as the
Internet, communication satellites, submarine fiber optic cable, and
wireless telephones
o Increase in the number of standards applied globally; e.g. copyright
laws, patents and world trade agreements.
• Legal/Ethical
o The creation of the international criminal court and international
justice movements.
o Crime importation and raising awareness of global crime-fighting
efforts and cooperation.
o The emergence of Global administrative law.

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Corporate Social Responsibility

Corporate Social Responsibility (CSR) policy section focuses on CSR in Europe and
in particular the development of the EU's CSR strategy. Corporate social
responsibility describes a company's commitment to be accountable to its
stakeholders - i.e. those influenced by its decisions and actions, either locally or
internationally - in its operations and activities. The EU's approach to this issue
takes as its starting point the triple bottom line method that combines economic,
social and environmental performance.

BP is one of the largest companies in the world - with a turnover dwarfing that of
some nation states. As an oil company, it is directly linked with the use of fossil
fuels linked with major environmental challenges on a global scale. No company
has achieved a higher profile in its stated determination to completely re-
orientate the business to adapt to the needs of a more sustainable society. With
its major - and controversial - rebranding and commitment to becoming a
sustainable energy company rather than simply an oil company - it has inspired
and impressed some, and irritated others.

During his time in charge, Lord John Browne established himself as one of the
most thoughtful business leaders taking a lead in corporate social responsibility.
This was, however, a position that became tarnished at the end when a series of
major accidents hit the company as a result of safety and maintenance failures.

There are very few aspects of how a company behaves as a corporate citizen that
do not apply to a company of the size and nature of BP. The most significant of
these are the sheer environmental impact - not simply of the extraction of oil and
the energy use of BP's own operation, but more significantly of the impact on
climate change of the actual use of all the oil by BP's customers. The state of
current scientific evidence raises serious question marks over whether or not
human society can actually afford to burn all the hydrocarbons whose existence
we have already identified - never mind potential future discoveries. Twenty
years ago, people worried that one day the oil would run out. Now, it is the case
that the real issue has been identified as one of emissions.

A company with such extensive operations in developing countries also needs to


carefully manage its approach to human rights, and ethical business practices. BP
will have significant impact on local communities - both as a huge employer and
through the nature of its on-the-ground operations. It should expect to seriously
seek to reduce negative impacts here, and to invest seriously in those
communities.

BP as a global player, is immensely powerful. It has no democratic legitimacy, but


often is better able to lead on the social development of the planet than national
governments. This is a dilemma it needs to handle carefully.

In his final introduction to a BP social responsibility report, "The past two years
have been difficult for BP. In March 2005, at the Texas City refinery, BP suffered
a tragedy in which 15 people died and many more were seriously injured. BP have

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also experienced operational difficulties in Alaska and the potentially
destabilizing effects of intense and at times unbalanced media scrutiny and
criticism.

BP’s sixteenth annual report on non-financial performance, are remarkable and a


great testimony to the BP team across the world:

• an improvement in personal safety, with reported recordable


injury frequency the lowest in our recorded history
• ongoing improvements in our environmental impact across a
series of measures
• an improvement in the development of people, including an
increase in the number of women in leadership since 2000
• and, of course, a strong financial performance allowing us to
invest for the future and to reward those who trust us with their savings

Environmental Responsibility and Accountability

BP’s target to reduce group-wide greenhouse gas emissions by 10% from a 1990
baseline over the period to 2010. The reductions will be measured and verified by
external observers.

BP’s pilot internal system for emissions trading allows individual business units to
find the lowest-cost way of meeting the group’s overall target. At this stage 12
business units are involved. Over the next 18 months we will expand that system
to include all the activities of BP Amoco. Our trading system was developed in
partnership with the Environmental Defense Fund (EDF), a US-based
environmental non-governmental organization.

Continuation of our constructive role in developing policy and research on climate


change through our support of a range of programmes including the Massachusetts
Institute of Technology Joint Programme on the Science and Policy of Global
Change and the IEA Greenhouse Gas programme.

Collaboration with other business organizations and the World Resources Institute
to publish a report entitled Safe Climate, Sound Business, developing a cross-
sectoral approach to climate change.

During 2008, BP continued to environmental management systems to seek


improvements on a wide range of environmental issues. Except at two locations,
the operations at our major operating sites are covered.

Issues- Though the company is contributing to the environmentally friendly


operation, relatively the company has restrictions and limitations due to the
nature of the business. In that case some profitable projects have to be ceased
and manufacturing products has to be limited.

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References

Books:
Beck, U. (1999) what is Globalization, Cambridge: Polity Press.

Chossudovsky, M. (1997) The Globalization of Poverty. Impacts of the IMF and World Bank
reforms, London: Zed Books.

Foreign Policy (2002) 'Globalization's last hurrah?', Foreign Policy, January/February,


http://66.113.195.237/issue_janfeb_2002/global_index.html

Fox, J. (2001) Chomsky and Globalization, London: Icon Books.

International Monetary Fund (2000) Globalization: threat or opportunity, International


Monetary Fund, corrected January 2002

Kuehn, L (1999) 'Responding to Globalization of Education in the Americas -- Strategies to


Support Public Education', Civil Society Network for Public Education in the Americas -
CSNPEA, http://www.vcn.bc.ca/idea/kuehn.htm

Manly, Bryan F.J. 2001. Statistics for Environmental Science and Management. Boca
Raton, FL: Chapman & Hall.

Nick Hanley by Introduction to Environmental Economics.

Ortolano, Leonard. 1984. Environmental Planning and Decision Making. New York: Wiley.

Soesilo, J. Andy and William D. Wiley. Multimedia Environmental Management.

World Bank (1999) World Development Report 1998/99: Knowledge for Development-
World Bank. [1999, 9 August]. http://www.worldbank.org/wdr/wdr98/contents.htm.

World Bank Research (2002) 'Globalization, Growth and Poverty: Building an Inclusive
World Economy', The World Bank Group

Journals:

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• Environmental Management Processes and Practices for Australia By Ian Thomas
• Environmental Science for Environmental Management, by Timothy O'Riordan
• Human Resource Management, Ivancevich, 7th edition.
• Law & Practice Relating to Disciplinary Actions, S. A. Huq.

Website:

• URL: www.amosweb.com/cgi bin/ gls&c=dsp&k=regulatory+forces)


• URL: www.bp.co.uk
• URL: www.ec.europa.eu/index_en.htm
• URL: www.fcc.gov/aboutus.html
• URL: www.ftc.gov
• URL: www.google.com
• URL: www.hse.gov.uk
• URL: www.infed.org/biblio/globalization.htm.
• URL: www.isoqsltd.com/index.html

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