Making Restitution for the Deepwater Horizon Disaster

Case Study Analysis: Deepwater Horizon

Introduction

The Deepwater Horizon oil spill was the worst in US history, and yet it could have been prevented if agents involved had taken the proper care and precaution at some cost to themselves. This paper highlights the main characters and identifies the ethical issues. It then determines the main options available to the agents, discusses the most ethical option and provides a plan for implementation. Finally, it defends the decision and the moral principles it appeals to by applying the virtue ethics framework.

Main Characters

The main characters in the Deepwater Horizon oil spill were BP; Transocean, the oil rig operator contracted by BP to operate Deepwater Horizon; Haliburton, which mixed the cement meant to seal the drill; the workers tasked with cleanup; the EPA, which oversees rules for cleanup; and analysts, whose task it was to observe and identify problems. The main actor was BP, as it downplayed risk posed by “kicks” when natural gas is unleashed from drilling; the rig operators also demonstrated a lack of care and diligence in operating the rig; Halliburton failed to mix the cement for the seal properly, which contributed to the explosion; and in the clean-up process, BP injected hundreds of thousands of gallons of Corexit into the oil to help break it up but which also contributed to the sickness of hundreds of crew workers (Claasen & McNamara, n.d.).

Ethical Issues

The most significant ethical issues in the case were, in the first place, the downplaying of risk. BP should not have downplayed the risk of kicks, as this is the problem that led to the explosion. Other factors entered in, but by setting the bar for accountability low, BP engineered its own catastrophe. Risk is something that should never be taken lightly or downplayed just because addressing it poses a potential headache. It is important to be transparent and honest about risk factors and to address them upfront; downplaying them does not mitigate risk—it heightens it.

The next major ethical issue was the lack of Transocean’s diligence and care; it was responsible for operating the rig, and yet it did little to attend properly to the situation, and the same goes for Halliburton. Claasen and McNamara (n.d.) explain that all three “ignored forewarnings that imminent danger was looming.” Then to deflect blame, BP tried to argue that Transocean was responsible for the disaster. However, it was BP that downplayed the kicks because the crew was behind schedule and BP was losing money. BP was clearly negligent in the situation. Its attempt to clean up the ocean was also negligent, for instead of cleaning up the spill it simply added hundreds of gallons of the toxic Corexit dissolvent into the sea and made a bad situation even worse for both humans and marine life. Even though Corexit was approved by the US EPA at the time of its use, it had been banned in Europe and BP ought to have considered this fact more substantially, foreseeing the harmful effects that would likely be called to its attention after its usage.

BP had a duty to stakeholders to attend to risk appropriately and it failed to do so prior to the explosion as well as after the explosion, when first it sought to deflect blame and then when it used a toxic clean-up substance to prevent oil from spreading in the ocean. It failed in its duty to stakeholders out of concern for costs and out of concern, secondly, to its reputation. By putting these factors first, it placed its own immediate good ahead of the reasonable good of stakeholders, and thus acted without virtue. It demonstrated little care or regard for its neighbors and employees, thinking only about the costs of conducting operations rightly and the costs of reputational harm for accepting responsibility.

Main Options Available

The main options available to BP are 1) to continue to try to deflect blame and responsibility for the disaster, the clean-up, and restoration of the environment; 2) to accept responsibility for the disaster and commit to restoration regardless of the cost so as to show stakeholders that the company cares and wants to right the wrong; and to commit to better oversight of drilling operations in the future.

Most Ethical Option

The most ethical option is the second one: to take responsibility, restore the environment, and commit to better oversight in the future. This means that it should pay restitution to those in the community whose livelihoods have been hurt by the environmental disaster; it means paying for clean-up and providing compensation to those whose health has been hurt by the clean-up efforts; it means paying restitution to the families of the victims of the explosion; and it means providing more transparency about how it will ensure safety on other drilling sites.

Virtue ethics posits that the morality of actions is determined by the extent to which it develops a person’s character or moves it toward the good. In other words, it is virtuous and good to show care and concern to one’s neighbors; it is virtuous and good to accept responsibility for that which is under one’s responsibility; it is virtuous and good to make restitution when one is to blame for injuries done to another. The fact is that BP is to blame for the disaster: it downplayed risk, encouraged risk taking by Transocean by hurrying the crew along and ignoring warnings about kicks; it went ahead with a clean-up solution that was banned in the EU although it was not banned in the US at the time; it harmed the livelihoods of people in the community of the Gulf due to the amounts of oil leaked into the ocean by the spill. It therefore stands to reason that in order for BP to build back up its good character it has to take the right and moral steps to do so. Shirking its responsibility to stakeholders and denying wrongdoing is not an example of building back up its character. Holding itself accountable, and taking steps to make the situation right would be an example of good character on the part of the company.

Plan to Implement the Option

BP can continue to set aside a restitution fund for those whose livelihoods have been hurt by the disaster. While this might eat into its bottom line and hurt shareholders temporarily it would improve its relations with stakeholders, and that is what is most important at this point. The restitution fund would be used to provide compensation to families hurt by the accident.

The next step to take in this plan would be to develop a transparent oversight committee that would improve safety conditions on all drilling sites. Safety rules and regulations should be put in place that prevent crews from working haphazardly when warning signs emerge; work should be shut down in the face of such signs until the proper precautions are put in place. Equipment should be tested routinely to make sure it does not fail at pivotal moments (as happened in Deepwater). These tests should be conducted by third parties to prevent conflicts of interest.

Defense

This decision appeals to the moral principles of virtue ethics because it helps to build up the good character of BP and permits to own up to its own negligence in a way that would win favor with the community. Even though it would come at cost to the company and to shareholders, the cost would be temporary as compared to the long-term loss of good will from stakeholders who would view BP with suspicion and animosity for the foreseeable future. BP’s character would continue to suffer from the reputational damage and it would not be seen as a trustworthy organization. Protests against future drilling in communities could be organized to the detriment of the firm. Virtue ethics is not just about doing what is right toward others but is also the ethical framework that shows that by doing the right moral action at the right time one is able to do what is best for himself as well. That is what BP needs to do now: by providing restitution here and cleaning up the environment properly it does what is right toward the community and what will be seen as right for itself in the long-run.