Corporate Flaws That Contributed to the Gulf of Mexico Spill Chapter

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corporate and public shortcomings that arguably resulted in the BP oil spill in the Gulf of Mexico. The oil spill marked the U.S.'s worst environmental disaster. Whilst identifying the corporate and state cover-ups the triggered the disaster, this study recommends some of the solutions that can be adopted to prevent future disasters. BP's corporate flaws are largely to blame for the disaster.

The 20th of April of 2010 marked the largest oil spill disaster in the U.S. referred to as the Deepwater Horizon oil spill (Lehner & Deans 2010). On this day, a fire explosion resulted in the sinking of the Deepwater Horizon oil rig. The catastrophe led to the deaths of 11 workers. BP owned the oil well while Halliburton did the cementing of the well. Transocean Company was the owner of the rig. The three companies engaged in blame games while efforts to deter the oil spill lasted for several months. Oil spillage was estimated to drop between 35,000 to 60,000 barrels of oil a day. The spilled oil gushed its way into the Gulf of Mexico (King 2010).

As a result, the U.S. government established review measures on the safety of deep-water oil drilling. However, U.S. President Barrack Obama initiated continuous efforts in offshore oil drilling by the public. It is estimated that the oil spill resulted in the spillage of about 210 million gallons of oil into the Gulf. The 86 days of the spillage were also characterized by a gas leakage of about 500,000 tons of gas. The gas leakage and oil spillage endangered the livelihoods of the local population. This catastrophe also damaged several hundreds of delicate coastlines. The leaking well was sealed on 19 September of 2010 although the effects were already devastating. Critics have blamed BP for the disaster based on the company's culture of outsourcing critical responsibilities in efforts of cost reductions. The problems faced by the Gulf also point to previous occurrences in Texas City and Alaska, just to mention a number.

President Obama announced the government's initiative of holding BP accountable of the spillage. He also associated the disaster with the September 11 attack that claimed lives and threatened the nation's domestic policy. Estimates indicated that BP could part away with between $80 billion and $100 billion in damages, penalties, and costs of the clean up exercise. At first, the prices hit $40billion (Bradshaw, 2014).

Corporate and public shortfalls resulting in the oil spillage

The paper delves in critical analysis and examination of the systemic flaws on the part of BP's management that contributed the disastrous tragedy. The paper also highlights the governance weaknesses exhibited in the marketized government agency. In particular, we examine the state regulation of the oil and gas industry earmarked with claims of corruption. The state problems emanated from the early 1980s during the neoliberal Reagan administration. In his era, President Reagan engaged in restructuring of the public service sector that was much publicized. However, the restructured public service undermined the public interest concerning regulatory capitalism. The public service did not place the public interests of the commons above business interests of industry players.

In this paper, we also highlight BP's previous incidents of the occurrence of accidents. The occurrence of the accidents was associated with senior managerial staff efforts of chasing super-profits while undermining the calls of safety. The highly publicized BP occurred against the public interest with the glorification of selfish business interests that consequently neglected public interests. The BP's Board, sub-committees responsible for safety, environmental protection, and health also failed on their jobs of protecting public interests (Bradshaw, 2014).

Regulatory capitalism and the highly publicized public governance

A democratic government engages regulates the country's businesses besides protect the interests of the society against capitalistic market dynamics. The regulation also aims at ensuring social justice for the benefit of all. Powerful corporate and business interests have diluted governments' quest of securing observance of the stipulated market regulations. The powerful companies aim at establishing a privately owned free market with the transformation of the public goodwill into selfish business interests.

The creation of a shadowy and powerful organization referred to as the 'Fellowship' or the 'Family' in the 1930s controlled businesses in the U.S. The group supported the Reagan's administration as it established roots in various political and economic interests of the nations. The group has penetrated the defense, aerospace, and oil industries thereby serving the group's interests. The group strongly opposed the aspects of socialism such as unionism, environmental, and public investments.

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Governments engaged in privatization initiatives despite the public outcry and resistance of the electorate. Powerful neo-liberal technocrats from the IMF, World Bank, and the World Trade Organization significantly influenced governments' move of privatizing social and economic institution in the U.S. Private investors used the opportunity to push the assets prices up, reinforce the financial status of their business, and take advantage of the available global investments. As a result, the companies created a chain of profits that circulated within their circles (Bradshaw, 2014).

Regulatory capitalism manifests through political appointees who head the regulatory agencies. Other appointees were 'experts' from the very same industry under watch by the regulator. Critics raised concerns over President's Bush appointment of individuals to oversee various state agencies. Examples are Reagan Burton, who failed to collect leases from oil companies located in the Gulf of Mexico. The leases are worth billions of dollars. Critics point to the recycling of incompetent individuals from one agency to the next without substantial results to show.

Conflict interests arise because industry players fund regulatory agencies, creating a sophisticated client relationship. Powerful businesses, therefore, resort to using their financial muscle to influence various regulatory policies for their enrichment without considering the public interests (Chen 2010). For many years, the oil industry has changed the oversight roles of state regulatory agencies. Examples of these influential individuals are the Koch brothers whose financial muscle controls government's oversight functions. Such individuals and corporate bodies build outstanding corporate images through charity donations and supporting various communities causes. On the other side, these companies pollute the environmental components of sea, land, and water. The Mineral Management Services (MMS) department under the Department of Interior monitors the role in oil and gas industry in the U.S. (Alexander 2010).

US public policy, greed, money, and power

Following the catastrophic oil spillage in Alaska of Exxon Valdez, the U.S. government lifted bans on offshore oil drilling back in 1990. President Bush had mentioned that offshore oil drilling would provide cheaper oil prices for American citizens. As a result, BP benefitted from this move with its speedy move to drill oil in the Gulf of Mexico. The U.S. war waged against Iraq and Pakistan fueled the need for additional resources to suffice the defense budgets. As a result, BP was the largest offshore oil drilling company in the world.

US policy makers neglected the need to shift from fossil fuels to other carbon-reducing alternatives. They asserted that the oil and gas industry offered a lion's share to the U.S. energy demands. Many community and conservation groups rejected the government's plan to open up the offshore oil drilling of the Gulf of Mexico. They raised concerns over its proximity to the fragile Louisiana wetlands. Fish and shrimps claimed the wetlands as their natural habitats. The area supported the nation's fishing industry (Kurtz, 2013).

BP's Internal Corporate Flaws

The series of major BP oil spills reflect the company's failure in corporate sustainability reporting. BP's report mimicked genuine social and environmental commitments. However, BP engaged in oil dirty business of extraction and exploration (Gray 2010). It also failed to meet the thresholds set by the MMS as it managed to survive the penalties through corrupting the MMS.

BP reflected a flawed system of governance that failed to maintain internal controls of health, safety, and environmental damage assessments. The few directors responsible for these departments demonstrated the lack of transparency and accountability who failed to offer critical reviews over internal and external processes in the sensitive oil industry. MMS figures revealed that for six years running, the BP oil rigs in the Gulf of Mexico failed to attain industry minimums on safety (Alexander 2010). For many years, BP was under scrutiny by environmental groups and ethical investment fund societies. They sought to question the company's social and environmental risks and their response to enhance safety. However, BP failed to offer substantial answers to these questions thereby neglecting the public outcry.

Aftermath of the Gulf of Mexico oil spill

The unprecedented adverse effects on human health and environmental well-being from the oil spill have had devastating consequences than ever imagined. In BP's efforts to disperse the oil, over 1.8 million gallons of toxic chemicals found their way into the air. The dispersant chemicals mixed with water worked to disperse the oil. The releases toxic chemicals pose acute and chronic health hazards to the environment including humans and other forms of life. In 1989, the clean-up exercise of.....

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