Abstract
Growth is supplemented by development, and development in turn, is supplemented by external factors. Today, most corporations use external sources to enhance their productivity and growth. At times it could be at the expense of their workforce, or at times it could be at the expense of the environment in which they work, or as in most cases, it could be because of the combination of both. This has a direct impact on the ecosystem which has by then become highly volatile due to continuous ‘exploitation’ of it. While the imbalance of the ecosystem has brought about climatic changes, the loss of precious, innocent lives in meeting the demands of corporations has left grave questions on the minds of people. Corporate social responsibility (CSR) is about being responsible and supporting those who enhance productivity and profits. Corporate social responsibility can thus be defined as the responsibility of corporations to act in such a way that it exemplifies their willingness to developing positive attitude toward safety and environmental protection. As Holme and Watts (2000) describes in ‘Making Good Business Sense: Corporate social responsibility,’ corporate social responsibility is about “the continuous commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.” This paper presents an overview of BP (British Petroleum) and analyses the economic, social, technological, environmental, and legal factors that form the internal and external influences affecting the company as a true world leader in oil and gas production.
CORPORATE SOCIAL RESPONSIBILITY
The change of the millennium has been rewarding as well as challenging for British Petroleum (BP). As an oil and gas exploration and production company, BP is sure to have issues that have politically, economically, environmentally, technologically and legally challenging. The 20th century has seen both, the developing and developed nations; draw much of the earth’s reserves of oil and gas for human consumption. This will continue for the major part of the 21st century as well until a more viable solution is found. The huge removal of natural resources from the earth’s crust is sure to cause unimaginable damage to the Earth’s current composition and balance. In order to minimize such possible catastrophes, BP drew major, long-term projects in Russia, the Caspian and elsewhere. In addition to this, discoveries from their research facilities, has helped BP open up new frontiers in the search for fossil fuels. John Browne, BP group chief executive said in a speech in California in 1997 that there was a need to balance development and environmental protection.
Oil exploration and production remains a huge profit-making business. The world consumption for oil and gas remains high, and with more production comes more sales and in turn, profit. However, with people getting to be more knowledgeable to external threats and influences such as the imbalance to the eco-system leading to global warming, BP’s contribution to societal development and, protection of its employees and the eco-system through innovative measures, it has created a positive image in the minds of the public as a responsible and accountable organization.
Analysis
Oil exploration operatives are confined to higher-than average rate of workplace injuries. The interaction of man with crude oil, chemicals, lubricants are indeed very intoxicating and can cause severe damage to human biological structure. A 2004 investigation in Houston found levels of toxic chemicals in some neighborhoods high due to oil and gas exploration. (Jordon, 2007)
BP had serious workplace safety problems. 15 workers were killed and over 180 injured in an explosion at its Texas City refinery in 2005. In addition to this, mishaps to two more contractors were also reported during this period; the first fatality occurred on the Alaskan North Slope when a worker walking across a drill pad apparently fell, striking his head, while in Eastern Oklahoma, a man died when he also sustained a fatal head-injury. The company had to pay fines amounting to $384,000 from Indiana OSHA for safety violations at their refinery in Whiting, Indiana. BP was guilty of 14 violations, ranging from inadequate record-keeping to not correcting problems with relief-valve systems at the plant. The company also received a 21.3 million penalty for violations relating to the Texas City explosion, and in April OSHA fined the company $2.4 million for violations at a Toledo, Ohio, refinery (Jordon, 2006).
Australia is a big country with low population. The minority whites took over the reign from the Aborigines to make the country among the most developed nations in the world. It has plenty of petroleum reserves underground and is among the favored destinations for oil and gas producing companies. Petrol sniffing can be hazardous, and when oil and gas exploration began in full swing, the gas vapor which emanated from this process, spread to areas where Aborigines lived, causing severe brain damage to those who inhaled the deadly fumes. Aborigines lived in isolated regions with little connection to the major cities. These small, remote communities had little or no access to quality health, and with the growing number of young Aboriginals dying from inhaling this poisonous gas, it become a national calamity. In addition to this, many others who inhaled this deadly gas became addicts. The government exchequer was reeling under tremendous health funding exercise and funding touched approximately US$165,000 to treat addicts. In addition to this, these addicts led criminal lives and the government had to set aside an additional amount to fight crimes committed by them. (Park, 2007)
Recommendations
Meeting environmental standards and keeping up with market demand is the way forward, and this has been BP’s strategic focus. The safety and happiness of its employees is the prerogative of any organization and BP has done just that by identifying the needs of their employees and addressing them. Every organization must try to understand the importance of environmental preservation and take every possible precaution not to let their growth override ecological and humanistic imbalances. In developing countries, governments use their muscle power to evict people from their rightful lands and offer these to multinational companies to earn more revenue. These people are left to fend for themselves and get little compensation from the government for their land. The companies that do buy these lands for the infrastructural development should be mindful of these people and offer them hope through employment and business opportunities. When trees are felled in the name of habitation expansion, corporations must plant trees to supplement those cut. This way, a balance will accrue.
Solution
In 2004, on receiving an email from an outback youth worker, BP Australia swung into action to curb the petrol sniffing epidemic. The cry for help was sent to every fuel company in Australia, but only BP responded. Led by Jan Sperling and his team, an unleaded fuel, with lower levels of aromatics, that negated the sniffing tendency, was produced at Kwinana refinery in Perth, Western Australia. While regular unleaded fuel contained about 25% aromatics, Opal (the new fuel) had only five. Kwinana refinery shift optimization team leader Alan Gwynne was of the opinion that it was not always that one could do something for the good of society. Apart from rolling out a limited number to remote communities in early 2005, BP worked with local communities and the government to develop a holistic approach to the petrol sniffing problem. Investment in recreation camps for the young along with programs designed to get them back to school was launched. The success of the new fuel encouraged the government to extend the rollout to the outback capital of Alice Springs in February 2006 (Park, 2007).
Another community initiative undertaken by BP was to provide employment to the Aboriginal population. A service station was created in the Sydney suburb of Redfern. BP Australasia regional president Gerry Hueston said that his company believed in mutual benefit; if BP was going to do business in some region, it was their company’s obligation to put something back in. In the case of petrol sniffing, it was a classic tripartite approach, with the communities, government and BP working together to solve what was seemingly an intractable problem. “With the right will, and bipartisan political support, it’s amazing what BP can make happen,” he ended (Park, 2007).
BP tied up with a leading Indian conglomerate for developing alternative energy for small towns and villages in India in 2007. The board of Tata BP Solar confirmed that this would represent a quantum leap towards the Tata-BP combine initiative to help develop a 300MW plant. The combine would then have doubled the facility’s module manufacturing capacity from 45MW to 85MW by end 2007 as planned. (BP: Alternative Energy, 2007)
The Tata BP Solar board plan was devised with the hope that the plant will achieve its full designed potential of 300MW with an investment US$300 million by 2010. This would not only have served the nation with cheaper and environment-friendly energy source, but would also have generated a sizable number of jobs to the local community both, directly and indirectly. This project ensured that Tata BP Solar, already a leader in cell manufacture and the design of solar solutions, retained its position as the largest manufacturer of solar PV products in the Indian sub-continent (BP: Alternative Energy, 2007).
Conclusion
BP has come a long way since it first tryst with oil exploration in 1908 in Persia. The company had undergone tremendous setbacks due to internal and external factors, and has through CSR initiatives, become one among the top conglomerates in the world today. The company has some form of presence in over 150 countries around the globe and has strong R&D and manufacturing facilities in Spain, the US, Australia, India and China. The company has kept up its commitment to give back to society something that it took from them. Employment opportunities, societal development, and education are a few initiatives taken by the company as part of their obligation to do so. The company has also done well in decreasing the imbalance of the eco-system. The use of alternative power is a way to mitigate such problems. The initiative in Australia to end petrol sniffing by young Aborigines has helped to save the Australian exchequer millions of dollars in health care while the company continues to enjoy the support of the people and government of that land in oil and gas exploration and production. The amalgamation of these players has truly made BP a great multinational company.
Reference
BP: Alternative Energy, 2007, BP and Tata: $US 100 Million investment to create solar mega
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Holme.W and Watts.P (2000), Corporate Social Responsibility: Making good business sense,
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Park T. (2007), BP Magazine: A gem of an idea, Issue: 2, P.2-5, Journal Report, Web,
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