Background
British Petroleum (BP) is an enormous, global corporation that operates in 80 different countries all over the world. It was founded in 1909 by William Knox D'Arcy in Persia (or modern day Iran). The company is now based in London, UK.
According to a report developed by Forbes, BP is the 17th largest company in the world.[1] BP employs about 84,000 people and produces about 3.2 million barrels of oil everyday. Each barrel contains about 42 gallons of “crude oil” and about 19 gallons of usable motor gasoline. After some quick math, I found that BP produces 134.4 million gallons of crude oil each day and 60.8 million gallons of usable motor gasoline. The economic value generated by BP each year amounts to $403.3 billion. Its replacement cost profit, or the money that BP shareholders have made, is $23.6 million. BP’s operating cash flow, or the net cash provided by operating activities, is $33.2 billion.
BP oil manages the BP, Aral, Castrol, AmPm and Wild Bean Cafe brands. BP “aims to provide customers with fuel for transportation, energy for heat and light, lubricants to keep engines moving and the petrochemicals products used to make every day items.”[2]
Responsibility to Communities; Corporate Social Responsibility Approach
BP defines itself as “one of the world’s leading integrated oil and gas companies.We aim to create long-term value for shareholders by helping to meet growing demand for energy in a safe and responsible way. We strive to be a world-class operator, a responsible corporate citizen and a good employer.”[3]
BP tries to achieve sustainable success as a group by acting in the long-term interests of their shareholders, partners and society as a whole. They also work to create value for their investors as well as for the communities where they conduct business. One of BP’s main goals is to focus on “value rather than volume” in their production of gas and oil.[4]
After the 2010 Deepwater Horizon oil spill, which is known as the worst oil spill in US history and loosed4.9 million barrels of oil into the Gulf of Mexico, BP pleaded guilty to manslaughter charges that came from the spill and the 11 men who died in the incident.[5] A federal judge also found that BP had neglected to pay attention to the events leading up to the oil spill which caused them to owe more to the federal government.[6] The company agreed to pay a fine of $4.5 billion in government penalties, and negotiated the deal such that they wouldn’t have to pay penalties in any future lawsuits relating to the spill. One of the company’s executives, Bob Dudley said, "From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf." [7] Since the spill, BP has focused on oil spill preparedness and plans for potential future crises. The corporation created a ten-point-plan in 2011 to refocus their resources, in order to avoid another spill.
To learn more about recent events surrounding the oil spill and the supreme court case of BP vs. the US government click here
Responsibility to communities overseas
BP recognizes that many countries and communities are being destroyed as more oil is drilled. The company has engaged in many projects abroad to preserve and protect indigenous communities where oil is mined. One example of such a project is a program in India that creates opportunities for students to study topics in STEM (Science, Technology, English, Math). BP partnered with a local NGO to create the program and 25 schools have participated in the project thus far.[8]
Citations
1. Liyan Chen, "The World's Largest Companies: China Takes Over the Top Three Spots," Forbes, last modified May 7, 2014, accessed December 6, 2014, http://www.forbes.com/pictures/fjlj45hjf/no-17-bp/.
2. BP Global, accessed December 6, 2014, http://www.bp.com/.
3. BP Global.
4. BP Global.
5. The Ocean Portal Team, "Gulf Oil Spill," Ocean Portal-Find Your Blue, accessed December 6, 2014, http://ocean.si.edu/gulf-oil-spill.
6. Stephen Mufson, "BP’s ‘Gross Negligence’ Caused Gulf Oil Spill, Federal Judge Rules," Washington Post (Washington, DC/USA), [Page #], accessed December 6, 2014, http://www.washingtonpost.com/business/economy/bps-gross-negligence-caused-gulf-oil-spill-federal-judge-rules/2014/09/04/3e2b9452-3445-11e4-9e92-0899b306bbea_story.html.
7. Chris Isidore, Charles Riley, and Terry Frieden, "BP to Pay Record Penalty for Gulf Oil Spill," CNN-Money, last modified November 15, 2012, accessed December 6, 2014, http://money.cnn.com/2012/11/15/news/bp-oil-spill-settlement/.
8. BP Global.
9. BP Global.
10. BP Global.
11. "The Environmental Impacts of Offshore Oil Drilling: The Case of BP Oil Spill," reading, Encyclopedia of Islamic Economics and Finance, accessed December 6, 2014, http://www.iefpedia.com/english/wp-content/uploads/2012/12/The-Environmental-impacts-of-offshore-oil-drilling-the-case-of-BP-oil-spill-SADIKI.pdf.
12. Rick Outzen, "BP's Shocking Memo," The Daily Beast, last modified May 25, 2010, accessed December 6, 2014, http://www.thedailybeast.com/articles/2010/05/25/shocking-bp-memo-and-the-oil-spill-in-the-gulf.html.
13. BP Global.
14. BP Global.
15. BP Global.
16. BP Global.
Responsibility to the Environment
BP is working to reduce waste by using more vessels which use and emit less CO2. By 2050, BP hopes to have cut their CO2 emissions per tonne/km. Since 2010, the company has reduced their energy consumption by 50%. BP committed $8 billion to alternative energy between 2005 and 2014, and followed through with that promise by investing in wind and biofuel energy. Although they have not promised to invest any more money in alternative energy, BP’s CEO of Alternative Energy, Phil New, says that the company will continue to give money to wind and bioethanol high quality opportunities. [9]
However BP only has 100 employees working in the Gulf Coast Restoration Organization out of their 84,000 total employees.[10] It is important to remember that the products that BP is producing and distributing, gas and oil, are damaging to the environment. Even the seismic surveys that are conducted to search for offshore oil can kill and injure fish and their eggs, cause whale beaching and disrupt migratory patterns of deep-sea animals. During drilling, toxic drilling fluids and wastewater are released into the ocean, deforming, genetically damaging, and killing fish embryos.[11]
Responsibility to Workers
An article by the Daily Beast that examines BP’s approach to saving money through their detrimental treatment of their employees. The company estimated that the value of a life of one of its workers was $10 million.[12] During the Deepwater Horizon spill, 11 employees were killed and 17 were injured.
On its website, the company notes that they are focused on workforce welfare, health and safety, security, land acquisition, environmental damage, and livelihoods.[13] One example of a project that BP is involved in to protect workers' rights abroad is a housing complex in the Tropics of Brazil on BP’s sugarcane-to-biofuels mill. The complex provides each worker with about 8 square meters of space, bathing and laundry facilities, a cafeteria, medical care and a TV room.[14] This is only one of many examples of the ways that BP is working to create settings where their workers are treated with more respect. BP also states that they aim to hire workers from the local area whenever possible, as they have done in Angola where 70% of the workforce is Angolan.[15]
In the US, BP also has a huge program for employment of veterans. They believe that the skills learned and taught in the military are similar to those needed as an employee at BP and therefore encourage veterans to become a part of their workforce.[16] Not only does BP support veterans through employment, but they also create athletic opportunities for them by providing funding for the US paralympic teams. According to their website, in 2014, BP provided $1 million in funding for the US olympic/paralympic committee.
To read more about BP employee testimonies, click here.
Press play for more information about BP's approach to sustainable energy:
Press play for more information about BP's commitment to support verterans:
Responsibility to Customers and Shareholders
As a company, BP keeps all of its stakeholders involved, whether they be employees, the governments and regulators of countries where the company operates, or BP’s customers. Each category of stakeholder receives a different type of engagement, ranging from consultations with local non-governmental organizations to keeping employees informed about the progress and changes being made in the company.
BP definitely produces huge amounts of products, but they also focus on producing oil and gas that is of high quality and value. BP also aims to create transparency between corporation and shareholders by communicating with shareholders directly by email and by phone.
BP Oil
photo courtesy of wikipedia.org
Photo courtesy of Flickr user, Amy Phetamine
Photo courtesy of wikipedia.org