November 25, 2012

Beyond Profits

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On November 15, BP pled guilty to 14 criminal charges tied to the April 2010 Deepwater Horizon oil rig explosion, which killed 11 workers and spewed 4.9 million barrels of oil into the Gulf of Mexico. The company will pay the largest criminal resolution, $4.5 billion, including the largest criminal fine, $1.256 billion, in U.S. history.Federal prosecutors were successful in holding not just BP but individual employees accountable. The top two rig supervisors have each been charged with 11 counts of manslaughter for their negligence and David Rainey, the former vice president for exploration in the Gulf, has been charged with obstruction of Congress.When Ed Markey (D-MA), chairman of the House Energy and Environment Subcommittee, chastised BP for lying to Congress and to the American people, he was referring to Rainey’s public, repeated and conscious understatements of the oil flow rate. BP admitted that through Rainey, the company provided a misleading figure of 5,000 barrels leaked per day. Government and independent scientists later estimated that more than 60,000 barrels per day were being leaked. The degree of misrepresentation is at first hard to believe, but on second thought, the decision is entirely consistent with the audacious risks that BP’s leaders have made the company’s modus operandi.The legal team for one of the rig supervisors underplayed its client’s culpability by saying, “After nearly three years and tens of millions of dollars in investigation, the government needs a scapegoat.” Even if this were true, it is not the government but BP who initially made scapegoats of its employees. The company sacrificed Rainey to do the lying to Congress and to the public.The question of whether the corporation acts as an individual or individuals within a corporation act independently have been hotly debated in regards to the Citizens United Supreme Court ruling. These discussions wrestle with what it means for a corporation to be a moral political and legal actor.Two decades ago, Justin Welby, the next archbishop of Canterbury and a former oil industry employee, wrote a dissertation on whether a company acts as a moral agent, or whether it has only the duty to maximize profits. Arguing the former, Welby said, “The obligation to do no more than obey the law turns the company manager into a schizophrenic, amoral automaton, careful of ethical responsibility in every action except those taken on behalf of the company.”I do find it problematic that a handful of people were charged with negligence when their actions were only consistent with, or perhaps even mandated by, the ethos and policies upheld by a much larger group of people. They are complicit but not necessarily more so than their supervisor or co-worker. That they are targeted by the courts for punishment may not be fair, but it is, in my eyes, still ethical because it serves as a necessary reminder that the moral and legal quality of a corporation cannot be abstracted from the decision making of individual employees.It’s actually quite forgiving to characterize BP’s crimes against the rig workers, the Gulf ecosystem and the people whose livelihoods are dependent on the Gulf as merely negligent. The risks BP took with worker safety and environmental protection were calculated and deliberate. Yes, they’re now paying for underestimating those risks, but the money could not begin to compensate for the damage done by the oil spilled and by the trials of standing up to BP for compensation and cleaning up the mess it left.Greenpeace was far from impressed by the size of the fine, viewing it as the equivalent of a “rounding error” for a cash cow like BP. The company can afford to pay these fines and to some extent (perhaps not on the scale of the 2010 spill), even factors them into its expenses. The fact that BP comfortably took those risks means that the full blame for spills does not rest on oil companies alone.The government — our government — through loose economic and environmental regulations, has allowed oil companies to become so profitable that it is more cost-effective for them to pay the fines than to follow the rules. In permitting offshore drilling, the government has also gambled with workers’ lives, environmental wellbeing and peoples’ livelihoods. The outcome, as the rig supervisors’ lawyers pointed out, is that the government has spent tens of millions of taxpayers’ dollars investigating the spill and will spend more on fighting BP in trials and overseeing its safety and ethical conduct for the next four years.One potential trial, scheduled for February, will be on the Clean Water Act, which was not fully resolved as part of the settlement. The fine could be set between $5.4 and $21 billion, but environmentalists are not hopeful since the settlement did not mention gross misconduct. The chairman of BP has already expressed relief and said that the settlement “allows us to vigorously defend the company against the remaining civil claims.”The government cannot allow BP to put the spill behind it when the ecosystems and communities of the Gulf are still suffering. This settlement succeeded in setting a precedent for holding companies and individual employees accountable for gambling with other people’s lives and shared resources. The government needs to continue to pull out all the stops to ensure that some measure of justice is ultimately served.

Jing Jin is a senior in the College of Arts and Sciences. She may be reached at jingjin@cornellsun.com. Ringing True appears alternate Mondays this semester.

Original Author: Jing Jin