Case Study: Deepwater Horizon Oil Spill
The petroleum that had leaked from the well [owned and operated by an offshore drilling company Transocean and leased by BP Plc] before it was sealed formed a slick extending over thousands of square miles of the Gulf of Mexico. To clean oil from the open water, 1.8 million gallons of dispersants – substances that emulsified the oil, thus allowing for easier metabolism by bacteria – were pumped directly into the leak and applied aerially to the slick. Booms to corral portions of the slick were deployed, and the contained oil was then siphoned off or burned. As oil began to contaminate Louisiana beaches in May, it was manually removed; more difficult to clean were the
state’s marshes and estuaries, where the topography was knit together by delicate plant life. By June, oil and tar balls had made landfall on the beaches of Mississippi, Alabama, and Florida. In all, an estimated 1,100 miles (1,770 km) of shoreline were polluted. Economic prospects in the Gulf Coast states were dire, as the spill affected many of the industries upon which residents depended. More than a third of federal waters in the Gulf were closed to fishing at the peak of the spill, due to fears of contamination. A moratorium on offshore drilling, enacted by U.S. Pres. Barack Obama’s administration despite a district court reversal left an estimated 8,000– 12,000 temporarily unemployed. Few travelers were willing to face the prospect of petroleum-sullied beaches, leaving those dependent on tourism struggling to supplement their incomes. In November 2012 BP reached an agreement with the Department of Justice to plead guilty to 14 criminal charges, among them 11 counts of felony manslaughter, and violations of the Clean Water and Migratory Bird Treaty acts. The agreement carried penalties and fines amounting to more than $4.5 billion, of which nearly $1.26 billion would go to a discretionary fund overseen by the DOJ, some $2.4 billion to the National Fish and Wildlife Foundation (NFWF), and $350 million to the National Academy of Sciences (NAS). BP also agreed to pay more than half a billion dollars to the Securities and Exchange Commission for misleading its shareholders about the magnitude of the oil spill. The deal was approved in January 2013.
Except for Pallardy, R. nd, ‘Deepwater Horizon oil spill: Environmental Disaster, Gulf of Mexico [2010], Encyclopedia Britannica: https://www.britannica.com/event/Deepwater-Horizon-oil-spill
(accessed 13 January 2021).
QUESTION 1
You were recently appointed as the international manager of BP plc, and are in charge of its integrated reporting. You are excited about the opportunity as it gives you a chance to implement the Sustainability Accounting Standards Board’s (SASB) reporting framework, which covers the five dimensions of environmental, social capital, human capital, business model and innovation, and leadership and governance.
QUESTION 2
Many companies experienced disruptions and vulnerabilities across the business value chain during 2020, due to the Covid-19 pandemic. Assume you are the chief executive officer of a multinational mining company.
a. Evaluate the vulnerabilities brought to your company by Covid-19, focusing on:
- People (workforce);
- Risk exposure;
- Production flexibility challenges;
- Logistics;
- Availability of materials; and
- Uncertainties of future demand.
Make sure your answers are specific to the impact of the Covid-19 pandemic across your multinational mining company.
b. Businesses still need to operate – pandemic or no pandemic. Propose actions to be taken in these uncertain times, focusing on:
- Governance responses;
- People and the workplace;
- Financial due diligence;
- Operations; and
- Monitoring and reporting
QUESTION 3
“The executives at international banks, insurers, telecoms providers, and other businesses often don’t realize that simple, elegant cloud infrastructures are frequently easier to pull off the bigger they get. Instead, decision-makers fear the change the cloud represents, get concerned about regulatory compliance, and therefore hesitate to open the door as the opportunity is knocking” (iLab, nd). Evaluate the statement above in the context of a business case in favor of using cloud computing in your international company.
QUESTION 4
You have recently taken over as a CEO of a multinational company that went through a merger last year. After your orientation, you discover that the teams from the merged companies were experiencing cultural misunderstandings and antagonisms emanating from failure to embrace cultural diversity. Appraise the cultural diversity strategies you will employ to resolve the cultural problems you have identified.
