Evaluation of Business Code of Ethics Steven Turlington PHL/323 December 4, 2012

Evaluation of Business Code of Ethics A code of ethics states a companys standard to of work. It also tells a potential employee its values, group standards and legal requirements, and clarifies the ethics and compliance expectations for everyone who works there. At BP (British Petroleum) they had a code of conduct. This is another form of a code of ethics. I have reviewed this code of conduct set into place as of January 1, 2012. All of the standards are sound and look good on paper. Yet, over the many years BP has been in business, they have had numerous ethical issues arise. For more than ten years the EPA (Environmental Protection Agency) has been investigating BP. There has been many ethical issues that have come up against BP over the years that the EPA has found them guilty of, but it seems that BP does not want to follow the laws set by the U.S. government. BPs code of conduct covers health, safety and the environment; its people, its partners and suppliers, governments and communities; and protecting BPs assets. Each section contains key principles, basic rules and advice on where to find further information. A new section added from the previous code is, Living our Code, which is designed to help people make decisions when faced with dilemmas where there are no clear rules to follow. The code of conduct also includes key points from new BP standards related to anti-bribery and corruption, anti-money laundering, competition and antitrust law, and trade sanctions. It is a very well written code of ethics, yet from other articles that I have read, BP has a problem following its own codes and guidelines. In an article I have read, a woman named Jeanne Pascal (former EPA attorney) spoke out about all the things that had gone wrong at BP over the many years while they were under investigation. For 12 years, Pascal had wrestled with whether BPs pattern of misconduct should

disqualify it from receiving billions of dollars in government contracts and other benefits. Federal law empowers government officials to debarban from government business companies that commit fraud or break the law too many times. Pascal was a senior EPA debarment attorney for the Northwest, and her job was to act as a sort of behind-the-scenes babysitter for companies facing debarment. She worked with their top management, reviewed records and made sure they were good corporate citizens entitled to government contracts. At first, Pascal thought BP would be another routine assignment. Over the years shed persuaded hundreds of troubled energy, mining and waste-disposal companies to quickly change their behavior. But BP was in its own league. On her watch she would see BP charged with four federal crimesmore than any other oil company in her experienceand demonstrate what she described as a pattern of disregard for regulations and for the EPA. By late 2009 she was warning the government and BP executives themselves that the companys approach to safety and environmental issues made another disaster likely. Here is a short history of where BP came from. BPs ascent to the top tiers of the oil industry hit full stride in 1995, when John Browne became CEO. The company was founded as the Anglo Persian Oil Company in 1909 but languished after Middle Eastern countries nationalized their oil in the 1970s. By the time Browne took over, it was so far behind Exxon and Shell, the worlds largest independent oil companies, that it could hardly feel their tailwind. In 1998 Browne put together what was at the time the largest merger in corporate historythe $61 billion buyout of Amoco Corporation. By mid-2001 he had also bought ARCO and four other companies. On paper, the company quadrupled in value and became a huge global competitor overnight. Browne was hailed in Britain as the Sun King, and in 1999 BPs stock soared to what was then an all-time high. BPs next challenge was not only to integrate its thousands of

new employees and numerous industrial facilities, but to do it without increasing the companys already-significant debt. Browne, with little wiggle room, brought the companies into the fold by slashing jobs and cutting costs. He squeezed out $2 billion in savings from the Amoco merger alone. At the same time he steamed ahead with extracurricular projects that Tony Hayward would later describe as distractions. Browne delivered speeches on climate change. He rebranded the company from British Petroleum to BP and added the Beyond Petroleum tagline to put it in a more cosmopolitan, ecological light. But Browne and other senior managers werent deeply engaged in the day-to-day operations of their facilities, and the disparate corporations they acquired were never fully integrated. More than a decade later, employees still identified themselves as ARCO, or Amoco, or wherever else they came from. And each of those cultures approached safety and maintenance differently. While Browne reveled in the spotlighthe was even knighted by Queen Elizabethcracks began to appear in his burgeoning company, cracks that Jeanne Pascal would be among the first to spot. When you dig into BPs past you will find that they have had a long history of cutting corners. In Alaska, home to one of BPs longest-standing and most important business units, the company produced nearly twice as much oil as ConocoPhillips, the other major company operating there, but since 2000 it has also recorded nearly four times as many large spills of oil, chemicals or waste. In the Gulf of Mexico, BP had more spills than Shell between 2000 and 2009, even though Shell produced more oil there. BPs workers also appear to be more at risk. In Alaska, it has had 52 worker-safety violations since 1990, compared with ConocoPhillips seven. Nationally, according to an extensive analysis of data from the Occupational Safety and Health Administration, BP had 518 safety violations over the last two decades, compared with 240 for Chevron and even fewer for its other competitors. Since those statistics were compiled, in 2009,

OSHA has announced 745 more violations at two BP refineries, one near Toledo, Ohio, and the other in Texas City, Texas, where 15 people were killed and 170 injured in a 2005 explosion. In the last decade, OSHA records show that BP has been levied 300 times more in fines for refinery violations than any other oil company. Many of the employees had begun to call Pascal with complaints about safety and possible disasters that could happen at any moment. Even with this evidence from the employees Pascal could not find a legal way to shut down BP. Some of these employees where dismissed after BPs five year probation was lifted for an earlier crime. Soon after came the Texas explosion of 2005. BP is very good a writing its code of ethics, but they do not back them up with actions. Through the numerous oil spills and alleged pay offs, BP has not lived up to it code. This company has a sense of entitlement, meaning they think they deserve to be at the top and will do whatever is necessary to get there. BP is a leader in its industry when it comes to oil spills and accidents. They have tried to cut back on spending and chose to do so in the worst possible way; now their employees and their families have paid the ultimate consequence. I did not see any flaws with BPs code of conduct except the inability to follow it.

References Code of Conduct by BP retrieved from: http://www.bp.com/sectiongenericarticle.do?categoryId=9038306&contentId=7006600 EPA Officials Weigh Sanctions Against BPs U.S. Operations, by Abrahm Lustgarten ProPublica, Nov. 28, 2012 retrieved from: http://www.propublica.org/article/epa-officialsweighing-sanctions-against-bps-us-operations Opinion: BP puts costs ahead of environment. Are we surprised? by David Ohreen July 5, 2010 retrieved from: http://business-ethics.com/2010/07/05/1432-opinion-bp-puts-well-costs-aheadof-environment-are-we-really-surprised/