Ethical spill-overs

If the worst case scenario is an unprecedented catastrophe, is it worthwhile even starting?

Although the BP oil spill crisis has not yet reached an end, some reflections about this incredible story can be helpful in thinking more seriously about how some institutions are running our civil society. The spiciest ingredients of this catastrophic incident are now well known. However, let’s do a quick recap of the relevant facts and of the key actors before thinking a little bit about this story.

BP was interested in finding new natural oil reservoirs in the Gulf of Mexico. The execution of the exploratory activities – which, given the extreme depth of the ocean floor, were highly risky and technically difficult — was outsourced to another company, Transocean. It is worth mentioning that Transocean was the owner of the oil rig and the commander in chief of all operations. BP was paying Transocean more than US$400,000 per day to conduct the exploration activities.

Unfortunately, BP and Transocean are not the only actors in this tragedy. We have recently discovered that on the government side the Minerals Management Service (MMS) of the US Department of the Interior had exempted the BP offshore drilling plan from environmental review. In other words, the government office deputed to guarantee national (if not global) interests had decided to look the other way when it came to BP and Transocean’s activities in the Gulf of Mexico.

But please be aware: this is just half of the story. After the explosion of the oil rig, the deaths of at least 11 people, the injury of 17 others, and the spilling of thousands upon thousands of oil barrels into the ocean, much more crucial situations arose.

BP adopted a rather peculiar example of corporate social responsibility in trying to minimize the magnitude of the problem: It initially reported a spill of about 1,000 barrels per day, against the 25,000 to 60,000 lately estimated by a panel of specialists. Meanwhile, Transocean, which was technically and operationally responsible for all drilling activities, strategically hid itself and its responsibilities in BP’s shadow.

And the best was yet to come with the US Government’s Dr Jekyll and Mr Hyde parody. On the one hand, immediately after the BP accident, the MMS exempted 26 other offshore drilling plants from environmental review. In other words, the MMS has decided to close its eyes in the face of 26 similar drilling projects. On the other hand, President Obama has slowly tried to force BP to be fully accountable for this tragedy. However, he has forgotten to explain the weird and irresponsible behavior of the MMS to the world.

Now, instead of attempting a discussion on who is responsible for what, I would like to focus on a couple of issues that were forgotten by media, specialists, and even activist groups. The first is the attempts of profit-driven organizations to manage situations that are too complex for them to handle and that can turn into catastrophic events. The second is the overconfident and imprudent use of new technologies. Let’s look more closely at each of these two problems.

The BP-Transocean exploration in the Gulf of Mexico was a very risky and extremely difficult venture. We have recently discovered that several Transocean employees were extremely worried about the danger of this project. Now, the question that follows is: if the worst scenario associated with oil search in deep water is catastrophic environmental damage, is it reasonable to conduct such an activity? We should always remember that reducing risk factors with new advanced technologies does not mean neutralizing them. If the remote event associated with an activity is literally a disaster, maybe we should consider stopping that activity.

Is this argument completely wrong? To answer this difficult question, let’s think about a simpler one. Would you allow your children to play with a real bomb, although the possibility of its explosion is less than 0.0005%? I certainly wouldn’t, and I’m sure you wouldn’t either. Why? Simply because you would not like to deal with even an infinitesimal risk of killing your children. Now we can understand why it’s better to give up on activities that are too risky. We should never forget that whenever we are talking about human lives and the good health of our earth, statistical arguments are not the best way to address the very sense of social expectations.  People expect companies to protect the environment and human health, no matter what. I think that too many managers and policymakers forget this very basic assumption of our society.

There is another issue involved in this story that makes me extremely uncomfortable. According to Transocean’s website, the Deepwater Horizon was a “semi-submersible… dynamically positioned… column-stabilized… drilling unit capable of operating in harsh environments and water depths up to 8,000 ft (upgradeable to 10,000 ft).” This toy was designed to drill submarine wells and to search for natural reservoirs of oil and gas using a marine rise with a 50 centimeter diameter.

The interesting issue is that the Deepwater Horizon had only two security systems to prevent explosions. In other words, the security and safety of hundreds of people and of the Gulf of Mexico’s habitat relied on just two security systems, which, by the way, did not work. What is much more interesting is that the evidence of the last month has highlighted that BP, Transocean, and even the related US government offices were unprepared to deal with the failure of these two security systems. This is not the first time that firms and the US government have made quite large mistakes by over-relying on high tech equipment. I would like just to point out that the Guidant Corporation and the FDA are still under scrutiny for the commercialization of (and authorization to distribute) faulty pacemakers that caused the deaths of many people.

BP, Transocean, and even the US Government should be accountable and pay for the damage caused by this ecological disaster. Responsibilities should be clearly identified, sanctions should be applied, and damages should be repaired.

But my wish is that politicians, policymakers, and civil society in general will think more carefully about the ethical consequences of pretending to manage highly risky situations and of our blind faith in new technologies. In the end, just some prudence and honest realism would make this world a better one and preserve our planet from irremediable injury.

Antonino Vaccaro is the Executive Director of the Center for Ethics, Business and Economics of the Catholic University of Portugal and a faculty at IESE Business School, University of Navarra.