Case Study: BP Oil Spill

Background

This lesson has addressed the key components of ethical principles in crisis communication, including the moral codes of responsibility, accountability, and humanistic care. The case of the BP oil spill in $2010$ provides an important example for understanding how these principles are valued by public opinion in a crisis situation and how the communication actions by a corporation in this type of circumstance might have a long$-$term effect on the brand image of the organization.

On April $20,2010,$ BP$$s Deepwater Horizon oil rig exploded, causing what has been called the worst environmental disaster in U$.$S$.$ history and taking the lives of $11$ rig workers. For $87$ days, oil and methane gas spewed from an uncapped wellhead, $1$ mile below the ocean$$s surface. The federal government estimated that $4\mathrm{.}2$ million barrels of oil spilled into the Gulf of Mexico.

Mistakes in Initial Response

According to NPR$,$ BP$$s action has become a textbook example of how not to do crisis management. BP executives declared it was not their accident, blamed their contractors and made the company look arrogant and callous. CEO Tony Hayward repeated insensitive comments in public, like this: $$No one wants this thing over more than I do$.$ But, you know, I$\text{'}$d like my life back.$$ He also suggested that the spill$$s environmental impact would be $$very$,$ very modest.$$ Images of Hayward attending a yacht race just $48$ hours after a hostile interrogation by a US congressional committee on the oil spill provoked sharp criticism on both sides of the Atlantic. Although the company, formerly British Petroleum, officially changed its name to BP in $2001,$ Americans consider it a foreign company even though it has just as many American shareholders as British ones, and its most significant operations are in the United States.

PR Actions

To soothe angry Americans, BP aired a multimillion$-$dollar national TV spot in June in which Hayward pledges: $"$We will make this right." Hayward also promised BP would clean up every drop of oil and $$restore the shoreline to its original state.$$ President Obama said the money spent on the ads should have gone to cleanup and compensating devastated fishermen and small business owners. Instead, the ad indicated that the company didn't even follow its internal guidelines for damage control after a spill. Its spill plan filed the year before with the federal government, says of public relations: $$No statement shall be made containing any of the following: promises that property, ecology or anything else will be restored to normal.$$ BP also bought online ads that pop up when people search for information about the oil spill on Google and Yahoo. The ads link to BP$$s oil$-$response sites and typically appear above or to the right of other search results. BP said the idea was to help people in the Gulf find the proper forms to fill out quickly and effectively. However, many people suggest it's a move to steer searchers away from bad press for BP$.$

Crisis management experts stated that the only reliable way to repair BP$\text{'}$s badly tarnished image should be the obvious one $$ to plug the hole where oil was still leaking out. Unfortunately, it would take nearly three months before the leak was stopped and almost five months before the well was declared effectively dead. Public relations experts pointed out that BP ran its crisis communications in the same $$ham$-$fisted$$ manner they$$ve run the clean$-$up operation in the Gulf.

$"$BP$\text{'}$s handling of the spill from a crisis management perspective will go down in history as one of the great examples of how to make a situation worse by bad communications," said Michael Gordon of New York$-$based crisis PR firm Group Gordon Strategic Communications. $$It was a combination of a lack of transparency, a lack of straight talking and a lack of sensitivity to the victims. When managing an environmental disaster of this magnitude, you must manage the problem and all the stakeholders.$$

Consequences.

BP attempts to convince people that the Gulf of Mexico is healing after a while. In $2015,$ BP released PR materials that highlight the Gulf$$s resilience, as well as a scientific report showing the area is making a rapid recovery. But evidence is mounting that wildlife is still struggling to rebound five years after millions of gallons of oil spilled into the Gulf.

In June $2016,$ BP issued its final estimate of the cost of the spill, the largest in U$.$S$.$ history. The total cost of the $2010$ oil spill in the Gulf of Mexico was $$61\mathrm{.}6$ billion. Under the settlement with BP$,$ five states in the Gulf area and local governments will receive payments over the next dozen years. The funds will enable them to ramp up vital restoration work along the coast. In addition, BP continues to settle claims from business owners and residents who say they were harmed.

Moral of the Story

Question: If you were CEO of BP$,$ how would you handle this critical$$situation$?$ with references