MBA Follies : The Deepwater Horizon Oil Spill and Corporate Environmental Ethics

Of course the quick and dirty summary on corporate environmental responsibility is there is no reason a corporation should waste a minute of its time on the environment since that is the responsibility of government and the public (cities, towns, states, etc). Corporations operate on the principles of profitability and on the separation of function/roles between corporation and government. This means the corporation is soley concerned with making use of the environment hence generating profits, taxes (lessened by clever use of loop holes)and jobs. This is the foundation of good business and America should wake up to this. This is not to demonize business, but to say that the public, by its ignorance or preferences or laziness, shares responsibility for whatever evils corporate behavior generates.

That a corporation might ruin an environment or deplete a non-renewable resource is not its responsibility...although any reasoned person would quickly point out that a depleted resource automatically equates to an end of corporate profitability sooner or later so corporations should pay attention to these matters. But, a corporation is focused on near-term bottom line profits so any consequence further out in time than 90 days or 6 months, and usually just 30 days, is not a primary concern relative to the pressures of "now", at least in America's business world.

A sigificant case illustrating the nearsightedness of corporate attention (British Petroleum and its subcontractors, including Halliburton) has to be the huge oil spill about to swamp the coasts of the southern U.S.. Apparently, BP decided not to install full drilling safeguards against blowout and explosions. What is certain though, is BP lobbied hard along with other oil companies for the relaxation of regulatory requirements that many believe would have prevented this accident.

Did BP do wrong to fight more stringent regulations? This blogger thinks "NO"!. In the context of the saved cost of extra strength drilling pumps and stronger back-pressure valves, and especially given the successful Big Oil lobbying for Congress to limit oil spill liability to only $75 million (when first quarter PROFITS were $4-5 Billion), BP's management deserved praise from its board of directors and stockholders. That 11 human lives were lost in the blowout was a risk the crew members acknowledged when they signed on for the jobs, and they were paid premium wages for their risk taking; one also assumes BP offered adequate life insurance policies to handle the human life collateral losses.

So what's the problem, America? You know the nature of the corporate game. You elected pro-business Presidents and congress persons, or at least bought into the hype of "business is America's business". Sounds so rhyming and "right", right? And what about those wimpy tree huggers who even want to regulate over-fishing? Until it now looks like this might well be the end for a long time of nice sandy beaches, and the fishing industry along all the Gulf states and eventually along most of the East coast as well. Well, what's the overall national 5-6 year bottom line going to look like for lost oil profits, the closing of seafood industries and the loss of a lot of jobs?

This is the issue: corporations are not "ethical" or "moral" in the sense that humans understand, corporations are only profit oriented (as they should and must be to survive) and profit goals are balanced by the closest thing corporations can come to ethics which is risk assessment. Risk assessment even considers the "cost" of lying and the liability cost of loss of life. In this context, it is dumbfounding why the Supreme Court recently ruled, to this blogger, so strangely in favor of corporations as being near-equivalent to human citizens. This is a big mistake and will bring drastic consequences before it is reversed.