British Petroleum: Corruption Involving Ethics | Free Essay Example

British Petroleum: Corruption Involving Ethics

Words: 1100
Topic: Business & Economics
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Introduction

Economists rate BP previously referred to as British Petroleum as the third-largest oil company in the world. Its locality in London. It merged with Amoco and changed its name to BP. It rebranded itself by creating a new logo, slogan, and tagline. However, the company was linked to a corruption scandal and the failure of its employees to comply with the stipulated code of conduct.

An analytical perspective of the corruption case involving BP

BP is a multimillion-dollar oil business. This research confirms reports of corruption about the business. The fraudulence was linked to claims of compensation by the company’s workers during the 2010 Deepwater Horizon Oil Spill in the Gulf of Mexico. A former FBI investigator, Louis Freeh, began conducting investigations on the company’s corruption case. Freeh’s report was not only shocking but also memorable.

Freeh supported the Louisiana based settlement administrator despite finding a number of other junior administrators culpable of corrupt conduct in the course of the payout process. He claimed that the compensation process that followed BP’s 2010 Gulf Spill was not clear. BP paid $25 billion in damage claims and “clean up” costs to victims of the oil spill.

The company requested the intervention of the presiding federal judge, Garl Barbier of New Orleans. It specifically wanted Garl to stop further investigations on the company, but the judge declined the organization’s request prompting the business to appoint Mr. Freeh as a special investigator.

Freeh reported that he did not find any evidence incriminating Patrick Juneau, the court’s claims administrator of having been involved in any conflict of interest or immoral conduct. The investigator recommended that Barbier allow Juneau to go on with the payments of claims. BP denied that hundreds of millions of dollars in payout were exaggerations.

Freeh’s suggestions on payments seemed a bit strange according to the findings of this study. He reported that two of Juneau’s top assistants, a couple and their team of lawyers from New Orleans might have violated the federal criminal statutes on fraud, money laundering, conspiracy, and perjury. He also claimed that Juneau’s self-described general counsel Christine Reitano had attempted to secure a job for her husband and two staff lawyers.

Freeh advanced the hypothesis that Reitano had attempted to capitalize on her work and use Juneau’s name in order to win additional claims and administration assignments for her business. In addition, Freeh reported that most of Juneau’s key executives and senior lawyers were linked to practices that he had found to be unsuitable, illegal or not in conformity with the claims facility’s code of ethics. The degree and seriousness of the crimes ought to have led to criminal proceedings against the accused (Gliner, 23).

BP immediately tried to support the negatives in Freeh’s investigation report. The inspector seemed to concur with what BP had initially suspected. The company had accused its employees of fraud and unethical behavior. The company had suspected that its employees and their attorneys had been exaggerating the extent of the damage.

BP cautioned the court against awarding the victims their compensation claims to avert possible fraudulent demands in the future. Geoff Morell, a spokesman for the BP company based in London, suggested that the payments continue but on a different engagement. Barbier agreed with Geoff Morell’s suggestion.

Juneau confirmed that he had found the Freeh report to be in agreement with the work that his team of 2700 hard-working professionals had been doing. He considered the false claims of corruption by the two employees as an isolated situation that had already been dealt with through their dismissal. Freeh had found no evidence that the two employees had directly manipulated the valuation of the claims. He also suggested that the employees’ dismissal could not be related to any misconduct (Graf, 16).

The lawyers that represented the claimants seemed to be satisfied with Free’s report. They agreed that Patrick Juneau’s leadership throughout the court’s proceedings had been one of integrity, transparency, and objectivity. The plaintiff’s committee of lawyers that oversaw the spill litigation was led by Steve Herman and Jim Roy.

An analysis of the organizational behavior ethics that were violated by BP and its employees

This analysis does not easily identify the party or parties in charge of the business. BP, as an organization, does not seem to have a clear hierarchical structure stipulating concrete organizational channels. An organizational structure helps the employees to understand the chain of command hence avoiding miscommunication and confusion during their execution of duties (Landsburg, 18).

BP did not have a clear code of regulation. The organization did not have a mechanism in its structure of detecting that its employees had entered into bids and contracts with outside companies, agents, consultants, or any other third party. BP did not know that Juneau’s staff lawyers had violated the law by using his name to win further claims administration. Juneau’s staff lawyers should have instead exercised due diligence and agreement of the principal compliance and ethical standards.

BP did not promote corporate attitudes among its employees. Its employees became deceitful by making false compensation demands (Sullivan, 16). BP did not observe due diligence because a number of its senior employees employed their own relatives without considering their qualifications. BP’s contracts did not comply with ethical requirements that stipulated full compliance of companies with training standards (Wenz, 52).

BP did not inculcate a corporate culture among its employees. The company failed to motivate its employees to work without indulging in corrupt practices. The organization did not offer legal guidance to its employees on the most appropriate ways of claiming for damage compensation.

Conclusion

This study finds the verdict of judge Barbier to have been faulty. Barbier allowed false compensation claims by BP’s employees to continue. The federal court ought to have reviewed the entire situation and developed a solution that would have been agreeable with all parties. The court seemed to have favored the law offenders.

The research underscores many challenges that face the practicing and implementation of the code of conduct of employees. Every company must integrate planning skills, prepare and educate its employees on the code of conduct in order to prevent all moral or noncompliance issues that may arise from its workers. The paper observes the need to implement a practical and comprehensive program to prevent, detect and if necessary, enforce compliance issues that may arise (Yunker, 19).

Companies need to create an environment that can help in supporting compliance activities. They also need to formulate comprehensive communication mechanisms. Human resource departments within companies should enhance monitoring and evaluation structures to integrate conformity of employees to ethical regulations.

Works Cited

Gliner, Jeffrey. Research methods in applied settings, New York, USA: John Wiley & Sons, 2009. Print.

Graf, Mitche. Power Marketing, Selling, and Pricing: A business Guide for Wedding and Portrait Photographers, New York, USA: Amherst Media Inc., 2009. Print.

Landsburg, Steven. Fair Play: What Your Child Can Teach You About Economics, Values and the Meaning of Life, New York, USA: Free Press, 2010. Print.

Sullivan, Ronnie. Economics: Principles in Action, New Jersey, USA: Pearson Prentice Hall, 2011. Print.

Wenz, Peter. Take Back the Center: Progressive Taxation for a New Progressive Agenda, Massachusetts, USA: Massachusetts Institute of Technology, 2012. Print.

Yunker, James. Economic Justice: The Market Socialist Vision, United States of America: Rowman & Littlefield, Inc, 2010. Print.