LP 3 Assignment Case Analysis Sustainability in the Gas and Oil Industry

Business Ethics

Managing ethical risks in the oil and gas industry is important to the economy that
businesses provide safe and healthy working conditions, therefore, the ethics process is
based on the core values of respect, responsibility and exemplary behavior and covers a
number of focus areas.
Failure to uphold human rights, non-compliance with competition law or
tolerance of corruption can damage a companys reputation, undermine investor
confidence and adversely impact relationships with stakeholders.
Some of the risks that BP, Exxon, and the fracking industry continue to face in
providing an adequate supply of energy are leaks, spills, and explosions. These hazards
continue to make headlines and demonstrate the risks of hydraulic fracturing. Most
ompanies are failing to provide enough evidence to assure shareholders and the public
regarding steps being taken to protect communities and the environment from the adverse
impacts of hydraulic fracturing.
The oil and gas industrys hydraulic fracturing operations are under intense
scrutiny for potential harm to neighboring communities and the environment -- from air
and water pollution to increased noise, traffic, and crime.

If companies are not tracking

these potential problems, it is difficult to demonstrate to investors, regulators, or the

public that the problems are being avoided or resolved. Because they are not reporting,
investors have no way of knowing and crediting those companies making meaningful
efforts to adopt best practices and mitigate their impacts on communities and the
environment.

LP 3 Assignment Case Analysis Sustainability in the Gas and Oil Industry

Business Ethics

The industry is linked to health, environment, and safety performance; use of

pipelines to transport water in lieu of diesel trucks to lower air emissions; and company
policies on use of non-potable water for hydraulic fracturing. Some reports note that
companies are least transparent on their process for systematically identifying and
addressing operational impacts on local communities, even though unaddressed
community concerns are among the leading drivers of bans and moratoria.
By establishing ethical leadership the oil and gas industry, a company can better
manage the risks. Establishing controls to prevent future risk they will be able to
identify the flaws in the safety control structure that allowed the accidents to occur and
what can be done to strengthen the overall offshore oil and gas industry safety control
structure. The general key to preventing such occurrences in the future is to provide
better information for decision making, not just for the government regulators but for
those operating the oil rigs. There are many changes that would be useful in
strengthening the safety control structure and preventing future oil spills. Some of the
things a company could do is to provide incentives to change the safety culture, increase
the industry standards, industry self-policing, safety management teams, integration of
safety engineers into operational decision making, certification and training of all staff,
learning from the events, complete an hazard analysis, maintenance, third party
certification and change of management.
In simple terms, people look for evidence that supports the goal they are trying to
achieve. So when making a safety case, focus is on evidence that supports that goal and
the safety of the system. A compliance-oriented culture can be created where safety

LP 3 Assignment Case Analysis Sustainability in the Gas and Oil Industry

Business Ethics

efforts focus on proving the system is safe rather than designing it to be safe. Safety must
be designed into a system from the beginning, it cannot be argued in after the fact