Ethical Considerations in the Oil Industry
Oil is one of the most valuable resources on earth. Most economies have been built using oil products. In the Middle East and some countries that are endowed with the resource, improvements on their welfare have been registered (Mill, 2009). Crude oil is processed into a variety of products that include petrol, gas, chemicals and other associated products. There is no doubt the industry has created wealth as many people are employed along the chains of oil industry. Therefore, oil is an important resource.
The oil industry attracts wealthy and influential corporations and multinationals (Harris, 2010). This is owing to the revenues associated with the business. Since oil is a good demanded by virtually every human being, the demand for the product has always been steady. In the past, oil industry has been associated with activities that compromise the moral principles of the society. The manner of execution of their operations, the way they have handled matters of safety, and their pricing strategies have associated the industry with the most unethical corporations and sectors all across the globe. In this paper, a discussion is made on the unethical activities and operations of the oil industry players.
The main business in the oil industry is the mining of crude oil, and processing or refining it into numerous products for marketing and sale. The mining and refining of crude oil causes emission of carbon gases. When substantial amounts of carbon are released into the atmosphere, they clump together to form a layer that was called Ozone Layer (Mill, 2009). The continued emission of carbon gases onto the earth has led to climate change. This scenario promises disastrous effects to human and other lives. Carbon gases have direct harmful effects on the health of victims. Deaths and ailments of the liver, lungs and cancer have been reported. Peasant citizens are forced to dedicate a substantial amount of their resources and time to fight the effects of such emissions. The multinationals that carry out the business have done little to offer reasonable assistance to victims of carbon emissions.
Besides carbon emissions, oil-refining corporations have portrayed negligence in their operations. Provisions for the safety of their employees and other stakeholders have been ignored. The reason for this was the adoption of a cutting cost approach. Inadequate and inappropriate designs are the order of the day. In 2005, there was an explosion from a BP plant at Alaska that led to the loss of lives of 15 people (Harris, 2010). The incident has largely been blamed on the corporation’s failure to adopt efficient designs that are leak-proof. The corporation concentrates on reduction of its costs rather than striking a balance between safety and optimal operations. Their failure to put in place measures for safety leads many to question the morality of their operations.
In 2010, BP was accused of failing to prevent a leak of huge barrels of oil into the Gulf of Mexico (Mill, 2009). The reasons border on reducing costs. Substandard work that compromises the safety of lives because of costs is unacceptable. The magnitude of the loss caused by such an act of negligence is unimaginable. In the aftermath of the disaster, the corporation dedicated huge amounts of resources in time and money to protect their image. This implies an attempt to conceal facts from the public in order to safeguard their profit margins.
The pricing strategies and policies have always been surrounded by controversy. Oil is a special good (Harris, 2010). Its availability, processing and use dictate the nature of the good. Due to those factors, the multinational corporations have taken advantage of the state to employ unclear and unfair tactics to manipulate oil product prices. The prices are always on an upward trend. Such efforts have led to unwarranted suffering amongst innocent citizens. Oil industries have also been drawn into political and social conflicts. In the 1960s, oil was discovered in the Niger Delta. Through unaccountable and corrupt procedures, the then Nigerian Government gave a license to Chevron to mine the resource. The natives whose land oil was discovered were ordered to vacate without any due regard and respect to their rights. On one occasion, the landowners engaged the corporation on a fair process for compensation. Instead of encouraging reconciliation and participation, the corporation used a military squad to administer terror and violence on innocent natives for the objective of exploiting resources from their lands.
The above scenarios represent some of the unethical practices by oil industry corporations. They are interested in maximizing their return without any regard for protection of the environment, lives and rights of all stakeholders. Some corporations have had associations with criminal and terrorism groups or gangs (Mill, 2009). Such raises concerns on their objectives in business and respect for human life and the rule of law. In the following chapter, a discussion on the positive ethical undertakings of corporations in the oil industry is presented.
As mentioned above, oil is a valuable resource. Its exploitation and subsequent processing into various useful products is of great economic benefits to the country and its citizens. Thousands of jobs are created from the oil industry (Harris, 2010). The government gets revenue in the form of taxes from the corporations. The income is then used to fund other important sectors of the economy. Governments provide security, education, healthcare and other goods and services to its citizens. Funds for such activities cannot be obtained where no economic activities like oil refining are undertaken. Therefore, the creation of employment opportunities, tax to the state, and taking part in activities or affairs that promote the welfare of others, presents a noble exercise and thereby is ethical.
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The business of oil exploration and processing is an important economic activity. For human life to improve, economic activities must be encouraged since they create wealth. Operations of processing the oil into final products and all the associated activities around the product cause harmful and dangerous effects to humanity and other lives. Life being holy must be protected at all costs. The environment gives life, hence, it should be conserved. Other lives such as aquatic life, and other terrestrial life should also be protected.
The government should be on the forefront to ensure protection of lives, and overall environmental conservation. Governments also have a role in enhancing the welfare of citizens. This is achievable through legislation and formulation of polices that balance activities of corporations and safety of life. Fairness and firmness in the legal implementation of the regulations must prevail. The regulations should ensure that economic activities are allowed to take place at the same time guaranteeing the safety of the people and protection of the environment. Governmental bodies should monitor other unethical activities of oil corporations such as unfair prices. The aim is to ensure that innocent citizens who lack information are protected against unfair prices. When such measures are implemented, all stakeholders would benefit. Economic prosperity would also be achieved without compromising the environment, health and safety of citizens.
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