big oil and business ethics
...illions of barrels of oil had been discovered at Prudhoe Bay on the North Slope, but the act gave them not a drop. Their people had roamed 88,000 square miles of Arctic Slope country for centuries, but the act gave them just a tenth of that land. "We wanted all of it," said Joe Upicksoun, an Inupiat Eskimo leader in the land-claims battle on the Slope. More than a quarter century later, the company they started, Arctic Slope Regional Corp., is the largest Alaska-owned company, with revenues in 1997 of $661 million. Arctic Slope's subsidiaries have multi-million dollar contracts doing oil field work for Arco Alaska Inc., BP Exploration (Alaska) Inc. and Alyeska Pipeline Service Co. The corporation has refineries and fuel distribution companies, a fabrication yard that makes giant oil processing facilities, a plastics plant and other businesses in the Lower 48. In the last year the corporation began laying the groundwork to enter the oil field services business in Venezuela and Russia. Not only was Arctic Slope denied ownership of the rich Prudhoe Bay oil fields, company managers found it difficult in the early years to get a significant share of the work there. "We weren't part of the good old boys that generally do business with the oil industry," Leavitt said. Arctic Slope Natives also have a right to an unspoiled environment. With big industrial equipment comes a pollution that this area has never seen. The Arctic has yet to produce profound evidence that industrial activity has had a negative affect on it, but it is naïve to think that a land as pristine as the Arctic Slope will be unaffected by large industrial activity. Tensions arose between the industry and the Inupiat people for several reasons. In those early years Arctic Slope Natives feared the industry would hurt the natural environment they depended on for food, Arctic Slope's President Jacob Adams said. Ben Nageak, the North Slope Borough mayor in 1998 believes that big oil is good for his people: “Our Elders were fearful that our culture would not survive if the land on which we subsisted was spoiled. They thought the caribou would leave and never come back. They thought the birds would nest somewhere else. They feared they would be the last people to practice the Inupiat subsistence way of life. They did not want their way of life to die. It's now more than 25 years later, and our worst fears were never realized. The oil industry made a concerted effort to cooperate with the Inupiat people in addressing their concerns. They listened to us. Together, we have refined practices and rules for safe development. Today, the oil industry is no longer seen as an adversary by the Inupiat people. It is now viewed as a partner. And our Inupiat culture is still alive and thriving.” The mayor of this borough does not misrepresent the views of his people. The Inupiat Eskimos of this region have all gotten extremely wealthy as a result of big oil companies. They have been able to have their own high school, and install safe water and sanitary sewage disposal systems. While the natives may squabble with companies such as BP, they do not want big oil to leave the Arctic. In fact, a majority even want the major companies to keep exploring on such controversial sites as the Arctic National Wildlife Reserve (ANWR). Because of their healthy, and mutually profitable relationships with the people of the Arctic region and around the state, companies such as BP are catered to by most of the citizens of the entire state. With the natives’ first-hand view of this issue, it can be argued that they are in a better position to judge the impact of the oil companies. However, their views can also be distorted by the amount of money flowing into their pockets. They criticize environmentalists who they believe don’t understand the situation because they are so far removed from the actual land. This brings us to the question of whether the natives of the North Slope really have an unbiased view of oil drilling in the Arctic. They believe that they were wronged because they only ended up with legal rights to a fraction of the land that they had inhabited for centuries. However, they are not upset about the oil exploration that occurred and is still going on, but they are upset that they don’t get all the royalties from the land use. They will not argue about how their cultural identity is fading away, or how industrial activity will impact the environment in their once pristine land. In their eyes, the benefits of having big oil companies drilling on their land far outweigh the costs to their culture and environment. Better education, improved housing and community infrastructure, greater life expectancy, and security against widespread hunger and many forms of once deadly diseases are some of the benefits Natives have received from their increased wealth. However, because of oil companies and the wealth that came with them, the Natives of this region face social and behavioral health problems that threaten the future existence of the unique cultures on which healthy lifestyles were once based. Alcohol abuse and violence running rampant in Alaska Native society have disheveled family and village life. Cultural values and morals that in the past provided clear instruction to tribal members and assured the social order of communities have been seriously eroded and, in some instances, virtually lost. However, the Natives don’t see a way around this cultural erosion, and if they blame oil companies then they don’t show it. Regardless of the Natives’ opinions, their rights are still being violated. The workers at the Alang ship-wrecking yards were happy for the work they had and the meager wages they were being paid, but a slew of their rights were being violated. A group of people, such as the Arctic slope natives can be in favor of activities and still have their rights (unspoiled environment) violated. Wildlife The right of habitat for the wildlife in the Arctic has been infringed upon to a degree by the oil companies. The problem with this argument is that the oil companies can offer proof that the wildlife in the area hasn’t really suffered by the loss of parts of its habitat. The Central Arctic Herd (caribou), which uses the area around Prudhoe Bay, has tripled in population since oil development started in the early 1970s. There are four major caribou herds in northern Alaska. Besides the Porcupine and Central Arctic herds, there is the Western Arctic Herd, which is more than twice the size of the Porcupine Herd, and the smaller Teshekpuk Lake herd. Populations of these herds rise and fall by natural cycles. Three decades of oil and gas activity in the central North Slope has had no apparent negative impacts. The U.S. Environmental Protection Agency (EPA) states, “The addition of new exploration, development, and production activities will increase human activity and the likelihood of polar bear sightings. We do not believe that the overall activity level will have a measurable impact on polar bears during the 3-year period (03/30/00 to 03/30/03) covered by these regulations.” Again, though there hasn’t been a lot of evidence concerning the negative impacts of industrial activity, but the activity can’t possibly be helpful to the wildlife of the Arctic. The Citizens of Alaska The citizens of Alaska are being coerced, in a way, by big oil companies to support the destruction of the environment on the Arctic Slope. BP/Amoco has taken care of the citizens of Alaska the same way it has taken care of the native peoples in the Arctic: with money. The oil industry is what keeps many Alaskans employed. Every Alaskan knows that oil is crucial to the economy of the state, whether they like it or not, and they aren’t about to give up the money from this industry. Alaskans demonstrated their support for the oil industry when the state’s delegation to last summer’s Democratic National Convention threatened to prevent a unanimous nomination unless Mr. Gore at least listened to their concerns about his opposition to oil production in the Arctic National Wildlife Refuge. Even though the state normally votes heavily Republican in national elections (all three congressmen are Republican), Democrat Tony Knowles was swept into a second consecutive term as governor on the strength of his pro-development, pro-business first-term record. In this case, the voters demonstrated that party affiliation is less important than a candidate’s support for Alaskan economic development. The residents of Alaska generally feel that the oil companies are not infringing on any rights of the average citizens of Alaska. These people can live without the oil companies, although probably not comfortably, and definitely not in Alaska. So they are generally happy to see the oil companies making money because that means the citizens are also making money. The companies have worked with Alaskans to get a favorable reputation in the state. They have funded a majority of the state government, which in turn provides roads, education, and protection. Alaskans feel that if they listen to their conscience and get rid of these companies, then they will lose their job and Alaska won’t have a way to support all the programs that the companies provided. The Business View I will take the side of the oil companies, specifically BP Amoco (since it is the largest oil company in Alaska) and express with my business background why they (the companies) think they are doing ethical business. Several studies mentioned throughout this paper have shown that the impact of development in the Arctic, specifically Prudhoe Bay, has not been shown to have an adverse effect on the wildlife, the people, or the environment. Early design and permit requirements of the North Slope facilities included such precautions as providing caribou crossing ramps over pipelines, avoiding sensitive habitats during construction of gravel roads and pads, and long-term monitoring of caribou, birds and other Arctic wildlife species. Exploration activities take place during the winter and use temporary roads made of ice, instead of permanent gravel roads, in order to avoid d...