Ethics in the Oil and Gas Industry

Ethics in the Oil and Gas Industry INTRODUCTION This report looks at the importance of ethics in the oil and gas business and its potential impact on business risk and company share value. Ethics refers to the concept of what is right and wrong, and ethical behavior is generally considered behavior that is proper. Business ethics is a form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and organisations. They are the moral values that guide the way corporations or other businesses make decisions. ETHICS AND BUSINESS RISK There are many instances throughout corporate history of how companies have disregarded ethics or morals in the quest for wealth. This can increase business risk due to breaking the law, damaging their image and the effects of lawsuits and damages. Breaking the Law Bribery and corruption are widespread in the developing nations. Companies say that the only way to get things done is to pay the bribes. Although few companies publicly defend bribing officials in third world countries, many privately condone bribery on several grounds. First, there are strictly financial considerations. Bribes can prevent delays that might otherwise have serious financial implications. In a capitalistic environment, we need an even playing field, and if other businesses engage in bribery, then either we do or face being at a competitive disadvantage. Second, there are practical considerations owing to what appears to be the universal nature of bribery in third world countries. Often foreign government officials are so corrupt that it is virtually impossible to do business without playing by the unspoken rules. Thus, theres nothing morally wrong with participating in bribery. On November 4, 2010 the United States Department of Justice announced a series of settlements whereby seven firms were to pay criminal fines and civil disgorgement penalties amounting to a total of $236.5m, in a settlement in relation to the Foreign Corrupt Practices Act. Five of the firms were Royal Dutch Shell, Transocean Inc, Global SantaFe Corp, Pride International and Noble corporation (Thomson Reuters , 2010). This type of transgression if repeated has the potential to place the companies involved at serious risk. It is this acceptance of thats the way the system works that perpetuates and fuels the bribery culture. If all companies adopted a strong ethical position and refused to pay the bribes the corrupt system would fail. Some companies have taken steps to distance themselves from corruption. BP was the first oil company to support the Publish what you pay campaign, a campaign for greater transparency in oil companies dealings with foreign governments. StatoilHydro was the first major oil company to start disclosing ALL revenues and payments in the countries in which it operates. It has set out a clearly defined ethics code of conduct and is promoting this in the different countries it operates in (Statoil, 2008). Damage to Company Image In the 1990s Shell was involved in a highly damaging controversy in Nigeria. The Ogoni people of the Niger delta, a minority tribe, had seen their land decimated by years of drilling. Ken Saro-Wiwa helped form the Movement for the Survival of the Ogoni People, and began protesting. The army ordered a brutal crackdown and series of killings, beatings, and arrests took place. Saro-Wiwa was eventually framed for murder and executed. This event was met with widespread condemnation and the bad publicity surrounding it was extremely difficult for Shell. It is difficult to say if Shell were complicit in these events but they certainly could and should have stopped it or at the very least spoken out against it. Shell eventually distanced themselves from Nigeria in an attempt to regain credibility. Total has been in Burma since 1992 and is a supporter of the military regime. The country has an appalling human rights record. Aung San Suu Kyi, Burmas pro-democracy leader, has said that Total has become the main supporter of the Burmese military regime. She told the French weekly Le Nouvel Observateur that TOTAL knew what it was doing when it invested massively in Burma while others withdrew from the market for ethical reasons. She added, the company must accept the consequences. The country will not always be governed by dictators. (Burma Campaign UK , 2007) However unlike Shell this does not worry nor deter Total Unfortunately, the worlds oil and gas reserves are not necessarily located in democracies says Totals website. Lawsuits and Damages On April 20th 2010 the BP operated Macondo well blew out. The Transocean owned Deepwater Horizon drilling rig was destroyed with the loss of 11 lives. The well continued to leak oil into the Gulf of Mexico until it was finally killed on the 17th September 2010. Initial reports show that cost cutting, poor decision making and lack of honesty were important factors in the disaster. Both companies have suffered damage to their company image, reputation and financial well being. BP initially faced all the blame as this was politically convenient to the point that it suddenly became British Petroleum again after a gap of 20 years which clearly showed that the Obama administration was about as ethically sound as either Transocean or BP. BP safety record in the US is poor but much of this is down to the poor condition of assets it inherited during its mergers with Amoco and Arco. Due to its failure to live up to its ethical promises BP is viewed with mistrust bordering on outright hatred in the US whilst elsewhere ethical investors are shying away from it. Tony Hayward, the former group chief executive of BP, stated: Our reputation, and therefore our future as a business, depends on each of us, everywhere, every day, taking personal responsibility for the conduct of BPs business. Sadly even the chief executive failed to live up to his own statement. ETHICS AND SHARE VALUE The effects of this disaster on BP have been significant with BP as a corporate entity particular at risk. The effect of the Macondo disaster on BPs share price was initially catastrophic. As can been seen in Figure 1, the share price collapsed from 650p/share to 300p/share in a little over 2 months. Figure . BP Share Price April 2010 Feb 2011 chart_builder (Livecharts, 2011) BP has had to pay out an initial  £20 billion in clean-up costs and with civil lawsuits pending, the final pay-out is expected to severely impact on the strength of its business. After announcing that it had successfully capped the Macondo well however BP shares rose 8% (Gray, 2010). This proves that investors with equally as little regard to ethics are buying in at the bottom of the market in the hope of making a profit. There have been other cases where poor ethical behaviour has led to significant declines in share price. In January 2004 Royal Dutch Shell announced that it was downgrading nearly 4 billion barrels of proven reserves to the probable category. As a result Shells share price fell by 7%. An internal report by US law firm Davis, Polk and Wardwell, (Moore, 2004) detailed a damaging series of e-mails showing that top managers at the company had known about the inflated reserves for years and had been arguing about whether and how to lie to investors. Conclusion Which means of ethical behaviour a company adopts has been open to much debate. There are some business leaders who think as Milton Friedman did that their duty is, to make as much money as possible while conforming to the basic rules of the society. Others such as Statoil wish to conduct their business to the highest ethical standards possible. Companies have set up Corporate Social Responsibility policies. These policies clearly state the companies ethical and social stand point. The main problem with this is when individuals fail to live up to the statements Unethical business practices will continue to be seen in the oil and gas sector as some companies continue to think that the lack of ethics will have no impact. In many ways they are correct. Shell and Total do not seem to be struggling despite poor ethical records. From a sales point of view ethics, or the lack of them, have little impact. Due to the very nature of the product the ethical stance of the end user will be weaker. When we buy petrol we dont know where it came from or who suffered as a consequence and so companies are protected. The world is reliant on oil and will therefore look the other way as long as it keeps flowing. If these practices continue it may lead to government intervention and regulations that are more financially costly for companies to adhere to. Even more important than governmental intervention, is trust. Companies lacking trust by employees, business partners, and customers will suffer financially in the long-term. Trust, based on ethical reputations, may become even more important in the future (Richardson, 2002/2003). We live in an age where the general public are more attuned to, and aware of, ethical concerns and will base their investment strategies on these principles. In the computer age information is more easily accessed and campaigns against companies can be organised worldwide in days. Companies basing their corporate strategies on strong ethical principles may not show so much short term gain however their long term security will be assured.

Disengagement Theory Essay

This is when a person, usually an older person, withdraws from involvement or when someone’s relationships with other people slowly cut off or change. Older people may withdraw from involvement when they feel they are limited to try and interact with other people. It has been proved that a lot of older people were more involved with life when they were younger however some people disagree and feel there are a large number of people who do not withdraw from society. For example when they retire they may lose contact with a lot of their colleagues or if they or their friends/family have impairments such as hearing or visual impairments it could make it more difficult to interact with each other. Technology may also restrict older people as they may not have internet or phones to be able to interact with their friends and family. Activity Theory This theory highlights the importance of on-going social activity and believes older people should be encouraged to stay involved whilst suggesting that people will be more satisfied with their lives if they remain active as well as ensuring friendships and relationships are intact by interacting with others just the same. It also suggests that someone who remains an active member of society will increase their health and wellbeing and that own-age friendships should be developed. The only criticism of this theory is that some people are more than happy as they are and want to live alone not to mention the fact that not everyone is able to be as active as they would like. As you can see, these theories are completely different in comparison to one and other. One suggests as you get older you will withdraw from society and become unhappy whereas the other suggests you can stay happy and active if you want to and that you just need to remain in contact with different roles in society. If you follow the disengagement theory you are more likely to end up unhappy or lonely as your mental and even physical health may go on to deteriorate through lack of activity or interaction with the outside world and friends or family. On the other hand the activity theory promotes  positivity by encouraging the elderly to communicate and interact with others no matter what their situation. This theory suggests that the more active you are in society, the less chance you have of developing mental health problems such as dementia and that there is a higher chance of prolonging your life and staying healthy. This is because the more you interact with people, the less tim e you will have on your own feeling lonely or depressed as your mind will be busy with positive and happy thoughts instead. There are many different factors that influence ageing and each factor may have a different effect on how the person may age. The main factors would be the personal level of exercise and nutrition in life, health care and education accessibility as well as job roles and finances. Exercise and nutrition, especially from an early age can have a huge impact on how you age later on in life. It is known that premature ageing is caused by a poor diet and little exercise as this causes cell destruction and increases the risk of obesity, diabetes and cancer. A healthy lifestyle can help lower the chances of many illnesses and diseases as well as improving your psychological health, for example the healthier and active you are the more friends and activities you are likely to have to keep you happy and in touch with the world. Health care and education accessibility may also influence the way you age as poorer health care and education facilities may lead to poor health and stress which can affect the way you age and even cause premature ageing Similarly with job roles and finances a higher job role and income can mean a better life with better nutrition, exercise, health care and education helping to lead a more pleasurable life and cause slower ageing. Social isolat ion and bereavement can also take its toll on ageing as the upset and strain can lead you to age a lot quicker and look a lot older than you are due to the body and mind shutting down to try to relieve the stress. The main role for all health and social care workers is to treat and care for individuals whilst respecting their independence and wellbeing whether they are old, young, male, female, disabled etc. Every individual should have the same rights and independence whilst taking into consideration that not everyone will have the same needs and some may need more attention or care than others. Although freedom is important to the individual the health and social care worker must be aware of the extent of the independence to be given to the individual ensuring they are protected against any potential risks or dangers. Independence can be promoted in several different ways, such as: Respecting personal rights and privacy. Giving the individual freedom of choice (where possible). Allowing the individual to carry out actions for their selves, for example letting them wash themselves (where possible). Addressing the individual appropriately and by their preferred name. Using initiative to care for the individual to show genuine care and trust. Involving the individual and their family when making changes to care plans etc. It is important for health and social care workers to address the individual properly as it gives the individual a sense of comfort and trust that the staff will care and respect them. Thinking outside of the box and using initiative when working with the individual will make them feel at ease that you are not just at work to work but at work to care for them as an individual instead of a patient. A great bond and trust between staff and patients is vital. Involving the individual and family with care plans, meal plans and other changes will make them feel valued and that they are in the best hands as it can sometimes be upsetting to both the individual and family when someone they love is reliant on others to care for them. They can feel upset that they are no longer capable of looking after themselves and so the care from the staff can really make a difference. The patients’ freedom of choice is also very important as if the patient was constantly told what to they were to d o without any say they could end up upset or depressed and may even question their existence and feel worthless. Some  choices may not always be appropriate or possible so this means the staff must be trained and taught how to overcome these situations especially against patients that may prove a little difficult. Health and social care workers must work together to give all patients the best care possible. This means regular meetings with different levels of staff in the hierarchy so every staff member is kept in the loop to ensure patients feel valued and cared for, especially those with no family or friends. Regular training sessions may also be required so that the staff is updated regularly on how to approach certain situations with others sharing their experience and knowledge to everyone in the group.

Vital Pieces of Ielts General Essay Writing Samples Band 9

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Essay on Psychotic Disorders

â€Å"A New Kind of Delusion† discusses an exploration by psychiatrist Joel Gold and philosopher Ian Gold. The brothers have been studying a growing mental illness in which a person believes they are, unknowingly, the star of a reality television show. As this sounds somewhat like the protagonist’s actual fate in the 1998 film â€Å"The Truman Show,† the brothers have coined the condition the ‘Truman Show delusion’. Gold and Gold deem this to be a culturally based display of psychotic thinking. The brothers hypothesise that certain aspects of modern culture could be driving this drift of the Truman Delusion. They suggest that extensive video surveillance in some cities, for example, could create a plausible reason for people to believe people are watching them. Gold and Gold are also particularly fascinated by the idea that such elements of culture may be affecting people with no apparent mental illness. Critics say the occurrence is old wine in new bottles as it contains similar features as other psychotic delusions. Psychiatrist David Downing mentions, as an example, that delusional people during World War II believed that the Germans were spying on them. However, the Gold brothers maintain that certain aspects of the Truman Show delusion are original, such as the fact that it extends to everyone in the sufferer’s life rather than to only a specific group, and its potential to affect otherwise mentally healthy people. Joel Gold claims that more attention needs to be paid to a patient’s culture and background, when diagnosing and treating them. Reaction â€Å"A New Kind of Delusion† is a fascinating read. The article provides enough information to give the reader an insight into the subject, but is interesting enough to encourage them to research it further. The Golds say that they are not claiming a delusion about being watched is a new mental illness, but simply that the Truman Show delusion shows that culture has a significant influence on psychosis. Downing’s point, that psychosis has always been influenced by culture, such as during World War II and the Cold War, is valid. When viewed from this angle, it does appear that the Truman Show delusion is merely another variety of the same illness, and that the cultural influence aspect is something that medical professionals have been aware of for a long time. However, as the Golds argue, it seems that this particular delusion is more extensive than any previous examples. On reading the article, one of the things to strike me was how potentially difficult the Truman Show delusion could be to diagnose. If a patient believes that everyone in his life is part of the TV show, then this would include his psychiatrist. Therefore, it is possible that the patient wouldn’t tell the truth, as he would feel that the psychiatrist was also party to the conspiracy against him. Although delusions about being watched are not new to the field of abnormal psychology, the Truman Show delusion does appear to contribute as it is far more broad than other examples. Furthermore, the notion that this delusion could draw in an otherwise healthy individual is much more unique and, if this is true, much attention needs to be given to it. As discussed, World War II is known to have influenced people’s delusions at the time. However, the war was a huge event that took over millions of people’s everyday lives, whereas â€Å"The Truman Show† was just a film. The two cultural events are on completely different scales, and the fact that a film can have as big, if not bigger, an impact than a world war is ground-breaking.