Oil Spills: A Threat to Business As Usual

By Abdul Rahim Bin Abdullatif, Co-Founder of Eco Leadership.

US President Obama said in an interview that he would have sacked BP CEO Tony Hayward for his comments on television that the Gulf spill would be “very very modest” over 50 days ago. The explosion on the Transocean Deepwater Horizon drilling rig which killed 11 people resulted in the spewing of oil into the ocean is still at a rate of about 20 to 40 thousand barrels a day; until recently where BP announce that they have manage to collect 90% of the oil by installing a containment device. Latest figures show that at least 40 million gallons of crude oil has already poured into the Gulf, making the disaster almost four times the size of the Exxon Valdez spill in Alaska in 1989.

Hayward’s sardonic English tones and comments is typical of a business executive who have no clue the catastrophic  effects of such environmental disaster and how it can pose a major threat to its industry and its stakeholders. In uncanny coincidence just weeks before the BP spill, the Harvard Business Review ran a feature article highlighting that it is no longer possible for business leaders to ignore what economists call ‘externalities’ like pollution and growing tide of ‘green consumers’. The fact is, environmental and social injustice is no longer tolerated and it has the potential to make the business irrelevant in today’s climate changing world.

The estimated cost of the disaster is already in billions of dollars and counting. That is a very conservative figure which will escalate the longer it takes for BP to take control of the situation. Four states in the US have already been affected by the oil spill as it continues to gush out oil albeit, at a slower rate since the success of the latest containment efforts. Unfortunately, they are still working on 2 wells that will only be ready in August to completely stop the spillage while the daily count of the spewing the undersea leak caused plumes of oil to gather undersea.

Meanwhile, wildlife in the area continues to be adversely affected and for Florida, the tourism dollar that it depends on (especially in the summer months) is severely affected as oil damages its beautiful pristine coastline. Wildlife species which are already on the endangered list are being threatened further while rescue efforts are being mounted. Migratory birds are unable to make their seasonal voyages while other marine life is threaten with potentially irreversible damage.

Closer to home, about 2,500 tonnes of crude oil leaked from a gash when Malaysian registered tanker, MT Bunga Kelana 3 collided with MV Waily, a bulk carrier registered in St Vincent and the Grenadines. The tanker was said to be carrying nearly 62,000 tonnes of crude oil. The swift response from the authorities limited the damage though beaches along the East Coast were closed for a week to allow for cleaning operations in Singapore and the southern part of Malaysia.

Environmental groups worked with authorities to save wildlife that were affected by the spill while cleaning operations were underway. Volunteers came with their families to help during the weekend in Singapore as their favourite beaches along the East Coast were closed. The total cost of the spillage is still being estimated financial and environmentally although one suspects that it will be very modest compared to the catastrophic impact of the disaster in the Gulf of Mexico.

On 10 June, the Obama administration has issued a 72 hours deadline for BP to come up with an updated strategic plan to contain and recover the oil spill in the Gulf of Mexico. President Obama has also scheduled a meeting with BP Chairman on 16^th June to reiterate the seriousness of the disaster.

Both of the disasters have highlighted the fact that our over reliance on fossil fuel should be phased out. It is going to be more costly, more difficult and more risky to seek out fossil fuel to quench our thirst for energy consumption. Investments and subsidies into the infrastructures to support renewable energy usage hold the key to end astronomical cost(financially, environmentally and socially) of our quest for fossil fuel.

A solid, hard-earned corporate reputation for companies begin with an understanding how business risks are changing and how traditional defensive or dismissive responses to those risks are no longer adequate or appropriate. Stakeholders should be engaged rather than jeopardising financial goals by ignoring or overlooking risks associated with environmental and social responsibilities. Solid financial performance is more significantly bound to non-financial measures like their stewardship in the environmental and social arena.

Abdul Rahim Bin Abdullatif is the Co-Founder of Eco Leadership.  Utilising extensive experience gained in the security, training and entrepreneurial field, Rahim is now working with organisations to create more sustainable businesses and also certifies businesses in the Travel and Tourism industry as a Preferred Partner of Green Globe Inc. Contact him on Rahim@EcoLeadershipTraining.com

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