A Report On MANAGEMENT IN THE WIDER ENVIRONMENT
HE W IDER IDER ENVIRONMENT IMPLICATION AND HOW T HE EFFECTS WORKS ON BRITISH PETROLEUM (BP)
Submitted To: Mr. C. Coker Course Instructor Advanced Professional Diploma in Management Studies City of London College
Submitted By: Md. Keiser Hossain (BEN) Roll – 00205970 January 2009 Advanced Professional Diploma in Management Studies City of London College
Date of Submission: 5th June 2009
Table of Contents
Focus
Page No
Introduction- History of Petroleum
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Task One
Organizational Profile of British Petroleum The Mission Statement of British Petroleum Philosophy of British Petroleum Goals and Objectives of BP Profile of the Stakeholders Company’s Past and Current Strategy
05-08 05 06 06 06-07 07 08
Internal and External Environment of BP Working Environment of BP
09-12 09-11 12
Task Two
Task Three
Regulatory Forces Affecting BP at National, EU & Global Levels Effects of Globalization Corporate Social Responsibility Environmental Responsibility and Accountability References
13-17 13-14
14-15 15-16 17 18
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I NTRODUCTION - H ISTORY OF P ETROLEUM
Petroleum, in one form or another, is not a recent discovery. More than four thousand years ago, according to Herodotus and confirmed by Diodorus Siculus, asphalt was employed in the construction of the walls and towers of Babylon; there were oil pits near Ardericca (near Babylon), and a pitch spring on Zacynthus. Great quantities of it were found on the banks of the river Issus, one of the tributaries of the Euphrates. Ancient Persian tablets indicate the medicinal and lighting uses of petroleum in the upper levels of their society. Oil was exploited in the Roman province of Dacia, now in Romania, where it was called picula. The earliest known oil wells were drilled in China in 347 CE or earlier. They had depths of up to about 800 feet (240 m) and were drilled using bits attached to bamboo poles. The oil was burned to evaporate brine and produce salt. By the 10 th century, extensive bamboo pipelines connected oil wells with salt springs. The ancient records of China and Japan are said to contain many allusions to the use of natural gas for lighting and heating. Petroleum was known as burning water in Japan in the 7th century. In his book Dream Pool Essays written in 1088, the polymathic scientist and statesman Shen Kuo of the Song Dynasty coined the word 石 油 (Shíyóu, literally "rock oil") for petroleum, which remains the term used in contemporary Chinese. The first streets of Baghdad were paved with tar , derived from petroleum that became accessible from natural fields in the region. In the 9th century, oil fields were exploited in the area around modern Baku, Azerbaijan, to produce naphtha. These fields were described by the Arab geographer Abu al-Hasan 'Alī al-Mas'ūdī in the 10th century, and by Marco Polo in the 13th century, who described the output of those wells as hundreds of shiploads. Petroleum was distilled by the Persian alchemist Muhammad ibn Zakarīya Rāzi (Rhazes) in the 9th century, producing chemicals such as kerosene in the alembic (al-ambiq), and which was mainly used for kerosene lamps. Arab and Persian chemists also distilled crude oil in order to produce flammable products for military purposes. Through Islamic Spain, distillation became available in Western Europe by the 12th century. It has also been present in Romania since the 13th century, being recorded as păcură. The earliest mention of petroleum in the Americas occurs in Sir Walter Raleigh' s account of the Trinidad Pitch Lake in 1595; whilst thirty-seven years later, the account of a visit of a Franciscan, Joseph de la Roche d'Allion, to the oil springs of New York was published in Sagard's Histoire du Canada. A Russian traveller, Peter Kalm, in his work on America published in 1748 showed on a map the oil springs of Pennsylvania. In 1710 or 1711 (sources vary) the Russian-born Swiss physician and Greek teacher Eyrini d’Eyrinis (also spelled as Eirini d'Eirinis) discovered asphaltum at Val-deTravers, ( Neuchâtel). He established a bitumen mine de la Presta there in 1719 that operated until 1986. 3
Oil sands were mined from 1745 in Merkwiller-Pechelbronn, Alsace under the direction of Louis Pierre Ancillon de la Sablonnière, by special appointment of Louis XV . The Pechelbronn oil field was active until 1970, and was the birth place of companies like Antar and Schlumberger . The first modern refinery was built there in 1857. The modern history of petroleum began in 1846 with the discovery of the process of refining kerosene from coal by Nova Scotian Abraham Pineo Gesner . Ignacy Łukasiewicz improved Gesner's method to develop a means of refining kerosene from the more readily available "rock oil" ("petr-oleum") seeps in 1852 and the first rock oil mine was built in Bóbrka, near Krosno in Galicia( Poland /Ukraine) in the following year. In 1854, Benjamin Silliman, a science professor at Yale University in New Haven, was the first to fractionate petroleum by distillation. These discoveries rapidly spread around the world, and Meerzoeff built the first Russian refinery in the mature oil fields at Baku in 1861. At that time Baku produced about 90% of the world's oil. The first commercial oil well in Romania was drilled in 1857, and the world's first oil refinery opened at Ploiesti, Romania being the first country in the world with a crude oil output officially recorded in international statistics, namely 275 tonnes. The first oil well in North America was in Oil Springs, Ontario, Canada in 1858, dug by James Miller Williams. The US petroleum industry began with Edwin Drake's drilling of a 69-foot (21 m) oil well in 1859, on Oil Creek near Titusville, Pennsylvania, for the Seneca Oil Company (originally yielding 25 barrels per day (4.0 m³/d), by the end of the year output was at the rate of 15 barrels per day (2.4 m³/d)). See also the Pennsylvanian oil rush The industry grew through the 1800s, driven by the demand for kerosene and oil lamps. It became a major national concern in the early part of the 20th century; the introduction of the internal combustion engine provided a demand that has largely sustained the industry to this day. Early "local" finds like those in Pennsylvania and Ontario were quickly outpaced by demand, leading to "oil booms" in Texas, Oklahoma, and California.
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T ASK O NE Organizational Profile of British Petroleum BP is one of the world's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items Bp’s history is full of discoveries, starting in 1908 with oil found in a rugged part of Persia after a long and difficult search. Since then, discoveries large and small (and sometimes just in the nick of time) have fuelled our progress. In the story, you may make a few discoveries of your own. Winston Churchill gives a rousing speech. The Smurfs cause a traffic jam. Our employees help construct a giant spool, build the world’s largest deepwater pipeline and bring solar power to remote villages in the Philippines. To find oil in Persia, George Reynolds and his caravan of explorers had lived through seven years of harsh heat, gastric illnesses and disappointments. The next seven years would be no less difficult for the Anglo-Persian Oil Company, which would one day become BP. The company was incorporated in 1909 in England and Wales and changed its name to BP p.l.c. in 2001. BP is one of the world’s leading oil companies on the basis of market capitalization and proved reserves. Our worldwide headquarters is located at 1 St James’s Square, London SW1Y 4PD, UK BP is a global group, with interests and activities held or operated through subsidiaries, jointly controlled entities or associates established in, and subject to the laws and regulations of, many different jurisdictions. These interests and activities covered two business segments in 2008: Exploration and Production and Refining and Marketing. With effect from 1 January 2008, the former Gas, Power and Renewable segment ceased to report separately A separate business, Alternative Energy, reported in other businesses and corporate, handles BP’s low-carbon businesses and future growth options outside oil and gas. Exploration and Production’s activities include oil and natural gas exploration, development and production (upstream activities), together with related pipeline, transportation and processing activities (midstream activities), as well as the marketing and trading of natural gas (including LNG), power and natural gas liquids (NGLs). The activities of Refining and Marketing include the refining, manufacturing, supply and trading, marketing and transportation of crude oil, petroleum and petrochemicals products and related services. All these activities are supported by a number of other organizational elements comprising group functions and regions. Group functions serve the business segments, aiming to achieve coherence across the group, manage risks effectively and achieve economies of scale. In addition, each regional head provides the 5
required integration and co-ordination of group activities and represents BP to external parties.
The Mission Statement of British Petroleum In all activities of BP seek to display some unchanging, fundamental qualities – integrity, honest dealing, treating everyone with respect and dignity, striving for mutual advantage and contributing to human progress. To translate these into guides for practical action, we build on them in our group values. By bringing together intentions previously articulated in a number of different policy statements, these make it clear that the group aims: • •
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To improve, and to be accessible, inclusive and diverse. To engage the creative talents of our employees, and develop and apply leading, cost-effective technology and intellectual creativity to enhance innovation and new ideas. To carry on its business in an environmentally responsible manner, and develop cleaner energy and renewable energy sources. The group is committed to the responsible treatment of the planet’s resources and to the development of sources of lower-carbon energy.
For clarity, BP expresses the group values under four headings: performance; people and capability; health, safety and environment; and external relationships.
Philosophy of British Petroleum A study of BP annual reviews past and present suggests a shift is under way. This is what BP's values used to be: "Green - demonstrating environmental leadership. United around a vision of environmental leadership and recognition that the challenge to develop cleaner energy must be met, we are committed to the proactive and responsible treatment of our planet's natural resources and to the development of sources of lower carbon energy." This is what they are now: "Responsible. BP is committed to the safety and development of our people and the communities and societies in which we operate. BP aim for no accidents, no harm to people and no damage to the environment." In other words, no mention of green, environmental leadership and the development of cleaner energy. Even the word "environment" is included almost as a passing thought.
Goals and Objectives of At the core of BP is an unshakeable commitment to human progress. Our products and services are creating the freedom to move, to be warm, to be cool, to see and enjoy a better quality of life. We believe this freedom is inseparable from the responsibility to produce and consume our products in ways that respect both 6
human rights and natural environments. Confronting this paradox is our mission, but we cannot do it alone. Where others see contradiction and conflict, we see opportunities for mutual progress. It will be the magnet for people who want to change the world with new ideas, delivering a performance standard that challenges the world's best companies. And will enable customers, governments, communities and own people to participate in a new constructive dialogue. We aim for a radical openness - a new approach from a new company: transparent, questioning, flexible, restless and inclusive. The IDC and associated events aim to build awareness and understanding of safe driving techniques and behaviours which all can adopt in their driving-related activities. The event also provides an opportunity for drivers, other participants, line leadership and functional specialists to better understand the challenges being faced and good practices being employed by the driving workforce from around BP, and to use the knowledge gained to share best practices and help shape future driving safety needs. To be a participant at the world finals or, at a regional event, is seen by drivers as recognising and rewarding their driving safety skills and behaviours. Events are typically held at well regarded venues and competitors' partners are invited to attend. Time will be spent actively involved in competition and there is also time to socialise, take in the local culture and to celebrate together with the winning drivers. IDC events have become a valuable community relations showcase for BP. For instance the media is present, national and local government officials have been involved in past events and this will be continued into the future. BP businesses also utilise the opportunity to invite customers along. And local staff and their families are encouraged to attend during the competition.
Profile of the Stakeholders BP has different stakeholders which is very important to the company. BP lists its stakeholders as employees, customers, suppliers, community members, environmental groups, activists, shareholders. BP serves millions of customers every day, providing fuel for mobility, energy for light and heat, and petrochemicals, BP have some 110,000 employees working in more than 100 countries. BP plays an important role in the life of local community members. Environmental groups and activist are one the major threat to BP Company. Starbucks shareholders play a very important role in the day to day functioning of the company. They are represented by a group called “no accidents, no harm to people, and no damage to the environment”. They are concerned about the financial and legal implications of genetically engineered oil, not to mention the company's reputation.
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Company’s Past and Current Strategy BP remains focused on process safety and asset reliability. We have begun the implementation of our Operating Management System, which covers everything from employee competencies to risk assessment, and we’re already seeing the benefits. BP is building capability with extensive training programmes such as the Operations Academy developed in partnership with MIT. BP started up nine major projects and made good progress on controlling costs. We also delivered our 15th consecutive year of reported reserves replacement of more than 100 per cent, and resource replacement of more than 200 per cent, a performance that puts us among the best in the industry. And BP have begun to reduce the complexity and cost base of BP – by the end of 2008, BP had reduced our corporate overhead by around 3000 people, and are on track to exceed original target of 5000 by the middle of 2009. BP has also eliminated nearly 20 per cent of the senior positions. BP is intent on establishing a track record that is the very best in the industry. 2008 has also seen build operational momentum across the group. In E&P, BP successfully grew production in line with guidance, the only one of the majors to do so. Underlying production, excluding the effects of high oil prices on BP entitlements under production-sharing contracts, was 5 per cent. BP ‘s goal is to maintain this momentum in what will be a challenging environment. And it’s that environment like to turn to next. BP is also seeing the first signs of financial momentum. Significantly, 2008 results showed the greatest increase among the peers. All in all, BP made progress in 2008 and expect to see further financial benefits as BP move into 2009. As we all know, in 2008 oil prices were extremely volatile. They fell from a peak of $144 per barrel in early July to as low as $34 per barrel in December. The average for the year was $97 per barrel. In the short term, prices will be determined by a balance between OPEC cuts and the state of the global economy and demand for oil. On the demand side, global oil consumption is likely to decline for a second consecutive year in 2009, probably by more than 1 million barrels per day – the largest amount since 1982. BP therefore do not expect a quick recovery and it would be wise to prepare for continued volatility, which may extend into 2010. Despite today's pessimism, the future has not been cancelled – merely delayed. Once economic growth recovers, BP expects oil demand and gas prices to recover as well. Countries outside the OECD contributed more than half of total global GDP growth in 2008 and will continue to do so in the future. As growth resumes, they will need more energy, including oil, to continue their rapid industrialization. In such a challenging environment, BP’s commitment to 8
technology is more important than ever. Technology plays a critical role in addressing the world’s energy challenges, from fundamental research through to wide-scale deployment. T ASK T WO
Internal and External Environment of BP BP operates in more than 90 countries worldwide. In each of these areas, BP has, or is developing, processes designed to ensure compliance with applicable regulations. In addition, each employee is required to comply with BP health, safety and environmental policies as embedded in the BP code of conduct. Our partners, suppliers and contractors are also encouraged to adopt them. This Environment section focuses primarily on the US and the EU, where around 61% of fixed assets are located, and on issues of a global nature such as operations and the environment, climate change programmes and maritime oil spills regulations. Internal Environment- BP as an individual group has following internal attributes in terms of internal environment. •
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Company Culture: The Company strives to be opening minded and flexible in their work. A forward-thinking culture creates a well-managed and contemporary organisation that is always seeking to improve. Company image: As a world renowned company BP has good image as the name. Any top people would like to join the company as of the image and due to that company in a situation where they can recruit the best people. Organisational structure: The company structure from the CEO (Chief Executive Officer) to the bottom level has been formulated with talented and experienced people from all over the world. Key staff : Top, talented, experienced people have been recruited from all over the world in order to make sure that the business stability and ongoing training programmes are in progress. Access to natural resources: As the nature of the business such as air and sea operations are utilising the natural resources at its best. Position on the experience curve: Being number one in the industry as well as being in the field over 100 years sense that the company is in the top level in the experience curve. Operational efficiency : BP believes that efficiency gives confidence that BP will continue to deliver profitable growth hence it runs its maximum efficiency with its new technologies. Brand awareness: BP considers that the most valuable asset of the company is brand. It helps open doors, it attracts talented people, it differentiates us and it is a reassurance of trust in our technical capability. Market share: Being number one confirms that the company has the biggest portion in the share pie. Financial resources: The world largest organisations and the financial organisations have merged with the company and the company has issued shares to access the world’s largest financial resources. Exclusive contracts: In order to make sure that the supply chain is managed properly some contracts has been signed where the supplier only supply for the company.
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Patents and trade secrets : The Company holds number of patents for the inventions that they have done which only the company gets authority to supply for the market.
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Micro Environment
Customers: Meeting the needs, wants and providing the benefits to customers will result of surviving an organisation. And in the event of failure of do so will be end up with failed business strategy. BP apply their expertise in technical innovation to their products and services for the benefit of the customers, in order to bring them new market opportunities, good value and high quality products which are reliable and safe. Also they emphasise that they communicate honestly and openly with the customers, seeking a full understanding of their requirements and meeting company commitments to them. We respect the confidentiality of information from our customers to which we have access. As the organisations like Rolls Royce have loyal top class customers it is an asset for the company and a threat if they seek for some other supplier or brand as they spend lot of money for the brand name.
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Employees: Over some 110,000 employees working in more than 100 countries. To make sure the every employee has thorough knowledge on the products and the procedures, overall trainings will be given based on given time lines as well as based on the job role. The company demonstrate its capability by enhancing the recruitment of excellence, talented and experienced people. Competitors: As the company operates in different sectors such as aero, naval and civil, there are competitors for every sector. Also being number one itself enclosed business to the competitor’s targets.
Media: As a renowned organisation advertising is the most important activity in most of the time to attract the new customers as well as to retain the existing customers. Audio and video advertising across the country is taking place to promote the special inventions and the products or services.
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Shareholders: A large scale of share holders across the world investing on the business as the company has the best recognition among the world. Also the joint ventures with Marks n Spencer and other main organisations help recognition of the company and the stability of organisation.
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Suppliers: World renowned fair-trade suppliers are the leaders in supplying products for the organisation. To make sure that the supply is maintained on the demand the company always choose reliable and capable suppliers from all over the world. The contracts and the bonds have been created to fulfil the requirement of the stores constantly with suppliers.
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Political: These refer to the changes and involve of the government on making decisions which affects the organisation. Political behaviour can affect the organisations growth in many aspects. On the other hand trade agreement, tariffs and restrictions can be the barriers. Also the tax levies, tax breaks and
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market regulations can be directly affected to the growth of the business. As the nature of the business operation needs to work with countries all over the world, the political stability should be assessed.
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Economic: All businesses are affected by local and global economic factors. National and global interest rate and financial policy will be set around economic circumstances. The atmosphere of the economy dictates how customers, suppliers and other organisational stakeholders such as suppliers and creditors behave within society. Especially in a situation where the world economy falls and in a recession, the organisation cannot expand the business as there is not much demand, even if the company capable for. Also the type of economic system in each country operates in affects the organisation. Due to these circumstances the organisation operates as individual units in each country.
Social: Organisation should be able to align their product or service to harmonize and benefit people’s lifestyle and behaviour. If the organisation fails to do so the market share and the demand for their product or service will be lose. The organisation has limitations in producing some products as globally it has restrictions such as for military air craft’s or equipments. So the company has to manage the efficiency by increasing the productivity even if the company has the capacity of production.
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Technological: Technological advances have deeply changed the manner in which businesses operate. Technology such as Internet, Intranet and telephone which exchange the information faster make the organisations more efficient. Also the ERP systems (Enterprise Resources Planning) supporting the business to record and distribute the information as and when required in easy aspects comparing to the old methods. Also the computers and the devices which help the organisations operations and day to day business smooth have been installed. As the nature of the business involves with the technology, the company should use latest techniques in order to lead the market. And the company has to do the experiments and inventions in terms of the technology to survive in the market.
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Environmental: The organisation is responsible for the low emission as much as they grow in technology. As an initiative for that the company has invested £95 million on Environmentally Friendly Engine (EFE) programme which was started in 2006. The programme will make a major contribution towards achieving the industry targets of 50 per cent lower CO2 emissions, 80 per cent lower NOx (Nitrogen Oxide) emissions and 50 per cent less noise by 2020, all from a 2000 baseline. The company’s leading in the industry should invent environmental friendly technologies, and failure to do so will result in terminates the operations by the governments.
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Legal: As the business operates in over the world, the company has to manage their operations according to the legal circumstances of the particular government. Some government restrictions on products, laws on the employees, laws in currency exchanges and legally allowed operation patterns have to be considered. The company’s legal teams cover all areas of the business and take the initiative in providing advice and assistance to our businesses so that they can meet their commercial objectives and legal
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obligations. To ensure that they deliver high quality legal services that provide the best value to organisation, they work hard to gain a thorough understanding of all aspects of Rolls Royce Company. This enables them to influence key commercial decisions.
Working Environment of BP BP’s approach to managing people and developing their skills is consistent with the principles of our brand. The rights and dignity of all employees. Everyone who works for BP contributes to our success and to creating a distinctive company. Working together, drawing from our diverse talents and perspectives, will stimulate new and creative opportunities for our business. Collectively generate a more exciting and rewarding environment for work in which every individual feels responsible for the performance and reputation of our company. BP’s duty of care in practice-
make the workplace safe prevent risks to health ensure that plant and machinery is safe to use, and that safe working practices are set up and followed make sure that all materials are handled, stored and used safely provide adequate first aid facilities tell about any potential hazards from the work you do, chemicals and other substances used by the firm, and give you information, instructions, training and supervision as needed set up emergency plans make sure that ventilation, temperature, lighting, and toilet, washing and rest facilities all meet health, safety and welfare requirements check that the right work equipment is provided and is properly used and regularly maintained take precautions against the risks caused by flammable or explosive hazards, electrical equipment, noise and radiation avoid potentially dangerous work involving manual handling (and if it can't be avoided, take precautions to reduce the risk of injury) report certain accidents, injuries, diseases and dangerous occurrences to either the Health and Safety Executive (HSE) or the local authority, depending on the type of business
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BP’s workplace is safe and healthy- BP’s work premises provide a safe and healthy place to work:
workplaces are properly ventilated, with clean and fresh air temperatures at a comfortable level (a minimum of 13 degrees C where the work involves physical activity; 16 degrees C for 'sedentary' workplaces (eg offices) - there's no maximum limit) the workplace and equipment clean workrooms are big enough to allow easy movement the workplace and equipment in good working order floors, walkways, stairs, roadways etc safe to use
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fit openable windows, doors and gates with safety devices if needed provide suitable washing facilities and clean drinking water set aside areas for rest breaks and to eat meals, including suitable facilities for pregnant women and nursing mothers make sure that employees who work alone, or off-site, can do so safely and healthily T ASK T HREE
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Regulatory Forces Affecting BP at National, EU & Global Levels
Regulatory forces are the various government regulatory agencies that impact how an organization operates on a daily basis. Some of the general regulatory forces that affect the common business and as well as British Petroleum in UK, EU and internationally are as follows: National Level Health and Safety Executive (HSE )- According to the official web site the HSE’s mission is “to prevent death, injury and ill health in Great Britain’s workplaces." They do this through research, information and advice, promoting training, new or revised regulations and codes of practice, inspection, investigation and enforcement. •
EU Level European Commission- European commission is the executive branch of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general dayto-day running of the Union. •
Global Level Globalization in its literal sense is the process of transformation of local or regional phenomena into global ones. It can be described as a process by which the people of the world are unified into a single society and function together. •
Federal Trade Commission (FTC ) - FTC was created in 1914 in United States of America. It is the only federal agency with both consumer protection and competition jurisdiction in broad sectors of the economy. The FTC pursues vigorous and effective law enforcement; advances consumers’ interests by sharing its expertise with federal and state legislatures and U.S. and international government agencies; develops policy and research tools through hearings, workshops, and conferences; and creates practical and plain-language educational programs for consumers and businesses in a global marketplace with constantly changing technologies.
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Federal Communications Commission (FCC) - The FCC is an independent United States government agency. The FCC was established by the Communications Act of 1934 and is charged with regulating interstate and international communications by radio, television, wire, satellite and cable. The FCC's jurisdiction covers the 50 states, the District of Columbia, and U.S. possessions.
ISO (International organisation for Standardization) - ISO is the main confederation for standardization, with its headquarters in Geneva Switzerland. It is the hallmark for Audited Quality Management Control Systems throughout Trade and Industry affecting all areas of business and qualified by ISO Certification and Registration. UNFCC (United Nations frameworks for climate change) - It is an organisation that consider what can be done to reduce global warming and to cope with whatever temperature increases are inevitable. More recently, a number of nations approved an addition to the treaty: the Kyoto Protocol, which has more powerful (and legally binding) measures. The UNFCCC secretariat supports all institutions involved in the climate change process, particularly the COP, the subsidiary bodies and their Bureau. KYOTO PROTOCOL- The Kyoto Protocol is an international agreement linked to the United Nations Framework Convention on Climate Change. The major feature of the Kyoto Protocol is that it sets binding targets for 37 industrialized countries and the European community for reducing greenhouse gas (GHG) emissions .These amount to an average of five per cent against 1990 levels over the five-year period 2008-2012. E4environment - E4environment Ltd is a registered landscape practice and environmental consultancy, It was founded in January 2000 by the two founding Directors Kay Hawkins and Mandy Stoker who between them have more than 34 years experience in environmental consultancy. The company now has three Directors and a team of environmental consultants, researchers, graphic technicians and an office manager.
Effects of Globalization It is a pleasure, and an honour to have been invited to share a few thoughts with today. The reflection on the morality of global economy, or globalisation, is formed looking through three lenses. The first, is the unique lens that brought me here, namely the corporate lens which comes with being a senior advisor for one of the worlds largest industrial companies, BP. BP is a company that lives globalisation. We recognize that we are uniquely positioned to contribute to shaping human development in many diverse parts of the world. Few other 14
entities offer as much opportunity to put reality behind the words "force for good." Globalization has various aspects which affect the world in several different ways such as: Industrial - emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies. •
Financial - emergence of worldwide financial markets and better access to external movement of material and goods between and within national boundaries. •
Economic - realization of a global common market, based on the freedom of exchange of goods and capital. The interconnectedness of these markets, however meant that an economic collapse in any one given country could not be contained. •
Political - some use "globalization" to mean the creation of a world government which regulates the relationships among governments and guarantees the rights arising from social and economic globalization. Politically, the United States has enjoyed a position of power among the world powers; in part because of its strong and wealthy economy. With the influence of globalization and with the help of The United States’ own economy, the People's Republic of China has experienced some tremendous growth witfhin the past decade. If China continues to grow at the rate projected by the trends, then it is very likely that in the next twenty years, there will be a major reallocation of power among the world leaders. China will have enough wealth, industry, and technology to rival the United States for the position of leading world power. •
Informational - increase in information flows between geographically remote locations. Arguably this is a technological change with the advent of fibre optic communications, satellites, and increased availability of telephone and Internet. •
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Language - the most popular language is English About 35% of the world's mail, telexes, and cables are in English. Approximately 40% of the world's radio programs are in English. About 50% of all Internet traffic uses English. Technical Development of a global telecommunications infrastructure and greater transborder data flow, using such technologies as the Internet, communication satellites, submarine fiber optic cable, and wireless telephones Increase in the number of standards applied globally; e.g. copyright laws, patents and world trade agreements. Legal/Ethical The creation of the international criminal court and international justice movements. Crime importation and raising awareness of global crime-fighting efforts and cooperation. The emergence of Global administrative law .
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Corporate Social Responsibility
Corporate Social Responsibility (CSR) policy section focuses on CSR in Europe and in particular the development of the EU's CSR strategy. Corporate social responsibility describes a company's commitment to be accountable to its stakeholders - i.e. those influenced by its decisions and actions, either locally or internationally - in its operations and activities. The EU's approach to this issue takes as its starting point the triple bottom line method that combines economic, social and environmental performance. BP is one of the largest companies in the world - with a turnover dwarfing that of some nation states. As an oil company, it is directly linked with the use of fossil fuels linked with major environmental challenges on a global scale. No company has achieved a higher profile in its stated determination to completely reorientate the business to adapt to the needs of a more sustainable society. With its major - and controversial - rebranding and commitment to becoming a sustainable energy company rather than simply an oil company - it has inspired and impressed some, and irritated others. During his time in charge, Lord John Browne established himself as one of the most thoughtful business leaders taking a lead in corporate social responsibility. This was, however, a position that became tarnished at the end when a series of major accidents hit the company as a result of safety and maintenance failures. There are very few aspects of how a company behaves as a corporate citizen that do not apply to a company of the size and nature of BP. The most significant of these are the sheer environmental impact - not simply of the extraction of oil and the energy use of BP's own operation, but more significantly of the impact on climate change of the actual use of all the oil by BP's customers. The state of current scientific evidence raises serious question marks over whether or not human society can actually afford to burn all the hydrocarbons whose existence we have already identified - never mind potential future discoveries. Twenty years ago, people worried that one day the oil would run out. Now, it is the case that the real issue has been identified as one of emissions. A company with such extensive operations in developing countries also needs to carefully manage its approach to human rights, and ethical business practices. BP will have significant impact on local communities - both as a huge employer and through the nature of its on-the-ground operations. It should expect to seriously seek to reduce negative impacts here, and to invest seriously in those communities. BP as a global player, is immensely powerful. It has no democratic legitimacy, but often is better able to lead on the social development of the planet than national governments. This is a dilemma it needs to handle carefully. In his final introduction to a BP social responsibility report, "The past two years have been difficult for BP. In March 2005, at the Texas City refinery, BP suffered a tragedy in which 15 people died and many more were seriously injured. BP have 16
also experienced operational difficulties in Alaska and the potentially destabilizing effects of intense and at times unbalanced media scrutiny and criticism. BP’s sixteenth annual report on non-financial performance, are remarkable and a great testimony to the BP team across the world: an improvement in personal safety, with reported recordable injury frequency the lowest in our recorded history ongoing improvements in our environmental impact across a series of measures an improvement in the development of people, including an increase in the number of women in leadership since 2000 and, of course, a strong financial performance allowing us to invest for the future and to reward those who trust us with their savings •
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Environmental Responsibility and Accountability BP’s target to reduce group-wide greenhouse gas emissions by 10% from a 1990 baseline over the period to 2010. The reductions will be measured and verified by external observers. BP’s pilot internal system for emissions trading allows individual business units to find the lowest-cost way of meeting the group’s overall target. At this stage 12 business units are involved. Over the next 18 months we will expand that system to include all the activities of BP Amoco. Our trading system was developed in partnership with the Environmental Defense Fund (EDF), a US-based environmental non-governmental organization. Continuation of our constructive role in developing policy and research on climate change through our support of a range of programmes including the Massachusetts Institute of Technology Joint Programme on the Science and Policy of Global Change and the IEA Greenhouse Gas programme. Collaboration with other business organizations and the World Resources Institute to publish a report entitled Safe Climate, Sound Business, developing a crosssectoral approach to climate change. During 2008, BP continued to environmental management systems to seek improvements on a wide range of environmental issues. Except at two locations, the operations at our major operating sites are covered. Issues- Though the company is contributing to the environmentally friendly operation, relatively the company has restrictions and limitations due to the nature of the business. In that case some profitable projects have to be ceased and manufacturing products has to be limited.
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References Books: Beck, U. (1999) what is Globalization, Cambridge: Polity Press. Chossudovsky, M. (1997) The Globalization of Poverty. Impacts of the IMF and World Bank reforms, London: Zed Books. Foreign Policy (2002) 'Globalization's last hurrah?', Foreign Policy, January/February, http://66.113.195.237/issue_janfeb_2002/global_index.html Fox, J. (2001) Chomsky and Globalization, London: Icon Books. International Monetary Fund (2000) Globalization: threat or opportunity, International Monetary Fund, corrected January 2002 Kuehn, L (1999) 'Responding to Globalization of Education in the Americas -- Strategies to Support Public Education', Civil Society Network for Public Education in the Americas CSNPEA, http://www.vcn.bc.ca/idea/kuehn.htm Manly, Bryan F.J. 2001. Statistics for Environmental Science and Management. Boca Raton, FL: Chapman & Hall. Nick Hanley by Introduction to Environmental Economics. Ortolano, Leonard. 1984. Environmental Planning and Decision Making. New York: Wiley. Soesilo, J. Andy and William D. Wiley. Multimedia Environmental Management. World Bank (1999) World Development Report 1998/99: Knowledge for DevelopmentWorld Bank. [1999, 9 August]. http://www.worldbank.org/wdr/wdr98/contents.htm. World Bank Research (2002) 'Globalization, Growth and Poverty: Building an Inclusive World Economy', The World Bank Group
Journals: 18
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Environmental Management Processes and Practices for Australia By Ian Thomas Environmental Science for Environmental Management, by Timothy O'Riordan Human Resource Management, Ivancevich, 7th edition. Law & Practice Relating to Disciplinary Actions, S. A. Huq.
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URL: www.amosweb.com/cgi bin/ gls&c=dsp&k=regulatory+forces) URL: www.bp.co.uk URL: www.ec.europa.eu/index_en.htm URL: www.fcc.gov/aboutus.html URL: www.ftc.gov URL: www.google.com URL: www.hse.gov.uk URL: www.infed.org/biblio/globalization.htm. URL: www.isoqsltd.com/index.html
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