Introduction
Globalization is the comprehensive term for the emergence of a global society in which economic, political, environmental, and cultural events in one part of the world quickly come to have significance for people in other parts of the world. Globalization is the result of advances in communication, transportation, and information technologies. It describes the growing economic, political, technological, and cultural linkages that connect individuals, communities, businesses, and governments around the world. Globalization also involves the growth of multinational corporations and transnational corporations ( 2004). The international institutions that oversee world trade and finance play an increasingly important role in this era of globalization. Although most people continue to live as citizens of a single nation, they are culturally, materially, and psychologically engaged with the lives of people in other countries as never before ( 2004).
Distant events often have an immediate and significant impact, blurring the boundaries of people’s personal worlds. Items common to people’s everyday lives such as the clothes they wear, the food they eat, and the cars they drive are the products of globalization. Globalization has both negative and positive aspects. Among the negative aspects are the rapid spread of diseases, illicit drugs, crime, terrorism, and uncontrolled migration. Among globalization’s benefits are a sharing of basic knowledge, technology, investments, resources, and ethical values ( 2000). Most experts attribute globalization to improvements in communication, transportation, and information technologies. Advances in communication and information technologies have helped slash the cost of processing business orders by well over 90 percent. Using a computer to do banking on the Internet, for example, costs the banking industry pennies per transaction instead of dollars by traditional methods. Advances in communications instantly unite people around the globe. For example, communications satellites allow global television broadcasts to bring news of faraway events, such as wars and national disasters as well as sports and other forms of entertainment. The Internet, the cell phone, and the fax machine permit instantaneous communication. The World Wide Web and computers that store vast amounts of data allow instant access to information exceeding that of any library ( 2004).
Improvements in transportation are also part of globalization. The world becomes smaller due to next-day delivery by jet airplane. Even slow, oceangoing vessels have streamlined transportation and lowered costs due to innovations such as containerized shipping. Advances in information technologies have also lowered business costs. The global corporation Cisco Systems, for example, is one of the world’s largest companies as measured by its stock market value. Globalization raises other questions that will be central to the 21st century. What is the proper role for the IMF, WTO, and UN, and how should they be governed? What is the best way to finance development? How much autonomy should countries have when the economic, political, and environmental decisions they make can have global repercussions? To what extent should global institutions be able to constrain what countries can and cannot do in an increasingly globalized world? What is the right way to balance social and cultural values with the need for economic efficiency? As the 21st century progresses, more and more decisions regarding these and other issues will need to be debated (2004). Globalization affects the way companies treat its environment. Changes in businesses affect the way they preserve the different things in the environment. The paper will discuss about corporate social responsibility. The paper will also provide a comparison of Bp UK oil refinery and oil refinery in Pakistan. The paper will then discuss the problem the companies follow the corporate social responsibility and what can be done towards it.
Corporate responsibility
The process of globalization over the past decade has created unprecedented opportunities for global companies in trade, investment, services, and production. The fact that the rapid pace of growth of economic opportunity has not corresponded with the growth of leadership in business ethics and a sense of corporate responsibility has potentially threatening consequences for the reputation of free market economies and businesses. Public concern is accelerated by a wider use of electronic communications that is changing the nature of politics as much as that of business operations. The leadership of a few progressive companies, the rise in consciousness of corporate responsibility as an essential feature to sustain global capitalism, and emerging evidence of partnership initiatives which hold the key to equitable development, are all encouraging pointers towards progress. Business has the capability of bringing creative and sustainable solutions to many of the ills facing the world such as ill health, illiteracy, and unemployment, and to reinforce freedoms and choice, if it engages in the challenges which will contribute to its long-term sustainability and profitability ( 2003).
The challenge for those engaged in promoting corporate social responsibility is not just to make a compelling business case, as important as that is, but to elevate business values and integrity. It is to spread awareness that one cannot cherry-pick globalization and reap the rewards of open markets without responding to the forces that will ultimately undermine free markets. It is to recognize that responding to the challenges of diversity and transparency is at the heart of successful internationalization of business. It is to dare to appeal to business leaders, in an imperfect world, for values based leadership, decency and integrity, and an absolute commitment to attack corruption as the essential bedrock of business activity with a human face ( 2003).
In a globalizing world, business leaders will need to be more pro-active and progressive. They cannot rely on their business and trade associations that are so often held back by the slowest ship in the convoy, national interests, legalistic defense of rights and lack of vision. The consequences of business and business leaders failing in this challenge will be growing and corrosive public and media cynicism, declining values and respect for property at work, negative activism and efforts to regulate business by international institutions lacking competence and capacity. There has been a vivid demonstration that regulated markets in even the most experienced capitalist economies are tough to set up and run, and that the cost of getting it wrong is corrosive public cynicism of business and hostility towards its leaders ( 2003). There is not a great deal of evidence that the lessons have been learned or that governments have the capacity or desire to regulate for corporate responsibility, even if opportunistic politicians have the ingenuity to make political capital out of the problems.
Corporate responsibility is a pact for the mutual benefit between society that needs business for economic and social development, and business that needs a supportive business environment. It is also a pact between capital and management in modern companies, which has been as shaken up by some recent scandals where management disregarded the bond of transparency with shareholders. All too often, professional managers and their advisers have been tempted to see the resources of public companies as their own property without the sense of stewardship that owner-managers once had. The balance can only be struck by combining professionalism with transparency ( 2003).
Social Responsibility
Social responsibility has acquired an increasingly important role in the practice of corporate management and in corporate decision making. Firms may benefit from socially responsible actions and policies in terms of community reputation of commitment to the public good, enhanced employee morale and productivity, and in terms of stock- and bondholders’ perceptions of management skill at risk reduction as indicated by social responsibility. Companies who show concern for the environment acquires many benefits. Almost everybody believes that corporations should be concerned about something more than making money, that they have responsibilities not only to stockholders but to their employees, to their customers, to the communities in which they work and to society at large. The extent to which social responsibility will continue to influence corporate decision making depends in part on managerial perceptions of the impact of socially responsible actions on the effectiveness of the firm.
Many companies base their socially responsible actions on the belief that these actions provide or will provide some benefit to the company, a strategy referred to as enlightened self-interest ( 1993). The results of several studies support a positive relationship between corporate social responsibility and firm financial performance that used five different measures of financial performance. In the study it concluded that the companies within the pulp and paper industry that had the best record on pollution control and the environment were also the most profitable. However, other studies provide conflicting conclusions, suggesting that firms may incur costs from socially responsible actions that put them at an economic disadvantage compared to other, less responsible firms ( 1993).
Consumer and investor concerns about corporate social behavior can be a compelling factor in determining what is in a company’s best interests in terms of their impact on market share. It has been suggested that corporate managers will take social initiatives seriously only when they are convinced that their company’s social record affects market share and thus financial performance maintain that companies fight hard for even a small percentage gain in market share for their products. If and when corporate managers become convinced that their company’s social record affects market share, they will be forced to take social initiatives seriously. One way to ascertain the extent to which companies are and will continue to be committed to corporate social responsibility is to measure the beliefs of top management about the relationship between social initiatives and market share. The role of top management in the integration of social responsibility issues into corporate decision making cannot be overestimated. Progress has been made in assessing managerial attitudes toward corporate social responsibility but little is known about managerial perceptions of the relative importance of social responsibility issues in organizational effectiveness ( 1993). Social responsibility is not only important for people but businesses as well.
Corporate social responsibility
Corporate social responsibility can be defined as the duty of organizations to conduct their business in a manner that respects the rights of individuals and promotes human welfare. While the level of social responsibility exhibited by multinational corporations is said to be improving, perfection has hardly been attained. Governments and people around the world seem to have an increasing interest in scrutinizing the actions of global corporations, in effect forcing international companies to be good corporate citizens. One reason for this could be the realization that multinational companies (MNCs) are not as invincible as they were once thought to be; therefore, their policies can be influenced to benefit society. A second reason may be a realization that effective legal governance of companies whose activities stretch beyond national borders is impossible, leaving self governance as the only practical alternative. Social responsibility in business has been debated for a long time, and several sides of the issue have been presented by ethicists. This debate has been extended in recent years to include the operations of MNCs ( 1995). About public interest in business ethics and corporate social responsibility (CSR) during the past three or four decades, two conclusions can be drawn. First, interest in business ethics and social responsibility has heightened during each of the past forty years. Second, interest in business ethics and CSR seems to have been spurred by major headline-grabbing scandals. Certainly, society has taken an on-again, off-again interest, but lately this interest has grown to a preoccupation or obsession ( 2003).
Because of ethical missteps like those just alluded to, business has been undergoing the most intense scrutiny it has ever received from the public. As a result of the many allegations and charges that it has little concern for the consumer, cares nothing about the deteriorating social order, has no concept of acceptable behavior, and is indifferent to the problems of minorities and the environment concern continues to be expressed as to what responsibilities business has to the society in which it resides. These concerns have generated an unprecedented number of pleas for CSR, more recently included in the broad term of corporate citizenship. No one would argue that life in most business organizations was much simpler in the past, in a less complex period, with minimal and clearly understood expectations among the various parties. Investors put up money to start or finance the business, owners and employees kept the business running, suppliers made raw materials available for production, and customers purchased the product or services. In today’s society, organizations face a more complex state of affairs. The public recognizes that today’s business organization has evolved to a point where it is no longer the sole property or interest of the founder, the founder’s family, or even a group of owner-investors. That development has been a principal driving force behind this societal transformation (2003).
Organizational management that truly cares about business and corporate social responsibility is proactive rather than reactive in linking strategic action and ethics. It steers away from ethically and morally questionable business opportunities and business practices. It goes to considerable lengths to ensure that its actions reflect integrity and high ethical standards. If an organization’s stakeholders conclude that management is not measuring up to ethical standards, they have recourse. For example, concerned investors can protest at the annual shareholders’ meeting, appeal to the board of directors, or sell their stock. Concerned employees can unionize and bargain collectively, or they can seek employment elsewhere. Customers can switch to competitors. Suppliers can find other buyers. The community and society can do anything from staging protest marches and urging boycotts to stimulating political and governmental action ( 2003).
Petroleum and the petroleum industry
Petroleum, or crude oil, naturally occurring oily, bituminous liquid composed of various organic chemicals. It is found in large quantities below the surface of Earth and is used as a fuel and as a raw material in the chemical industry. Modern industrial societies use it primarily to achieve a degree of mobile both on land, at sea, and in the air that was barely imaginable less than 100 years ago. In addition, petroleum and its derivatives are used in the manufacture of medicines and fertilizers, foodstuffs, plastics, building materials, paints, and cloth and to generate electricity. The United States petroleum industry is composed of tens of thousands of separate businesses, covering an enormous range in size, influence, and breadth of operations ( 1959).
Its behavior is governed not merely by the profit-seeking activities of these private parties, but also in vital ways by a network of governmental controls, direct and indirect, state and national agencies that regulate output, providing differential tax treatment in the way of special exemptions and levies, fixing prices, limiting international commerce, as well as merely persuading, threatening, or cajoling managers into one course of action or another. This aggregation of separate business entities, thus organized and controlled, is expected to safeguard the national defense, conserve scarce resources, reduce prices, improve quality, expand capacity, and protect the competitive status of thousands of private parties whose interests are often flatly opposed. The diversity of these influences on industry behavior and the complexity of these tests of good and bad performance preclude a simple verdict in assessing the charges and counterclaims of waste and monopoly, conservation and competition that have plagued the industry during the entire course of its history ( 1959).
Modern industrial civilization depends on petroleum and its products; the physical structure and way of life of the suburban communities that surround the great cities are the result of an ample and inexpensive supply of petroleum. In addition, the goals of developing countries to exploit their natural resources and to supply foodstuffs for the mushrooming populations are based on the assumption of petroleum availability. In recent years, however, the worldwide availability of petroleum has steadily declined and its relative cost has increased. Many experts forecast that petroleum will no longer be a common commercial material by the mid-21st century. Petroleum is formed under Earth’s surface by the decomposition of marine organisms. The remains of tiny organisms that live in the sea and, to a lesser extent, those of land organisms that are carried down to the sea in rivers and of plants that grow on the ocean bottoms, this are enmeshed with the fine sands and silts that settle to the bottom in quiet sea basins. Such deposits, which are rich in organic materials, become the source rocks for the generation of crude oil. Once the petroleum forms, it flows upward in Earth’s crust because it has a lower density than the brines that saturate the interstices of the shales, sands, and carbonate rocks that constitute the crust of Earth ( 1959).
The crude oil and natural gas rise into the microscopic pores of the coarser sediments lying above. Frequently, the rising material encounters an impermeable shale or dense layer of rock that prevents further migration; the oil has become trapped, and a reservoir of petroleum is formed. A significant amount of the upward-migrating oil, however, does not encounter impermeable rock but instead flows out at the surface of Earth or onto the ocean floor. Surface deposits also include bituminous lakes and escaping natural gas. In order to find crude oil underground, geologists must search for a sedimentary basin in which shales rich in organic material have been buried for a sufficiently long time for petroleum to have formed. The petroleum must also have had an opportunity to migrate into porous traps that are capable of holding large amounts of fluid. The occurrence of crude oil in Earth’s crust is limited both by these conditions, which must be met simultaneously, and by the time span of tens of millions to a hundred million years required for the oil’s formation ( 1959).
Petrochemicals are manufactured from naturally occurring crude oils and gases. Once removed from the earth, the crude oil is refined into gasoline, heating oil, kerosene, plastics, textile fibers, coatings, adhesives, drugs, pesticides, and fertilizers. Crude oil contains thousands of natural organic chemicals. These are separated by distilling, or boiling off, the compounds at different temperatures. Gases such as methane, ethane, and propane are also released. Methane, when combined with nitrogen and pressurized and heated, yields ammonia, an important ingredient in fertilizers. Simple plastic materials, such as polyethylene and polypropylene, are manufactured by first heating ethane and propane gases and then rapidly cooling them to alter their chemical structure (1991).
ARL
Attock Group of Companies is the only fully integrated group in the Petroleum sector of Pakistan. Attock Group deals in exploration, refining, and marketing of petroleum products that makes it the most reliable and resilient operator in the industry. Attock Refinery Limited (ARL) is the pioneer in crude oil refining in Pakistan with its operations dating back to 1922. Backed by a rich experience of more than 80 years of successful operations, ARL’s plants have been gradually upgraded with state-of-the-art hardware to remain competitive and meet new challenges and requirements. The Attock Group of Companies comprises of the Attock Oil Company Limited (AOC), Attock Refinery Limited (ARL), Pakistan Oilfields Limited (POL) and Attock Petroleum Limited (APL). AOC is registered in UK and supervising the overall business of Attock Group in Pakistan. POL is engaged in exploration, drilling, production, and transmission of petroleum and related activities. POL has provided channels to transport crude oil to ARL through its pipeline network from not only its own oilfields but also from some other oilfields. ARL has the ability to refine the crude oil received from POL as well as eighteen (18) other exploration companies.
The refined petroleum products are then sold to Operation and Maintenance Center (OMCs) operating in Pakistan that also includes APL, which is operating as an OMC since 1998. ARL’s configuration allows it to process crude to produce a complete range of petroleum products from LPG to Asphalt including specialty products such as Jet Fuels (Jet A 1, JP-4, and JP-8) Cutback Asphalts, Polymer Modified Asphalt, Mineral Turpentine Oil and Solvent Oil. ARL’s current nameplate capacity stands at 37,500 Barrels per day (BPD) but is currently operating at around 43,000 BPD.
ARL is strategically located in the Oil and energy sector providing petroleum products to the Northern Region of the country and simultaneously providing an outlet to crude oil produced in the Potohar Region of Pakistan. ARL is enormously contributing towards the economy of Pakistan in different manner that includes supplying of things like of petroleum products to Civil and defense market including Airlines, Railways, Power stations, Cement and other industries; providing an outlet to indigenous production of crude oil in Pakistan and particularly from the Potohar Region otherwise required be exporting or transporting at huge cost; generation of government duties/taxes on supply of petroleum products including General Sales Tax; generation of foreign exchange earnings through petroleum products exports including Naphtha/Jet Fuels exports; and providing employment and work opportunities in the Refinery including deployment of large transportation fleet of crude oil and products movement.
The company’s most valuable asset is their people. Implementation of HR best practices has enabled them to induct and retain honest, competent, committed and motivated team players. Their employees take pride in their lifetime relationship with the organization, employee turnover is negligible and one can find numerous examples of generation after generation employment at ARL. The company has a systematic and well thought out Management Development Plan and they help the employees in keeping them fully abreast of the latest knowledge and skills through in-house and out-sourced training and development programs. ARL Management Development Center (MDC) caters for the employees training initiatives. ARL is an equal opportunity employer. They offer excellent career opportunities at market based compensation packages for the best available talent. They recognize the professionalism of the employees as one of the foundations of the company’s corporate strength, and ensure the fullest possible utilization of their employees’ initiative through provision of working environment, that is conducive. The company continues to be a leader of the industry in the areas of provision of employee benefits, and having cordial industrial relations.
ARL and CSR
ARL promotes sustainable community development as part of its core values to create the foundation for a more equitable, just, productive, competitive and knowledge-based environment. As a responsible corporate citizen, ARL has always believed in working as part of community and has made sizeable contributions for projects in the field of environment, health, income generation, women development, HRD, education and sports. Besides being the right thing to do, ARL believes that’s its investments in CSR benefit the company’s bottom line. Spending the time and resources on environmental performance improvements, fostering relationships based on trust and respect with key stakeholders and working with local communities to ensure they share in the benefits of the businesses and are simply part of good business practice. Some of the benefits can be backed up with numbers, while others are less easily measured and therefore less easily linked to the bottom line. CSR has helped enhance ARL’s reputation, which builds credibility and trust with stakeholders at all levels, and these are valuable assets. While acquiring the latest state of the art facilities ARL has never been oblivious to the human factor and has been in the forefront to discharge its CSR.
ARL since its establishment in 1922 has played a significant impact on the Morgah and Kotha Kalan communities. ARL is making a sincere effort to involve local community in development projects, focusing on capacity building rather than traditional donor-beneficiary relationships. Provision of water, carpeted roads, playing grounds, culverts, and parks etc. has not only resulted in poverty alleviation and improving lifestyle of the locals but has also helped ARL in expanding its operations through the support of the local population. ARL has a Vision and Values Statement that sets forth the company’s values. The three top most core values are linked with CSR includes Integrity & Ethics, Quality and Social Responsibility. These are supported by concrete guiding principles that allow employees to understand what they mean and how the values relate to their day-to-day work. The Vision, Mission and Values Statements were developed through consensus at all levels within the company, which also helped garner employee buy-in and understanding.
BP
BP Amoco p.l.c. is an international petroleum, gas, and chemical company, based in London, England. Formerly known as The British Petroleum Company PLC (BP), the company merged with Amoco Corporation in 1998 and adopted its current name. BP Amoco is one of the world’s largest oil companies. It explores for oil and natural gas in Latin America, North America, the North Sea, North Africa, Southeast Asia, and Central Asia. The company operates major refineries around the world and markets its products in more than 100 countries. It holds a half-interest in the Trans-Alaska Pipeline, which transports oils from fields in northern Alaska to the port of Valdez in southern Alaska. In 1999 BP Amoco announced its plans to acquire Atlantic Richfield Company (Arco), a petroleum and natural gas company based in Los Angeles, California. In 1901 British mining magnate received permission from the shah of Iran to look for petroleum throughout the shah’s empire.
In 1908 ’s geologists discovered oil in southwest Persia the first commercial oil discovery in the Middle East. In a joint venture with the Burmah Oil Company, formed the Anglo-Persian Oil Company in 1909. In 1914 the company signed an agreement with the British government under which the government purchased 51 percent of the company’s shares and acquired two seats on its board of directors. Despite the government’s majority ownership, which continued until Britain sold off the last of its shares in 1987, Anglo-Persian continued to operate as an independent company ( 2001)
Anglo-Persian profited from the discovery of major oil fields in Iraq in 1927 and in Kuwait in 1938. The company was renamed Anglo-Iranian Oil Company in 1935. Its favorable arrangement with Iran, however, was challenged by the country’s nationalist government in the 1940s. In 1951 the government of Iranian premier took control of Anglo-Iranian’s oil fields in Iran. For three years the company ceased production in Iran, where its largest oil field was located. In 1953 and other nationalists in the Iranian Parliament moved to seize power from , the shah of Iran. The shah fled the country, but within a few days a coup, in which the British and U.S. secret services reportedly played a role, returned the shah to power. A new agreement, reached in 1954, made the company a 40-percent shareholder in a consortium of Western oil companies drilling in Iran. The company was renamed The British Petroleum Company PLC that same year.
Discoveries in Alaska in 1969 and the North Sea in 1970 made the company one of the largest producers of oil and natural gas in the western hemisphere. The difficulties of extracting oil in such extreme environments made BP a leader in oil-field technology and contributed to its later successes in extracting crude oil from reserves in the Sahara, the Gulf of Mexico, and Papua New Guinea ( 2001) Beginning in the 1970s, the company pursued a strategy of diversification, acquiring companies that engage in food processing, mining, and computing services. However, in the late 1980s BP began to sell its peripheral businesses to concentrate on its core businesses in petroleum and chemicals. In 1994 BP discovered 100 million cubic meters of gas reserves in Colombia. In August 1998 BP announced it would acquire Amoco, the largest supplier of gas in North America. Federal regulators approved the deal, valued at approximately billion, by the end of 1998. A few months later, in 1999, BP Amoco announced its plans to acquire Arco for about .8 billion. In 2000, after meeting certain requirements by the United States Federal Trade Commission (FTC), the deal was completed ( 2001)
BP and CSR
The company believes that it can and it will play a part in finding issues associated with sustained development. It also believes that the company is a part of the solution and not the main solution to the problems in the environment. The company makes sure that it reports its greenhouse gas and other emissions, oil spillages, employee satisfaction, days lost through injury at work, and community investment all over the world. The company’s policy statement commits the company to achieve its business goals. The reporting done by the company helps in illustrating the company principles.
Business and the environment
Society’s attitude to environmental matters has evolved with the other changes. These changes should be seen alongside striking changes in the values, ethics, morals and beliefs held by society, which have themselves largely been a consequence of industrialization and urbanization. New lines of communication, the changing role of the media, education, and a shift from the need for survival to a desire for an improved quality of life-at least in Western societies-has changed people’s views of what is important. The rise of environmentalism has influenced the views of the individual and these have put pressure on business to change. Two hundred years ago there were no environmentalists as people know them today. Gradually, their views have shaped society’s attitude to the environment and to the impact that business has had on the environment. Business activities have an impact on the environment. This occurs through pollution, the modification of ecosystems, introducing exotic species and chemical compounds, genetic engineering and irreversible physical changes. The sorts of impacts widely reported in the popular press and television. The ways in which land has been used, particularly for agriculture and forestry, are a reflection of the way in which the commercial pressures of business have changed the physical landscape.
Business affects the environment in a variety of ways both deliberate and accidental ( 2001). Most of the effects are usually seen as detrimental, although increasingly people see some business activity improving the environment. For example, a number of museums and country houses have been opened to the public where the restoration of former days of glory have halted decades of decline and reinstated previous, albeit not entirely natural, surroundings. However, many firms who claim to be improving the environment are in reality only mitigating against the most injurious impacts of what is occurring.
Hence the practice of planting trees and landscaping around industrial plants is not improving the environment but merely reducing the detrimental effects of building the plant in the first place. Second, but less obvious, are the impacts the environment has on business. Changes in climate have led to changes in business activity. Depleting resources or physical limitations on the use of some materials have changed patterns of exploitation and their uses. Changing environmental conditions have led to the birth of new industries. Although less widespread and less covered by the literature, these changes are still worthy of people’s attention (2001).
Third, business activities are influenced by environmental concerns. It is hard to identify a business where environmental concerns have no impact on its operations. For most businesses, environmental issues are less important than other external influences such as the state of the economy or the behavior of its competitors. For some, which are close to the environment such as agriculture or tourism, the impacts can be at the top of their agenda. Environmental legislation, customer attitudes to the environment along with direct actions by environmental groups are among the most obvious influences which can be grouped together under the umbrella term of environmentalism. Environmentalism has a considerable impact on many individual businesses. Businesses are increasingly aware of public pressure to have due regard for the environment and now many have corporate policies that are either sympathetic, or pro-active, to environmental aims. Fourth, business has worked hard to influence public opinion about the environment. While many such actions can be seen merely as window dressing, many business opportunities have been seized to pro-actively develop products and services resulting in environmental improvement. Business has actively promoted some of its activities in terms of the environmental benefits they have brought (2001). There are different effects of production and use of oil in the environment. This includes pollution; oil contamination of sea; the modification of ecosystems, introducing exotic species and chemical compounds, genetic engineering and irreversible physical changes.
Oil Pollution
The oceans have traditionally been the ultimate dump for many of humanity’s noxious wastes. Some pollutants are pumped into them directly from ships or are discharged from coastal facilities. Others are carried into the oceans by rivers or fall from the atmosphere with precipitation. Among the major types of pollutants that have been released into the oceans are sewage from municipal systems; the herbicides, pesticides, and fertilizers that run off agricultural land; a great variety of industrial wastes such as mercury, lead, and other heavy metals; radioactive materials from nuclear power plants and weapons production; and petroleum and other oily substances, upon which this case study will focus. This different wastes has different and often than not negative environment to the environment. Until recently, it was thought that the oceans were vast enough to disperse and neutralize these substances without significant harm to the environment. Such complacency is no longer warranted in view of growing evidence of significant damage to the marine environment from pollutants, especially in certain coastal areas ( 1985).
Oil pollution has become a serious problem with the dramatic increase in the world consumption of petroleum occurring since World War II. Simultaneously, there has been an even more rapid rate of growth in the international trade in oil, most of which is transported over the seas. However, shipping accounts for only slightly more than one-third of the petroleum hydrocarbons entering the oceans. Over half of that pollution comes from land sources, such as industries and refineries. Approximately 10 percent seeps up naturally from the ocean floor, and although offshore drilling accounts for only about 1 percent of the oil pollution, spectacular blowouts such as the ones that took place in the Santa Barbara Channel in 1969 and in the Gulf of Mexico in 1979 can have serious impacts on the local environment (1985).
Most of the pollution attributable to shipping results from the operation of the world’s gigantic fleet of oil tankers. Relatively small amounts come from other vessels that use petroleum as a power source. Over the past fifteen years, various types of accidents involving tankers have resulted in numerous oil spills. Because of their immense size, supertankers are difficult to maneuver and are prone to mechanical and structural failures. Collisions become more frequent as waterways are increasingly congested, and groundings are not uncommon where there are treacherous geological features and severe storms. And volatile gasses remaining in emptied tanks have caused a number of spectacular explosions. As dramatic as these shipwrecks have been, accidents account for only 5 to 10 percent of the ship-related oil pollution. 24 Much greater quantities of oily substances are discharged intentionally from vessels as part of their routine operations ( 1985).
After the cargo of oil is removed, some of the empty tanks are filled with sea water, which serves as ballast to keep the vessel stable on its return trip. Prior to reloading, the ballast water is pumped out and returned to the ocean mixed with the leftover oil that coated the insides of the tanks. It has also been a common practice on return trips to wash some of the empty tanks to remove sludge and to dispose of the oily residues by discharging them directly into the oceans. The seriousness of the environmental damage resulting from oil pollution has been a matter of dispute among scientists. It is apparent that much depends upon the type of oil that is spilled and the local conditions. Under favorable circumstances, much of the oil will evaporate rather quickly or be dispersed by wind and wave action ( 1985).
Modifying Ecosystems
Like any other creatures, human beings have always had some effect on the ecological systems of which they were a part, but the history of deliberate and significant modification of ecosystems doubtless began with the development of agriculture. Since then, human influence has reached to the remotest areas of the planet and has been intensified by increasing numbers of people and the development of modern technology. What are some of the ways in which humanity modifies ecological systems? Obviously, some ecosystems are destroyed outright by such diverse activities as clearing land to plant crops, starting fires, building dams, applying defoliants to jungles, constructing buildings, and laying pavement. Forests are chopped down for structural wood and firewood. Estuaries are dredged, filled, or altered by bulkheads. And ecosystems can be destroyed as a part of military strategy ( 1997).
The effects of such assaults are diverse. Paved areas are normally removed from natural systems for long periods and their rapid reclamation is both costly and difficult. Dams take land out of terrestrial systems for long periods, but as noted earlier, dams are temporary structures, and enriched land will eventually be returned. Strip-mined areas in developed countries often have not been reclaimed; the practicability of doing so at all is a function of both economics and ecology. When prairie is converted to cornfield, an unstable ecosystem replaces a stable one. Attempts to stabilize such systems artificially can lead to further destabilization and bring about changes elsewhere as well ( 1997).
Physical assaults on ecosystems often interact with overexploitation and pollution to threaten species with extinction. For example, industrial and harbor development encroaching on breeding areas is combining with oil pollution and competition from the fishing industry to deplete South African jackass penguin populations already reduced in size by overexploitation of the bird’s eggs and disruption of their breeding activities ( 1997). Now that ecologists are gaining a more detailed understanding of the factors that threaten ecosystems, they are beginning to examine carefully strategies for preserving natural diversity. Especially interesting have been attempts to develop a guideline for location, number, size, and configuration of natural reserves, based on the theory of island biogeography. Application of the principles uncovered will require a commitment to conservation and a halt to human expansion while there are significant wild areas left to conserve ( 1997). Due to these different problems that oil production can create; an interview with companies was done to create effective CSR strategies.
The results of the interview
When the respondents were asked regarding whether or not the organization has responsibility over the stakeholders. The resounding answer was yes. With regards to the type of interaction with the stakeholders the reply varies on each respondents. Some interact through EGM, AGM. Others through BOD meetings; some interact through focus group. The respondents interact with stakeholders through meetings, queries, hotline, survey and response. The respondents were asked about what they think among corporate governance, business ethical principles, environment compliance, disclosure environmental and social report, product integrity, community investment, stakeholder dialogue, financial performance, and supply chain security shows that the company is socially responsible. Among these things the respondents believed that business ethical principles, environment compliance and product integrity showed that the company is responsible. The respondents were asked about what community initiatives the company was involved in. They replied that the company was involved in 4 schools, upgrades to state of the art technology that will benefit the society, drinking water treatment plant that satisfies WHO standards, environment awareness, sports participation and capacity building.
The respondents are asked about where they base their purchasing decisions. The replies of the respondents were energy efficient products, environment friendly products, and recycle ability. The respondents were asked on consideration for product quality. Their reply includes durability, international standards for products and services, products meet customer requirement, and customers and their rights. The respondents were asked about what different things the company does to improve the environmental conditions. The respondents replied that the company does things that include re-cycling, reuse, product safety, and waste minimization. By doing these things the company can prevent the different problems brought about by oil creation and usage. The company can also have a better image towards its clients and the society.
CSR strategies
Companies can make use of different strategies to show that they have corporate social responsibility. By showing that they are responsible and are socially active more people are encouraged to buy the different things the company offers. Two things can show that the company has corporate social responsibility. This includes engaging in recycling and waste minimization.
Recycling
Material and energy utilization can be improved by reuse in the same or another system. This avoids the energy and waste costs of mining or creating virgin materials. The potential savings from this have always been realized for many expensive materials, which have been recycled for decades or centuries. There is now the opportunity to extend the principle into all business sectors, including the manufacturing, construction, office, retail, and service sectors, as well as to individual households. It is important to realize, however, that eco-efficient recycling is that which maximizes the financial value of materials and minimizes the environmental effects of their processing. Recycling is environmentally unproductive when the amount of energy, materials, and pollution used in collecting, preparing, and processing the recyclate exceeds the impact of the system that delivers the primary materials. This can be determined by a life cycle analysis (LCA).
Financial costs and benefits can be assessed by traditional methods. Of course, there are situations where recycling is environmentally justified but unprofitable. It is difficult for individual companies to take action in these circumstances; experience suggests that the best response is some combination of partnership with other companies, communities, or governments and / or redesign of products to change the economics ( 2000). There are also different kinds of recycling. One option is to reuse components or materials.
This retains the value created by their original manufacture and avoids the environmental impact associated with making them suitable for other uses and with producing replacements. Another is remanufacture, which also has these benefits albeit with the higher cost and impact associated with the remanufacturing processing. Four further options are recycling the material to an alternative use, incineration to utilize its energy content, composting, and biogasification. The best option for a particular situation will vary, for example, if reuse, remanufacturing and recycling involve long-distance transport of low-value materials (2000).
Companies such as Hewlett-Packard and Xerox have certainly found that reusing equipment and parts makes both environmental and business sense. Other electronic manufacturers are likely to follow them as economic incentives are joined by take back legislation making them responsible for the final disposal of their products. Hewlett-Packard, for example, created its Hardware Recycling Organization to process excess products and parts into useful service parts by disassembling and refurbishing them. This program improves HP’s service levels by increasing the availability of parts, while lowering costs. Parts that cannot be used for service are sorted and diverted to lower-level; noncompetitive recovery channels ( 2000).
Waste minimization
Reducing the amount of waste produced at the source is the only permanent and practical solution to the myriad of problems caused by environmental pollutants. Additionally, pollution prevention and designing for the environment makes economic sense; today’s generators are tomorrow’s potentially responsible parties with legal liability even if current regulations are followed. Pollution prevention means source reduction. Waste minimization means the reduction, to the extent feasible, of any solid or hazardous waste prior to any treatment, storage, or disposal. Waste reduction means the reduction of volume, and or toxicity, of waste after the waste has been generated and prior to disposal. The waste management hierarchy places pollution prevention or source reduction as the top priority in waste management decisions ( 1997).
The waste management hierarchy is source reduction followed by recycling. If these two preferred options are not possible then waste treatment should be considered before the final and least preferable option of disposal is considered. Pollution prevention and waste minimization techniques can be broken down into two major categories: source reduction and recycling. It should be pointed out that waste minimization does not include such processes as incineration, treatment, storage or disposal. Source reduction and recycling should always be considered before treatment and/or disposal. Source Reduction includes inventory control, improved housekeeping, production/process modifications, product substitution or reformulation, waste segregation and new uses ( 1997).
Conclusion
In a globalizing world, business leaders will need to be more pro-active and progressive. They cannot rely on their business and trade associations that are so often held back by the slowest ship in the convoy, national interests, legalistic defense of rights and lack of vision. Business activities have an impact on the environment. This occurs through pollution, the modification of ecosystems, introducing exotic species and chemical compounds, genetic engineering and irreversible physical changes. An interview was made and the respondents were asked about what they think among corporate governance, business ethical principles, environment compliance, disclosure environmental and social report, product integrity, community investment, stakeholder dialogue, financial performance, and supply chain security shows that the company is socially responsible. Among these things the respondents believed that business ethical principles, environment compliance and product integrity showed that the company is responsible. The respondents were asked the different things the company does to improve the environmental conditions. The respondents replied that the company does re-cycling, reuse, product safety, and waste minimization.
References
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