Ashland Oil Company example essay topic

James M. CrunkletonWeek Six: Ashland Oil Inc. Case Study Excellent Press Release. Good ethical analysis, but pretty light on legal analysis. Watch sentence construction, review assignments before submittal.

25 points. Ashland Oil Case Study On Saturday, January 2, 1988 at 5: 02 pm. a four million gallon storage tank at the Flore ffe terminal outside of Pittsburgh, Pennsylvania, collapsed while being filled, releasing a 3.9 million gallon wave of diesel fuel. As the fuel gushed, it slammed into an empty tank nearby and surged over containment dikes into the surrounding properties creating the first major oil pollution accident for Ashland Oil, Inc., (AOI) in its 64 year history. By nightfall, nearly three quarters of a million gallons of oil had spilled into the Monongahela River, threatening the drinking water supply of communities in Pennsylvania, Ohio, and West Virginia, as well as the safety of nearby residents.

In the end Ashland was fined 2.5 million dollars and later sued for thirty million dollars. The 1970 National Environmental Policy Act of 1970 makes it federal policy to consider the environmental impact of various activities. When the project engineers at AOI constructed the storage fuel tank with old steel that wasn't properly tested before filling it with the diesel fuel they obviously broke this law. Local legal laws were also broken as AOI hadn't filed a permit to even build the tank and industry standards were not followed in the testing of the tank before filling. They did file the permit request, they never received the written permit, and the permit listed "new" steel in the tank's construction. The Clean Water Act requires a permit before pollutants can be discharged into navigable waters from any point source, regardless of whether the discharge existed prior to the legislation.

Criminal sanctions may be imposed if pollutants are discharged without a permit. Although this act is specific all for companies that intentionally discharge waste into water, the inadvertent act of discharging oil in the water system due to negligence applies to AOI. As a company AOI had the "Duty to use Reasonable", (use reasonable) in building and filling a fuel storage tank, understanding the ramifications if it in fact didn't. The company has the duty to use reasonable care in the performance of their duties. The type of work the company performs determines the extent of the company's duty of care. AOI also had the Duty to Communicate Information, this is one of essential aspects of the business community's relationship with society, government agencies etc.

The duty to disclose information was at issue when AOI initially stated that oil hadn't reached the "Mon" and failure to fully and truthfully inform media and outside agencies about the tank in question. Based on my observations of the many infractions by the Ashland Oil Company, the many openings left by the company and their legal ramifications from extremely poor decision making, cover-up and non-control / follow -up from higher management, exposed the Ashland Oil Company to over thirty-two million dollars in legal costs. A fundamental utilitarian approach to this case would be; if an industry pollutes the environment, it has caused a defect in the market. The company's products no longer reflect the true cost of their production. The result is a misallocation of resources, a rise in waste and an inefficient distribution of commodities. Consequently, society as a whole is harmed in its overall economic welfare declines.

Utilitarian therefore, argues that a company should avoid pollution because they should avoid harming society's welfare. Applying ethics to this case from a Utilitarian concept then calls for AOI, since they did pollute and cause damage to society to remedy the situation. The remedy for external cost, according to the utilitarian concept is that the cost of pollution is internalized. AOI implemented this ethical approach as they paid for pipes to the Allegheny River for fresh water and the cost of cleaning of the oil spill and litigation costs.

When applying the Kantian theory to the AOI case, it seems quite easy. This theory exemplifies the " Golden Rule" on a duty-based standard. Therefore, you are to act in accordance to the way you'd expect others to act toward you. Utilizing a Kantian ethical analysis in reference to the AOI would pose questions such as: Would I want oil spilled in my city due to gross negligence on my part Would I want everyone dealing with me to refrain from identify defects in equipment I was utilizing, like I did with the storage tank Applying a communitarian view, that we have an obligation to exercise special care toward those a particular community that we do business in and that patronizes and supports our business; According to this view, AOI had an interdependent relationship with the community it did business in and should have exercised due care. According to this care view, the moral task isn't to follow universal and partial moral principles, but instead, to attend and respond to the good of particular concrete relationships.

I think after some internal "cya's" and their lying were weeded out that AOI in fact attempted to enforce this ethical principle. Ethically the company did a very poor job initially at controlling the information flow from their representatives to outside agencies. The company did simultaneously an excellent job at doing everything they could to minimize the environmental damage from the spill. Also, if I'm the CEO, I'm on the scene of this accident until its resolution.

Not only for political purposes, but also for moral and public relations purposes, This accident must be viewed by all as my number one priority. The case read as though the CEO was basically forced to come to Pittsburgh and see the accident scene firsthand. Ethically speaking the company should pay for all damages due to the accident, be fined by the federal, state and local governments and pay a settlement to the community it damaged. The company should also learn from the incident and take the proper precautions to ensure the incident doesn't occur again. The evidence that supports my reasoning for this case was I followed it in the newspapers to its conclusion in 1988 as my family and I are from "right down the road" from where the oil spill occurred. The general perception of the "Mon Valley" was the company didn't care because the general area is surrounded by old dilapidated non-working steel mills and Braddock Mill that is still up and running still pollutes the air.

This incident was viewed as just another environmental catastrophe in the Mon Valley. The biggest difference in press releases A and B are A is skewed toward an ethical disclosure and B is skewed toward a legal disclosure. There is no real ethical content in press release b; it's a "layered" document. The legal ramifications of what the CEO is stating closely covered in B. Press release A has more disclosure and is in fact more truthful, yet the legal ramifications are more obvious as the CEO admits to the many mistakes of AOI.

Press Release (Done on the Day of Spill) I greet you today with a sincere, heartfelt, apology. On behalf of Ashland Oil Company, I wish to apologize for the oil spill that occurred today. I have spent the last 24 hours meeting with my staff and reviewing the damage done by the spill. I have surveyed the area and have investigated the apparent cause of the spill. I know that several questions have been raised about the construction, testing and use of this tank, and that preliminary statements made to the press and others by Ashland Oil co. employees have come into question. I need to tell you know that some information given out by our employees was given without full possession of all the facts.

We are currently investigating the allegations raised in the press, as well as the facts surrounding the erection of this particular tank. and we will provide the public with all the appropriate background information as soon as possible. I want to assure you and the people of Pennsylvania and West Virginia that the decisions that led to this spill are regrettable. Now, let me inform you what we are doing to clean up this spill and restore water. First, we are working around the clock with EPA and various emergency clean up crews to clean up the entire area affected by the spill. We have ordered fresh water supplies to be brought immediately to the residents of greater Pittsburgh and the affected residential areas in Pennsylvania, Ohio and West Virginia. We have opened an emergency Service Center staffed by our personnel to provide information, answer questions and address concerns about the spill, the cleanup efforts and additional services available to citizens of the areas.

We will do whatever we can to restore the environmental quality of the Monongahela River.