A corporation is liable for the torts and crimes that are committed by its agents and employees when they are acting within the scope of their employment. Directors, officers, and employees are...
A corporation is liable for the torts and crimes that are committed by its agents and employees when they are acting within the scope of their employment. Directors, officers, and employees are personally liable for the torts and crimes that they commit within the scope of their employment. Can and should these principles be applied to the disaster at the Deepwater Horizon offshore oil drilling platform in April 2010?
The principle of liability is extremely important. It entails the composite of determinants that will hold someone responsible for actions that may go as far as breaking directly with the law. However the law can hold individuals liable for things that they do. A corporation, which is a big group of individuals, makes it a bit harder for legislators to decide how to apply to a collectivity the same rules that are applied to individuals.
The assessment of what is considered legally binding varies world-wide and, as can be imagined, there are interested investors and other parties more than willing to deflect any wrong doing from a corporation that has made a mistake of any sort.
The Deepwater Horizon explosion was, according to a final report, caused by:
- bad cement on the well
- outdated policies and regulations
- bad management from rig operators
- not enough safety precautions
The fault was shared; the rig operators (Transocean), the contractor (Haliburton), and the corporation (BP) were all fined and penalized for the tragedy with charges ranging from manslaughter, misdemeanors, and felonies. The corporation had to pay back, was banned from any further contracts, and $4.525 billion in fines agreed upon by BP and Department of Justice.
Many wondered if it all was BP's fault or the fault of the people on which BP placed the trust of their business. Yet, in this case it was more than just the government that became involved: the Clean Water Act, as well as the Natural Resource Water Assessment were part of the final decision. Additionally, President Obama's rhetoric during the events was said to be very harsh against BP, causing almost a world-wide rejection against the corporation and debate in Congress and the White House.
In reality, accountability leads to reliability. There is very little trust placed upon something or someone who is allowed to make decisions without accepting responsibility for such decisions. It all comes down to public trust, and a commitment to a job well done from the part of the corporations.