Restoring Trust is a Must as BP Deals with Oil spill

Oil gushing into the Gulf of Mexico from a deepwater well now dwarfs the amount spilled when the tanker Exxon Valdez ran aground in 1989. An estimated 2.52 million gallons of oil daily have spewed out of the gaping hole in the Earth’s crust left by the explosion of the Deepwater Horizon rig. Attempts to stanch the leak have failed repeatedly, and they are beginning to look increasingly desperate. The latest news is that the hole won’t be permanently plugged until August at the earliest.

BP has apologized for the environmental catastrophe and vows to clean up every last drop of oil. However, an outraged public is skeptical of the company’s commitment and of its ability to handle the crisis. As British Petroleum embarks on a plan to contain the spill and limit its pollution, how can the company regain some semblance of trust?

1) Confront Reality

BP’s credibility already has been battered by ill-conceived attempts to minimize the scope of the oil spill. Initially, BP reported that 5,000 barrels of oil were seeping into the Gulf each day. Independent analysts have placed the number at 12,000 to 19,000 barrels. BP also promised the ecological impact of the oil leak would be modest, but now all signs point to widespread damage of marshes and undersea habitats. Whether intentional or unintentional, the misinformation released by BP has made the public wary of the organization’s intentions.

In addition, BP’s plans to halt the leak have taken longer and been less effective than the company communicated. By overestimating their ability to stem the flow of oil, BP has come across as incompetent. To outside observers, the company appears to be relying on luck and hope, rather than sound strategy, to plug the well.

Making accurate statements and providing the public with a candid assessment of the situation are vital steps in restoring trust. British Petroleum can no longer afford to downplay the extent of the oil spill. Nor can it offer false hope in a quick fix. Its communication must be cautious and measured so that it doesn’t set unrealistic expectations or make promises on which it cannot deliver.

2) Take Responsibility

The mess in the Gulf of Mexico would be an even bigger stain on BP if the oil company chose to abdicate its responsibility in the matter. Initially that seemed to be BP’s course of action. President Obama expressed his dismay at the eagerness of BP to assign culpability to another party for the drilling rig disaster. “I did not appreciate what I considered to be a ridiculous spectacle during the congressional hearings into this matter. You had executives of BP and Transocean and Halliburton falling over each other to point the finger of blame at somebody else. The American people could not have been impressed with that display, and I certainly wasn’t. “

To its credit, BP has since apologized for the disastrous oil spill, and at least rhetorically the company appears to have shouldered the burden of finding a solution. However, for BP the responsibility only begins by stopping oil from spewing into the Gulf of Mexico. To rescue its tarnished image, BP would be wise to devote resources over the upcoming decade to alleviate the environmental scars left by the spill.

3) Make Restitution

Plugging the leak and containing the existing oil slick have to be the first priorities for BP. After that happens, cleanup and protection of the environment will take center stage. However, BP’s irresponsibility also has had adverse financial impact on the federal government, state governments, the Gulf Coast hospitality industry, fisheries, and more.

Assuredly, BP will face steep fines for its negligence in allowing the oilrig explosion to happen and to escalate into an environmental catastrophe. Yet, to win back trust BP might want to consider paying back more than the mandatory penalty. Trying to extricate itself as cheaply as possible would not sit well with the public.

In 2009, a down year for BP, the company still raked in $14 billion in profits. Executives at BP ought to dig deeply into the corporate coffers to go beyond the imposed fines in making restitution to the thousands of people who have been impacted by its failings.