Corporate Responsibility-A Case Study of British Petroleum (BP)

Added : ( Mon Apr 18 2005 )

As part of their ongoing programme Article13, the leading corporate social responsibility experts, have researched and released a Case Study of British Petroleum (BP).

Below is a synopsis of the Case Study, which can be accessed in full at www.article13.com.

Why is Article 13 featuring this company?
BP has been operating in China for three decades. There is evidence that making a long-term commitment in partnerships is enabling BP to match ethical business and Chinese growth.
BUSINESS INSIGHTS
What do they do? Main activities are the exploration and production of crude oil and natural gas; refining, marketing, supply and transportation; and the manufacture and marketing of petrochemicals with a growing presence in gas and power and in solar power generation.
Vision: "Our aim is to be successful in everything we do by delivering outstanding performance. The test of success will be our ability to generate strongly competitive returns in a sustainable manner that aligns us with society." (company website)
“BPs long-term goal in China is a "partnership for progress" which reinforces economic and social development, produces shareholder value and aligns our business values and policies with local and national aspirations.” [1]
INSIGHTS ON HOW THEY HAVE BEEN ADDRESSING SOCIAL AND ENVIRONEMNTAL ISSUES OF OPERATING IN CHINA
BP has been operating in China for three decades and has invested over $3 billion in commercial projects, making BP one of China’s largest foreign investors. Since 1973, BP’s work in China has been through three distinct development stages. Initially, growth came from chemicals licensing and marketing. In the 1980’s this developed into onshore and offshore exploration and production and from the mid 1990’s, BP has been engaged in large-scale equity investment and manufacturing. To indicate the scale of this investment, a sample of their projects includes:
• PTA (polyterapthalic acid, a component of plastic manufacture) production growing from 350,000 tonnes a year to 1.2 million tonnes a year at Zhuhai, in the Pearl River Delta. The plant is a joint venture between BP (85 %) and the Fu Hua Group (15 %) and came on stream in September 2003.
• A $2.7 billion integrated petrochemical complex under construction outside Shanghai which is expected on stream in 2005.
• A 500,000 tonnes a year plant in Nanjing, Jiangsu province expected to come on stream by the end of 2006 supplying acetic acid for use in such products as fibres, paint, adhesives, pharmaceuticals and printing inks.
• A 40% holding in the Nansha oil terminal in Guangdong with over 360,000 cubic metres of storage space.
• BP has signed joint venture contracts and articles of association with two Chinese retail service station ventures which will each acquire, build and operate 500 retail service stations by 2007.
How is BP ‘breaking the cycle’?
Alongside these conventional operations in fossil fuels, BP is matching the high profile stance on renewable energy and combating climate change the company presents in Europe.
A specific mechanism that BP has set up to break the cycle of 'business as usual' is a Regional Ethics Committee (REC). RECs, which BP has established around the world, aim to reinforce the focus on ethical conduct and review ethical dilemmas.
How did partnerships facilitate the transformation?
Working with partners is a core element of every one of the projects and investments BP has made in China. BP works with China’s three major integrated oil companies - Sinopec, PetroChina and CNOOC - as well as a number of local partners.
BP has been working hard at political partnerships too. In May 2004 Chinese Premier Wen Jiabao visited BP's London HQ to mark the signing of a number of major business agreements with Chinese business partners.
END GAME
So far, BP is balancing its massive commitment to China and its growing reputation for corporate responsibility. It is achieving this balance partly through the scale and duration of its commitment to its Chinese partners, a scale that encourages good faith and movement on both sides. It is also consciously mapping out the challenges and dilemmas that arise from the cultural collision of BP, Sinopec and others, finding a route through previously uncharted corporate territory. Thirdly, BP is taking active steps to change the technology underpinning its current way of doing business, using technology as a lever to gain market advantage and avoid being pigeonholed as an old empire, resource dependent company.
Sources:
• BP company website
• World Business Council for Sustainable Development
References:
[1] Dr Gary Dirks, Executive President, BP China, The Economist conference on environmental policies and practices in China, Beijing, 26 Sept 2001.
Copyright Article 13 2005
Article 13 are specialist advisors in governance, business responsibility and sustainable development. We develop policy and strategy through the use of research and engagement to deliver innovation, governance and organisational responsibility. We work with companies, governments and academic institutions to meet the growing pressure for better performance, whether it be social, environmental, ethical or economic.




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