Corporate Responsibility


The Exxon Oil Spill – The Case of the Exxon Valdez

The Date, Time, and Location: On March 24, 1994, an oil tanker, the Exxon Valdez, was in the remote Prince William Sound located near the state of Alaska.

The Cause: A pilot guided the ship through the narrows. After completing his job, he departed and turned the ship over to the master. After the ship was steered out of the shipping lane so as not to hit any icebergs, the master turned over control of the wheel house to the third mate and instructed the able seaman to remain at the helm until the Valdez returned to the shipping lane at a prearranged point. The ship never made it to a shipping lane and hit Bligh Reef. As a result, over 10 million gallons of oil spilled into the sound.

The Investigation: What caused this accident? The National Transportation Board determined several contributing factors to the accident. 1. The third mate did not steer the ship properly. He could have been too tired from too much work. 2. The master did not navigate. He could have had too much alcohol in his system. 3. The Exxon Shipping Company did not provide proper supervision of its employees or an adequate staff for the ship. 4. The U.S. Coast Guard’s traffic system was not up to par. Recommendations were made and included the suggestion that Exxon examine the work patterns of its ship crews.

The Consequences: Thousands of animals such as birds, otters, seals, whales, and fish and their eggs were killed. Effects of the deaths are still noticeable today. Populations of wildlife are still not what they used to be. Animal mortality rates increased since their food system was contaminated. There is an ongoing battle. Effects have been projected to last up to 30 years; however, Exxon and other reports disagree. Besides the loss of marine life, many fishermen and others whose jobs were dependent on the natural surroundings of the sound suffered the loss of their jobs and their sole means of support dissipated. Additionally, the seafood production industry was hurt severely.

The Cleanup: The first attempt to clean up the spill failed. A company applied a dispersant, a combination of a surfactant and a solvent. Unfortunately, it didn’t mix with the oil because the waters were too still. Exxon, albeit slowly, began an expensive and extensive cleanup along with Alaskans, Exxon employees, and the U.S. Coast Guard. Some oil was displaced by hot water that was subjected to high pressure. This high pressure also hurt the plankton and other small members of the food chain. Regardless of the cleanup, a report by the National Oceanic and Atmospheric Administration claims more than 26,000 gallons of oil still contaminate the shores and are declining at less than four percent a year.

The Lawsuit: In 1994, a jury in Alaska decided that Exxon should pay $287 million for actual damages and five billion for punitive damages to native fishermen and businesses that suffered hardship. Exxon felt this was too harsh and the Court of Appeals ordered the first judge to reduce damages. Damages were reduced to four billion. Exxon appealed again and after several court battles, punitive damages were decreased to two and a half billion. Exxon appealed again. Today, no money has been paid by Exxon and the case is still in court. It will be heard by the U.S. Supreme Court, possibly in 2008. It is that court that will decide if Exxon should pay the punitive damages. Exxon feels that the damages are not fair because it was an accident and because the company cleaned up the oil. The plaintiffs feel Exxon should be punished for not having rested or sober employees. What will the Supreme Court think?