Exxon Valdez Spill 1989

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History

Public relations as a distinctive business tool got its start in the early 0th century with help from the “father of public relations” Edward L. Bernays, nephew of Sigmund Freud. Public relations became considered even more essential as consumers and investors got increasingly savvy and media-connected. The formal practice of what is today called public relations is less than 100 years old. With the initiation of the hostile takeover era in the 170s and the swelling interest in the stock market of the 180s, companies became more involved than ever in public relations as a means to boost stock price and shape public opinion of their corporate image. More PR firms began to specialize in publicity to the financial community, also called investor relations. However during its relatively brief history, public relations has been defined in many widely differing ways. Later on as public relations was recognized and employed by more organizations, definitions began to include

• the need for research prior to initiating actions, careful planning and thorough evaluation or measurement of results

• multiple audiences or publics




• its role as an essential function of management

• public participation, mediation, conciliation, arbitration and accommodation as important tools

• the need for long-term commitment

Many of these definitions were lengthy, unclear and had a tendency to describe more of what public relations did than what it is. In 188, in an attempt to solve this dilemma, the governing body of the Public Relations Society of America formally adopted a definition of public relations which has become a widely used definition Public relations helps an organization and its audience adapt mutually to each other. In this definition, the essential functions of research, planning, communications dialogue and evaluation are implied. Key words are organization rather than the limiting implication of company or business, and publics which recognizes that all organizations have multiple publics from which they must earn consent and support” (http//www.prssa.org).

Elements of Public Relations

• Industry Relations - Relating with other firms in the industry of an organization and with trade associations.

• Employee/Member Relations - Responding to concerns, informing and motivating an organizations employees, its retirees, members, and their families.

• Community Relations - Continuing, planned and active participation within a community to the benefit of both an organization and its community.

• Public Affairs -Developing effective involvement in public policy, and helping an organization adapt to public needs, wants and expectations.

• Government Affairs -Relating directly with legislatures and regulatory agencies on behalf of an organization. This is most often defined as lobbying in Washington D.C. for the benefit of an organization and/or the public.

• Issues Management - Identifying and addressing issues of public concern in which an organization is, or should be, concerned.

• Financial Relations - Creating and maintaining investor confidence and building positive relationships with the financial community; also, sometimes known as Investor Relations or Shareholder Relations.

• Counseling - Providing advice to management of an organization concerning policies, relationships, and reputations; in effect, what should we do”?

• Research - Determining attitudes and behaviors of the public in order to plan, implement and measure activities to influence or change the perceptions, attitudes and behavior of the public.

• Media Relations -Relating with communications media and seeking publicity or responding to their interest in an organization

• Development/Fund Raising - Demonstrating the need for and encouraging an organizations members, friends, supporters and others to voluntarily contribute to support it.

• Special Events and Public Participation - Stimulating an interest in a person, product or organization by means of a focused happening; also, activities designed to enable an organization to listen to and interact with it’s audience.

• Marketing Communications - Combination of activities designed to sell a product, service or idea, including advertising, collateral materials, publicity, promotion, packaging, point-of-sale display, trade shows and special events.

With the rise of everyday news connectivity, and especially the explosion of press covering business, public relations has become an increasingly important part of doing business over the past couple of decades. Public relations came into being in the 0th century. It was often employed by industries that were fighting negative public perceptions � tobacco firms, railroads, oil companies and the like. Public relations was employed by big corporations in the Progressive era faced with public unease � often fueled by an aggressive press � with the changing economic and social realities of America in the early 100s. Companies sought to control and direct public opinion toward positive images of big business. If no public opinion were in existent then the public relations firm would try to create an opinion.

Below I have gathered some American corporations’ reasons for turning to public relation firms or creating their own to help spare their corporate image and deal with unfortunate mishaps or negligence. This information was gathered from public relations online at (http//www.public-relations-online.net/history.htm)

187

General Electric creates a publicity department

17

AT&T Appoints Arthur Page as its first vice president of Public Relations

145

US Government announces, in a carefully crafted press release, that an American plane dropped an atomic bomb on Hiroshima



160

Edward Bernays leads an effort to inform the public about the dangers of smoking through a massive campaign

18

Six people in a Chicago suburb who took Tylenol capsules die of cyanide poisoning, causing a PR nightmare for McNeil Labs and Johnson & Johnson

18

Tanker Exxon Valdez runs aground in Prince William Sound in what becomes the largest oil spill in US history

1

A report breaks that a syringe is discovered in a can of Pepsi; Pepsi responds by calling for direct and immediate action

1

Anheuser-Busch launches public-service campaign against driving under the influence of alcohol

Exxon-Mobil Valdez Oil Spill

How does a company recover from negative media publicity when their oil tanker grounded on Bligh Reef, spilling nearly eleven million gallons of oil into the biologically rich waters of Prince William Sound, Alaska? This is the same question the executives of Exxon Corporation were asking themselves once they received word that one of their oil shipping container’s grounding had resulted in the largest oil spill known. After the Exxon Valdez ran aground in 18, causing one of the worst environmental disasters ever, company officials refused to comment to the public for days. Eleven million gallons of crude oil spread across 1,500 miles of coastline is not an easy problem to fix, hide or face the public with. The spill ended commercial fishing for several years, fouled area wildlife and left enduring scars on the mind of towns and villages around the Sound. Researchers who studied Cordova found a place battling depression, divorce and evacuation similar to ground zero in New York City. Among all the plaintiffs since the case began, 567 have died, more than 7 got divorced, more than 00 have filed for bankruptcy and more than 5,000 liens have been filed against individual shares by creditors.

According to the environmental organization Greenpeace, “Hill and Knowlton a reputable and world known public relations firm handled the damage control operation after the Exxon Valdez oil spill in Alaska. Hill and Knowlton acknowledge that Exxon is one of its clients but denies any involvement in the public relations campaign after the Exxon Valdez spill” (http//webhome.idirect.com/~rouleau/hcorp.htm)

Hiding behind the advice of lawyers, Exxon refused to admit the extent of the spill. Eventually Exxon launched a billion-dollar cleanup operation that involved scrubbing hundreds of miles of polluted beach and poisoned wildlife by hand. This cleanup raised the question of whether this was an appropriate environmental response or merely a public relations ploy to make the company look better in the eyes of the Alaskan community and World. After Exxon Corporations initial billion-dollar investment for cleanup was started the organization was then entangled in a legal battle with its insurance companies because they refused to reimburse Exxon for cleanup costs. The insurers argued, in part, that the massive fight escalating against the worst oil spill in U.S. history was nothing more than an expensive public relations exercise. This is a very conceivable argument, but Exxon had a responsibility to save their corporation by putting everything extra they had into the clean up process.

Essentially, Exxon wanted Lloyds their insurer and about 50 underwriters to pay $ 850 million in cleanup costs that it claimed were covered under its Global Corporate Excess policies. Because Exxon alleges that the insurers acted in bad faith in denying the claim, it is also attempted to seek damages, which under Texas insurance statutes are set at triple the claim plus attorneys fees. Exxons claims are for a large sum of money, but the size of the claim cannot justify the defendants’ breach of their duty of good faith and fair dealing. In particular, the insurers assert, the underwriters allege that Exxons expenditures were made solely as a prophylactic measure to protect its corporate public image and profits rather than for any other purpose (http//www.lexis-nexus.com Billion-Dollar Battle Looms Over Spill Costs).

To date, Exxon -- one of the world’s largest corporations with annual profits greater than the gross domestic products of most smaller nations -- says it has spent $ .5 billion on cleanup-related costs and continues to incur expenses. Attorney generals from 7 states have signed a letter urging Exxon Corp. to end its court battles and appeals saying Exxons use of its economic strength to delay, and in many cases to deny, justice to the 40,000 people it has injured by the Exxon Valdez spill raises a significant concern, the attorneys wrote. In Cordova, Alaska a former fisherman Linden OToole, one of the people waiting for a damage award, said the pressure from so many attorney generals is probably Exxons worst nightmare. They basically have invested in a PR campaign, and I think most Americans until recently havent realized Exxon hasnt paid us, she said, I think the world deserves to know what an unethical company Exxon is” (http//www.lexis-nexus.com Attorneys general call on Exxon to end appeal, pay spill verdict).

Exxon acted in poor faith when dealing with this matter by not admitting to its mistake and trying to dodge and avoid the total costs associated with problem. Many fisherman and families have went out of business and into debt in this town and other surrounding coastal towns in Alaska as a result of this large oil spill and environmental disaster. I feel that Exxon should have fully accepted its negative externalities and cared for the community, villagers as well as the waters it contaminated in full. This is a company with net profits near five billion a year, and they should have came straight forward with the residents effected, the world and admitted their guilt. They should have then apologized, paid out the lawsuits brought against them in an amount near $5. billion for punitive damages plus the $.5 billion for cleanup costs and avoided the appeals court. If this company would have acted in good faith and taken responsibility for their negligence, then they could possibly have increased their reputation in the oil industry and came out looking like a better environmental company in the eyes of the world. We cannot ignore the fact that this has happened and it was an accident, but we can only hope that the Prince William Sound fully recovers along with the wildlife and citizens affected. Out of even bad things, good things do happen, said Steve Pennoyer, director of the National Marine Fisheries Service in Alaska. One of the main legacies of the spill has been the ability to fund ecosystem research into the 1st century, Pennoyer said” (http//www.lexis-nexus.com. Conference looks at effects of oil spill).

Works Cited

What is Public Relations. About Public Relations. 17 Mar. 00

http//www.prssa.org/newsroom/aboutpr.htm#Is.

The History Of Public Relations History. Public Relations Timeline. 17 Mar.

00 http//www.public-relations-online.net/history.htm .

The Corporate Web. Hill and Knowlton Canada Ltd. 17 Mar.

00 http//www.webhome.idirect.com/~rouleau/hcorp.htm.

Freemantle, Tony “Billion-Dollar Battle Looms Over Spill Costs

Exxon Corp. Trying to collect from it’s Insurance Companies.” Anchorage Daily News 5 Sept. 15, Academic Universe. LEXIS-NEXIS. 6 Sep. 15 http//web.lexis-nexis.com/universe/.

Clark, Maureen “Attorneys general call on Exxon to end appeal, pay spill verdict

The Associated Press State & Local Wire” 5 Mar. 1, Academic Universe. LEXIS-NEXIS. 6 Mar. 1 http//web.lexis-nexis.com/universe/.

Clark, Maureen “Conference looks at effects of oil spill

The Associated Press State & Local Wire” Mar. 1, Academic Universe. LEXIS-NEXIS. 4 Mar. 1 http//web.lexis-nexis.com/universe/.

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