CASE STUDY Kalyn Harbin PR Cases Campaigns Professor

CASE STUDY Kalyn Harbin PR Cases & Campaigns Professor Murray

SITUATION Supertanker Exxon Valdez, second newest in fleet, 987 -feet, 
ran into the Bligh Reef in Prince William Sound, Alaska on March 24, 1989, at 9: 12 p. m. 11 million gallons of crude oil spilled covering 1, 300 miles of coastline and 11, 000 square miles of ocean.

MAP OF SPILL & TIMELINE Source: 1993 State On-Scene Coordinator's Report

FACTS The seas were calm and they had clearly marked maps. Uncertified 3 rd mate Gregory Cousins was at helm while Capt. Joseph Hazlewood had been drinking and was resting. Dead: § 500, 000 birds (90 species), including 150 bald eagles § 4, 500 sea otters § 14 killer whales § Salmon, herring, clams, mussels, seaweed No human life lost, though 4 deaths associated with cleanup Immeasurable toll on tourism & fishing industry Still known as one of the largest spills in history and is widely considered the number one spill worldwide in terms of damage to the environment. The timing of the spill, the remote location, the thousands of miles of shoreline with an abundance of wildlife all combined to make it an environmental disaster well beyond the scope of other spills.

HOW DID THIS HAPPEN? The National Transportation Safety Board investigated the accident and determined that the probable causes of the grounding were: § The failure of the third mate to properly maneuver the vessel, possibly due to fatigue and excessive workload; § The failure of the master to provide a proper navigation watch, possibly due to impairment from alcohol; § The failure of Exxon Shipping Company to supervise the master and provide a rested and sufficient crew for the Exxon Valdez § The failure of the U. S. Coast Guard to provide an effective vessel traffic system § The lack of effective pilot and escort services.

PUBLIC’S REACTION Government & gov't agencies: § Want investigation, regulation, restitution, cleanup, potential punishment Oil industry: § Hope to save face, not jeopardize operations Exxon stockholders: § Want continued financial profitability Media: § Demand immediate information, full disclosure, culpability Environmental activists: § Angry, seek restitution, participate in cleanup

EXXON’S ACTION/RESPONSE STRATEGY Decided to handle response with no outside public relations consultants Ignored criticism Dismissed interest/involvement of environmental activists Refused to acknowledge extent of problem (abiding by legal advice) Had no designated spokesperson and refused to speak openly Refused assistance from local residents & environmental volunteers to help with cleanup Fear appeal: predicting increase in gasoline prices because of cleanup cost Shifting blame: Accused Alaska & Coast Guard of causing delay in cleanup

RESPONSE/STRATEGY CONT. Two-week delay (in calm weather) before clean-up begins (now in rough weather) CEO refuses to be interviewed Mayor of Valdez, John Devens, said town was "betrayed" by Exxon's inadequate response to the spill After 6 days, Rawl made statement to media. Eventually went on TV; unfamiliar with latest Exxon cleanup plans; claimed that, as CEO, it was not his responsibility to read such reports; blamed media for making a big deal of the spill After 2+ weeks, Rawl finally visited site of oil spill Corporate claims contradicted by eyewitness accounts $1. 8 million for full-page ad in 166 newspapers; apology but no acceptance of responsibility

EXXON’S COSTS Exxon says it spent about $2. 1 billion on the cleanup effort. Exxon’s reputation was greatly damaged because of their reaction to the situation. They did not handle any part of the crisis well, making the damage even worse on themselves. They lost customers and support for their company. TONS of legal issues

ECONOMIC IMPACT OF THE SPILL In the years immediately following the oil spill, the governments funded several studies to evaluate the economic effects of the spill. The five studies funded by the State of Alaska are: A Preliminary Economic Analysis of Recreational Fishing Losses Related to the Exxon Valdez Oil Spill (December 1992) Alaska Sportfishing in the Aftermath of the Exxon Valdez Oil Spill (December 1992) An Assessment of the Impact of the Exxon Valdez Oil Spill on the Alaska Tourism Industry (August 1990) Replacement Costs of Birds and Mammals (December 1992) A Contingent Valuation Study of Lost Passive Use Values Resulting from the Exxon Valdez Oil Spill (November 1992) The studies of sportfishing activity and tourism indicators (vacation planning, visitor spending, and canceled bookings) all indicated decreases in recreation/tourism activity. The contingent valuation study estimated the lost passive use value at $2. 8 billion. The replacement cost study identified a per-unit replacement cost of various seabirds and mammals, as well as eagles.

LESSONS TO BE LEARNED In general, Exxon completely went wrong with this crisis. They did absolutely nothing to help the situation for the better until it was too late for their customers to care. A plan should have been made before hand! This way if a situation like this happens you are able to minimize the damage. § “Despite the opportunity to skim the oil before it hit the shorelines, almost none was scooped up. A response barge maintained by Alyeska Pipeline Service Company was out of service and unavailable for use. Even if it had responded, there were not enough skimmers and boom available to do an effective job. ”( Have a public relation’s professional for help, or hire a PR firm when a crisis come up. Exxon should have had professionals!

LESSON’S CONT. Take responsibility! An apology means nothing if you don’t hold your company responsible for something that they did—even if it was unintentional. Exxon failed to follow their own procedure They showed little leadership, especially when it was needed in a time like this. Failed to show concern. Failed to involve media, and even blamed media Failed to respond to activists

WORK CITED "Questions and Answers. " Oil Spill Facts. Exxon Valdez Oil Spill Trustee Council, n. d. Web. 09 Feb. 2014. http: //www. evostc. state. ak. us/index. cfm? FA=facts. QA Smith, Ron. "Exxon Valdez Oil Spill. " Public Relations, Case Studies, Exxon Valdez. N. p. , 2007. Web. 10 Feb. 2014. http: //faculty. buffalostate. edu/smithrd/PR/Exxon. htm