Challenges at Chevron Corporation Essay

Accounting Information System 2

Trimester1, 2014/2015

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Oil and Gas company- Texaco ( Presently known as Chevron Corporation )

1.Four chief jobs the companies are confronting during their operations.

  1. Texaco was accused for doing environmental desolation and wellness issues in Ecuador
  • In 1993, an accusal was made by Ecuadarian- American conservationist attorney against Texaco on for abandoned of a billion gallon effluent, rough oil ( with heavy metal and toxic ) , inappropriate killing, building of oil roads development transcending 2.5 million estates of wood. Their operation had besides caused extended devastation to the Amazon societies. The local population relies on the river, rain H2O for bathing, imbibing, and fishing. Subsequently, the native communities were infected by several diseases such as, concern, malnutrition,
  • However, on the other manus, Texaco has refuted the all allegations made in its official web site. Texaco has invited several experts to independently analyze the accusals made. After a few of the world’s outstanding epidemiologist, scientific and medical professionals made a survey on this affair, they came to a decision that it is undistinguished that there are direct connexion of oil related wellness hazard from the countries. Besides that, research workers had besides working together with the complainant lawyer and environmental militant to further analyze the statistics and claims on Texpet’s old operation have triggered the happening of several diseases. Alternatively, NGO and a figure of international development bureaus has conclude that the factors of disease happened are due to hapless cleanliness, malnutrition, contaminated H2O, deficient medical installations and wellness attention forces.
  • Besides, Texaco has besides stated out some facts that were tried to undercover by the plaintiff’s lawyer. For illustration, the oil sample used by the complainants was non disposed by Texaco Petroleum Company, which besides indicates that it was out of the company duty. In add-on, the plaintiff’s lawyer has been seeking difficult to impede the civil tribunal of Pichincha ( for seven times ) for inspecting the chief research lab of complainant in order to find whether it is eligible to execute dirt and H2O analyses. Furthermore, Texaco Petroleum Company’s killing was effectual as confirmed by the authorities of Ecuador.
  1. Texacounrealizedkilling duty
  • Texaco has been the lone operator in Ecuador since 1964 to 1990. That part was deemed to be environmental catastrophe zone of all time since 1980s. Although Texaco had spent $ 40 million in mid 1990s to rectify the country but it was really deficient. During Texaco operation in Ecuador, most of the transmittal systems of oil had obsolete but no replacing was made due to the high budget. Thereby, spills and taint occur. Texaco was really the lone operator of oil grant in Ecuador whom held the determination doing authorization including disposal of produced H2O. However, Texaco had made much attempt to get away its duty by whipping boy Petroecuador. In fact, Petroecuador has inherited the unequal substructure from Texaco. In 1991, Texaco was in patterned advance of go forthing Ecuador while Petroecuador has stepped in to take over its former operations.
  1. Involved promotional cozenage andfraudulentdealing
  • Chevron has bought Texaco in twelvemonth 2000. At first the merged company was named ChevronTexaco. Subsequently in 2005, the company name changed back to Chevron while Texco is still one of its trade names. In 2009, Chevron has received many ailments about persons forging the name of Chevron did several fraudulent concern dealing. The culprit claimed that they were pull offing publicity provided by Chevron by inquiring the victim to make full up a simple entry signifier which can be in exchange with an “insurance payment’ . When an insurance payment is requested, the mark was required to pay the insurance installment through single cheque or money order. In fact, Chevron knew nil about it and has neither involved in offering such publicity nor hired single to run the publicity.
  • Besides that, there were besides some others similar promotional cozenages like fabricated occupation offer cozenage, grant and contribution cozenage, lottery victor cozenage, and procurance cozenage that made by 3rd parties which have no relation with Chevron at all. All of the cozenages palm off Chevron name to victimize the populace.
  • Such cozenages had earnestly affected the celebrity of Chevron particularly its credibleness and unity.
  1. Texacos operation patterns was non in conformity with the regulations and ordinance
  • Ecuador’s authorities has required Texaco to follow modern and efficient machinery in its operation and besides prevent the pollution of lands, Waterss and poses. However, in 1942, Texaco has dumped the toxic “water of formation” which has been interrupting the jurisprudence. Subsequently throughout 1970s to 1980s Texaco illicitly made unfastened air toxic waste. In add-on, the company had besides disposed contaminated waste H2O.

2.Assorted controls that have been/ could hold implemented to turn to those jobs.

In today’s society, companies should implement an effectual and appropriate internal control to guarantee firm’s sustainability. Internal control is defined as the procedure implemented by the board of manager, direction to supply sensible confidence. The aims of internal control include precautions assets, maintains records, supply accurate and dependable information, promote and better operational efficiency, promote attachment to order managerial policies and comply with applicable Torahs and ordinances. Internal control will besides increase the function of corporate administration which provides better relationships among stakeholders.

Since Texaco Company has accused for environmental desolation and wellness issues, Texaco Company has made attempt to stay in full conformity with applicable governmental ordinances. It includes Comprehensive Environmental Response, Compensation and Liability Act, the Environmental Protection Agency. Harmonizing to the one-year study for twelvemonth 1996 of Texaco, it states that the company has identified the possible environment, wellness and safety ( EHS ) hazards and design its installations and plans to minimise or extinguish them. It has trained the employees and holds them accountable for sound EHS patterns. The advancement includes seting safety foremost, cut downing chemical release, cutting emanations and exigency readiness.

By using advanced engineerings, Texaco has installed low NOx ( nitrogen oxide ) burners at the Pembroke refinery in Wales which have reduced significantly emanations of both sulphur dioxide and NOx. The company is associated with more than 30 oil spill co-ops which had helped to cut down the figure and volume of leaks and spills and keep speedy response when incident occurs.

Harmonizing to one-year study at twelvemonth 2013 of Chevron, the company has applied Environmental, Social and Health Impact Assessment ( ESHIA ) procedure. The procedure provides a systematic and risk-based attack to identifying, measuring and pull offing potentially important impacts. Texaco has besides implemented Operational Excellence Management System ( OEMS ) which manage the procedure of safety, personal safety and wellness, the environment, dependability and efficiency. Texaco Company are engaged to assorted international, federal, province and local environmental, wellness and safety Torahs, ordinances and market-based plans. There ordinances are intended to turn to concerns about nursery gas-emissions and planetary clime alteration.

Then, for the accusal of Texaco non accordance to regulations and ordinances when practising operation, Texaco has stated that the company is in action of control and suspension of pollutants into the air and H2O and to the appropriate recycling or disposal of Waterss. Included in this internal control system are Corporate Conduct Guidelines which require that all employees maintain the highest degree of ethical criterions. In the undermentioned old ages, Texaco has besides adopted the usage of environmental impact reappraisals, engineering and the design of operations to minimise effects.

Harmonizing to the one-year study of Texaco Company, there is no relevant information stated to get the better of oil spill clean-up. The company can pattern runing in conformity with the regulations and ordinance. For illustration, the company should carry on concern conformity to Environment Protection Agency ( EPA ) . Its intent is to protecting human wellness and the environment by composing and implementing ordinances based on Torahs passed by Congress. Texaco should besides bear the duty of clean-up by following the jurisprudence, Oil Protection Act ( OPA ) . By the act, it improved the state ‘s ability to forestall and react to oil spills. Following, there are assorted advanced response mechanisms available for commanding oil spills and minimising their impacts on human wellness and the environment. Texaco should implement the oil spill techniques such as mechanical containment or recovery. Mechanical containment is used to capture and hive away the spilled oil until it can be disposed of decently. The company should get some recovery equipment such as natural and man-made sorbent stuffs.

In order to forestall promotional cozenage and deceitful activities, internal control of each system has to guarantee a consistent attack across all sections to do the program is applied uniformly. All Departmental Heads, Managers, Team Leaders or equivalents are to hold an apprehension of the Fraud Control Plan content and the duties allocated under the program so that they wouldn’t have contradict the direction towards the employees. Besides that, communicating of senior direction ‘s strong committedness is indispensable to guarantee there is regular communicating to all staff advancing conformity with the Fraud Control Plan and attachment to the Fraud Prevention Policy. Furthermore, handiness to the Fraud Control Plan is required to allow all staffs available through the Polytechnic ‘s intranet. In add-on to that, regular reappraisal of the Fraud Control Plan could work out the job as the Polytechnic is committed to reexamine its Fraud Control Plan every two old ages to guarantee that it remains up-to-date and relevant.

3. Argue why the jobs are still happening despite the internal controls being implemented.

Internal control fundamentally was known as a procedure for guaranting the accomplishment of an organisation ‘s aims in operational effectivity and efficiency conformity with Torahs, ordinances and policies. A wide construct, internal control involves everything that controls hazards to an organisation. It provides a agency by which an organisation ‘s resources are directed, monitored, and measured. It plays a major function in observing and forestalling fraud and protecting the organisation ‘s resources.

There are in fact a few grounds why the jobs are still happening despite the internal controls being implemented. One of the factors will be failure in the information and communicating faculty of internal control to present complete and accurate end product because of deficiencies in seasonableness, completeness, or truth. The failure to obtain seasonably and accurate uniting information from distant locations that is needed in order to fix the fiscal statements. For illustration, Texaco’s operation patterns were in conformity with the regulations and ordinance. Though they had purchase the machinery to forestall the pollution, the accomplishment and cognition of runing the machine was non efficaciously spread among the operation squad and doing the workers to hold less or uncomplete cognition of utilizing the machine and yet pollution are still happening after the acceptance of the machinery. Besides that, the waste disposal squad might hold deficiency of supervising by the upper direction and yet they applied their ain method of disposing the toxic waste by all agencies and do the forbidden unfastened air toxic waste in 1980s.

The other ground why the job still arises after execution of internal control is unequal design of internal control over a important procedure. Take Texaco as illustration, the can be clearly seen as Chevron has received many ailments about persons forging the name of Chevron did legion fraudulent concern minutess. The culprit claimed that they were pull offing publicity provided by Chevron by inquiring the victim to make full up a simple entry signifier which can be in exchange with an “insurance payment’ . Temuco has failed to safeguard its plus from being misused by a 3rd party after unifying and doing public to believe Texaco is a cozenage instead than a good investment company. This happens because the company is non watchful that the 3rd party is really utilizing the information they can obtain from the company to convert the populace to put in it. The design of the internal control is non sufficient as they have to lose out those who are really stealing company information for ain beneficial.

Above all the ground, homo are prone to doing error, no affair how good the internal control are it won’t the unflawed solution for all the job. Each solution are like a two border blade, every solved job will make a new job ; as each solution won’t able to fulfill all the people and job. Beside this, the head set and civilization of an person will straight impact the solution result. Take an illustration, a short-sighted thought determination shaper will be given to believe of a solution that merely could impermanent solved a job but as clip elapse, that job will originate and history will reiterate itself once more. Worlds are emotion existences, and inducements are the biggest seduction for us to do error and even fraud. Those who obsessed with pecuniary deluxe life style will hold a higher possibility to affect in graft and other fraud linked to pecuniary inducement.

As for decision, there isn’t no perfect solution or internal control to work out all arise job, the lone solution that is near to flawlessness is to improvize and accommodate to the job and seek to fulfill the bulk and set away self involvement in work outing job.


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