Business Ethics

1
Business Ethics
2
Aims of this presentation

• To define business ethics
• To give examples of ethical statements (eg from
  Trafigura)
• To apply ideas from five ethical theories
• To consider the example of Trafigura, a company
  that knowingly deposited toxic waste in the Ivory
  Coast

3
A real life example

• You are Human resources Manager of a large
  Corporation.
• You are told in confidence of imminent
  redundancies.
• Your best friend is one of those affected and
  today signs a large re-mortgage agreement on her
  house.

WHAT DO YOU DO ???
4
Business Ethics

• How we behave as individuals
• How we organise our business and manage
  relationships within it
• How we regulate and arrange business activity
  within society the laws we pass

5
Principles to apply Kant

• Autonomy freedom to choose
• Rationality thinking it through
• Motive only the good will is good
• Universalisability what if this were the norm?
• A priori truth (categorical) individual
  circumstances dont matter (hypothetical)
• Treating people as ends, not just means
• Duty not self-interest or pleasure

6
Immanuel Kant wrote

• Suppose a man does an action for the sake of
  duty alone, for the first time his action has
  genuine moral worth a moral worth beyond all
  comparison the highest he does good not from
  inclination, but from duty.
• Groundwork of
  the Metaphysics of Morals

4.2
7
For Kant lying is self-contradictory

• One example Kant used to illustrate this was a
  business one. Suppose you desperately needed
  money. Should you ask someone to lend you money
  with a promise to pay the money back but with no
  intention of paying it back? Do your extreme
  financial circumstances justify a lying promise?
  To find out, Kant would require us to
  universalize the maxim of this action "It is
  morally permissible for anyone in desperate
  financial circumstances to make a lying promise,
  that is, to promise to repay borrowed money with
  no intention of doing so." Would such a
  universalized maxim be logically coherent? Kant
  answers with a resounding no.

8
Principles to apply - utilitarianism

• Calculate consequences
• Assess gain over harm
• (pleasure/pain)
• General happiness, not individual
• Mill adds altruism and concern for others to
  Benthams pleasure/pain
• Mill adds rules which create general welfare
  based on past experience

9
John Stuart Mill wrote (showing the influence of
Aristotle)

• A theory which considers little in an action
  besides that actions own consequences will be
  most apt to fail in the consideration of the
  greatest social questions, for these must be
  viewed as the great instruments for forming the
  national character, or carrying forward the
  members of the community towards perfection or
  preserving them from degeneracy.
• UU

4.2
10
Compare with this web-based assessment of
utilitarian ethics. Is there anything to add?

• http//ethicsops.com/UtilityTest.aspx

11
Principles to apply virtue ethics

• Ask does this action fit with my or the
  organisations values?
• Will this action lead me/the organisation to
  flourish?
• Can I do this with integrity?
• What does my practical wisdom (phronesis) tell me
  is right?
• What would my moral heroes do now?

12
Compare with this assessment of virtue ethics.
Is there anything to add?

• http//ethicsops.com/CharacterVirtue.aspx

13
Principles to apply natural law

• Natural rational purpose or goal is this action
  consistent?
• Apply the five primary precepts are any
  violated (P.O.W.E.R)?
• How does this square with my conscience
  (synderesis my God-given natural faculty for
  knowing good)?
• Human law must match divine law and natural law

14
Aquinas wrote (showing the influence of
Aristotles goal of social flourishing)

• It is completely sinful to use fraud to sell
  goods for more than a fair price. Since sellers
  deceive their neighbours by this behaviour, and
  cause them harm.
• ST II-II
  Q77
• UU

4.2
15
Papal encyclical Caritas in Veritate (1995)
states

• The chief challenge facing society today is that
  of globalization. We need to ensure that
  globalization does not damage the poor and the
  most vulnerable.
• Corporations and businesses must recognize
  obligations beyond profit-maximization.
  Laissez-faire capitalism not consistent with
  Catholic social vision. Alternate forms of
  business should be encouraged.
• "The environment is God's gift to everyone, and
  in our use of it we have a responsibility towards
  the poor, towards future generations and towards
  humanity as a whole."

16
Principles to apply situation ethics

• What action maximises agape love?
• What are the likely consequences of alternatives?
• Which choice puts people before principle?

17
Joseph Fletcher wrote (showing the influence of
Aristotles virtue of prudence)

• Loves calculations, which the Greeks call
  prudence, keep love sharpenedit saves love from
  selective blindnesseach of its claimants must be
  heard in relation to the others.this is the
  operational and situational discipline of the
  love ethic it needs to find absolute loves
  relative course. Situation
  Ethics page 90find absolute loves relative
  courseU

4.2
18
Trafigura

• Set up in 1996 to trade oil and petroleum
  products around the world
• Trafiguras impact on the global economy is a
  positive one our responsibility is to the
  communities in which we operate, our customers,
  our suppliers and employees. Trafigura Ethics
  Statement
• To clean up dirty fuel in 2006, traders planned
  to add caustic soda to absorb sulphur
  contaminants, despite being told this process was
  banned in the west.
• The "most difficult" problem, as they recorded,
  was how to dispose of the resultant stinking
  toxic waste.

19
Awareness and avoidance

• The project manager reported to the Chief
  executive Claude Dauphin "Caustic washes are
  banned by most countries due to the hazardous
  nature of the waste (mercaptans, phenols,
  smell)."

20
Dump it on the poorest

• A chartered tanker, the Probo Koala,
• took three cargoes, each of 28,000
• tonnes of contaminated gasoline, and mixed
  them with caustic soda and a catalyst.
• The waste ended up being tipped all around
  Abidjan. Those living and working nearby risked
  burns, nausea, diarrhoea, loss of consciousness
  and death from contact with such compounds.
• The most sombre allegations concern the killer
  gas hydrogen sulphide.

21
Harmful side-effects

• Inhabitants near the dump sites reported
  respiratory and eye problems, while further away,
  people reported nauseating smells.
• Trafigura try to evade responsibility There is
  no evidence to suggest that the slops would
  generate hydrogen sulphide at levels that could
  have caused the deaths and serious injuries
  alleged".

A small child shows the effects of toxic gas
released in the Ivory Coast
22
Lies the Court didnt believe

• Trafigura said "there is no evidence to suggest
  that the slops would generate hydrogen sulphide
  at levels that could have caused the deaths and
  serious injuries alleged".
• 31,000 Africans joined in an unprecedented group
  action for compensation. 30m was awarded.

23
The conclusion?

• Using the principles from our five ethical
  theories, what did Trafigura do that was morally
  wrong?
• Which is the best approach to issues concerning
  the environment, business, and the profit motive?