L'Oreal vs Trafigura

Ethics in Our World - Good & Bad

Overview

Business ethics is important because it keeps business people to operate within a moral and legal pedestal that not only leaves them satisfied internally but also increases sales because most people like dealing or doing business with honest businessmen. Also if the public or your potential customers recognize you to be engaging in improper business deals, they will turn away from you. Good business ethics should be embraced by all businessmen because engaging in unethical practices, which may include breaking the law, may lead to heavy fines or lack of trust by members of the public. Other business do not take a large interest in containing ethics and ensuring their company provides satisfaction to all members. This page will help determine why a company should have business ethics, what negative impacts there are if not done so. This page demonstrates two different corporations- one that follows business ethics, whereas, the other company does not. Also, at the bottom of the page, there will be eight rules to a code of conduct for better corporate social responsibility in the business environment.


L'Oreal - Ethical Business

The L'Oréal Group is the world's largest cosmetics and beauty company. With its registered office in Paris and head office in the Paris suburb of Clichy, Hauts-de-Seine, France, it has developed activities in the field of cosmetics. Concentrating on hair colour, skin care, sun protection, make-up, perfumed and hair care, the company is active in the dermatological tissue engineering and pharmaceutical fields and is the top nanotechnology patent-holder in the United States.


The world leader in beauty, L’Oreal is present in 130 countries on five continents. The group's mission is to provide the best in cosmetics innovation to women and men around the world with respect for their diversity. For more than a century, L’Oreal has devoted its energy and competences solely to one business: beauty. L’Oreal’s mission is to provide the best in cosmetics innovation to everyone around the world. L’Oreal integrates ethics into the heart of its business practice. The group's mission is to provide the best in cosmetics innovation to women and men around the world.


L’Oréal’s ethics programme is proactive and supports the Group’s growth. In 2000, L’Oréal was one of the first companies in France to establish a Code of Business Ethics and to appoint, in 2007, a Chief Ethics Officer. In 2008, L’Oréal Chairman and CEO Jean-Paul Agon received the prestigious Stanley C. Pace Leadership in Ethics Award. L’Oréal is a signatory of the UN Global Compact since 2003. L’Oréal organises an annual Ethics Day where employees around the world can chat online with L’Oréal’s Chairman and CEO about ethics.

Benefit Analysis

• L’Oréal Canada is extremely proud to have been named as one of Canada’s Top 100 Employers every year since 2004 by the editors of Mediacorp Canada Inc., the most important publisher of magazines covering the Canadian workplace. Furthermore, L’Oréal Canada was also selected as one of Montreal’s Top 15 Employers. L’Oréal Canada was noted for its family friendly policies, availability of on-site daycare, summer and winter schedules permitting more flexibility, as well as continuous investment in employee development. The jury of experts and freelance journalists also considered criteria such as growth of the organization, work environment, communication between employees, and corporate citizenship in their judgement.


L'Oreal Ethics
• L’Oréal is present in 130 countries and diversity has always been one of our major strengths. The talents and energy of the men and women who work for the Group throughout the world gives us a real competitive advantage that enables us to maintain global growth. It acquires experience by being faced with a range of different cultures, business approaches and market situations. They offer employees international missions right at a point in their career; at the present time, 44% of the group’s international assignees are under 35 years old. This is a win/win approach: the know-how our managers acquire in other countries contributes to the growth of the group. And for the managers, it allows them to widen their horizons while developing their managerial skills.


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• L'Oreal is able to benefit the environment as well, as they do not use sever and harsh chemicals. While our products go through extensive testing to provide the best and safest possible products for our consumers, even the safest products may contain ingredients to which a few individuals may be sensitive. However, we still maintain a focus to use natural and herbal ingredients and products which benefit the skin, hair and assets of our customers so that there is no harm to anyone or the environment.

• L'Oréal absolutely supports the objective of the elimination of laboratory animal testing. For the past 25 years, L'Oréal has been actively involved and has made major contributions to the research, development, validation and acceptance of alternative non-animal strategies.


Trafigura - Unethical Business

Trafigura is a successful company that was created in 1993, which specializes in more than just one particular trade. The company deals with metals, and energy including oil. The company is ranked as the third largest in terms of oil trading and placed second largest as a metals trader. The operating centre is located in London, while the address tax is in Amsterdam, and overall headquarters are in Lucerne, Switzerland.
Trafigura is a private company and has created jobs for 8,773 individuals all across the globe. The company is well spread across and has 167 offices within 58 countries. In North America there are six office locations, sixteen offices in central and south America, fifteen in Europe, thirteen in both Africa and the Middle East, and lastly ten in Asia-pacific. To date, the company has ranked in US $121.5 billion in revenues and a net income of US $1.11 billion. Even though the company has many great aspects to it, there was a huge crisis in 2006 that changed the viewpoints on the company. This crisis was caused due to the fact of toxic waste being dumped around Côte d’Ivoire in Africa. Due to the toxic waste there was a health crisis that affected the lives of 108,000 individuals.
This company is seen as unethical after a ship that was leased from Trafigura was told that the price of transferring the waste on board in the Netherlands increased in price. In order to steer clear of the extra charge the ship was ordered to dock at another seaport until there would be another location to eliminate the waste.The ship docked at Côte d’Ivoire in Africa, which has one of the largest seaports. Trafigura transferred the dump to a new company called Compagnie Tommy who dumped the waste instead of processing it. Due to this big mistake, much of the population fell ill from the waste. The contamination of the waste affected the food, health, water and work of society and overall affected the food chain enormously.
Trafigura: a two-minute overview - English

Cost Analysis

Environmental Impact
Due to the toxic waste that had been released in the Côte d’Ivoire there were many negative impacts regarding the environment. To begin with, the poison that is released from the toxins releases dangerous chemicals in the air. From this there is a possibility of causing mutations to plants and wild life in the surrounding areas. Also, the chemicals that are released into the air are the main contributors to global warming and causes changes to temperature. The green house gases are emitted into the air creating a chemical filled atmosphere. When the land becomes intoxicated it leads to plants dying off which causes animals/aquatic life to lose their source of food.


People
In 2006, the dumping of toxic waste had negatively impacted more than 100,000 people in Abidjan, Côte d’Ivoire. It had impacted many civilians largely causing breathing difficulties, nausea, stinging eyes and burning skin. The national commission of inquiry reported that due to these effects there were 15 deaths, which was then changed to 17 deaths. Dead included a 6-month-old baby and an inmate at the capitals main prison who was 12 or 13 years old. Trafigura had announced that they were unclear of those figures and saying the waste could only have caused “low level flulike symptoms and anxiety.” The company had paid an additional $45 million in compensation as part of a 2009 settlement in the U.K. by 30,000 victims. The distribution process was corrupted when an organization falsely claiming to represent victims robbed roughly 6,000 victims of the money they were supposed to be compensated for.


Dirty tricks and toxic waste in Ivory Coast (part 1)
Government
The new government in Côte d’Ivoire’s had ensured that the compensation paid out by Trafigura would reach the thousands of victims affected by the toxic waste dumping. Trafigura has paid US$260 million in a number of payouts yet some victims haven’t been compensated for. In 2007 Trafigura entered into a settlement agreement with the government of Côte d’Ivoire where Trafigura paid US$195 million for compensation and clean-up costs. The company had also paid a second payment of US$20 million to the government of Cote d’Ivoire as full and final payment for any additional clean-up costs. The government created a list of over 95,000 victims to compensate; however, the government compensation process was never completed. From the US $195 million there is a doubt in mind as to how much the victims actually received. In recent years, both Canada and the USA have created laws and regulations to try to stop the illegal dumping of toxic wastes and the destruction of our environment.
Business
Due to the events that took place regarding Trafigura, the London-based Cynthia Corbett Gallery withdrew their sponsor for the art prize. The gallery was showcasing the work of 16 international emerging artists and decided that the recent events did not make Trafigura fit for the part. Even though Trafigura had done such an unethical move, the investors were not affected at all. In November, Trafigura still managed to secure a $700m credit facility from Asian investors. Also, in March they still secured a $520m credit facility from European banks.


Code of Conduct

1. Respect for individuals: Businesses should expect all employees and entities to work together in a respectful and open manner. In this way, they will maintain a culture of loyalty, trust and solidarity throughout our business. Teamwork is to be encouraged and successes, as well as failures, should be shared. Corporations should listen with generosity and share information as needed, subject to the group’s rules on confidentiality.
2. Respect for the Law: Companies must seek to share principles with its business partners and to ensure, as far as possible, that such partners also respect laws and regulations. Laws include: human rights, quality and healthy safety standards, the environment, corruption and bribery, accurate taxation and financial information, and finally, fair competition.
3. Local customs: Businesses should ensure that, wherever possible, they conduct their activities in a manner sensitive to the cultural and social traditions of communities with which they come into contact.
4. Respect for open talk: encourage all employees to air their views, defend their opinions and signal unacceptable behaviors or demands. They must recognize that employees may have concerns about certain practices and need advice and guidance to help resolve them. Companies must encourage a culture of openness where employees can raise their genuine concerns.
5. Respect for Environment: Companies should keep in mind that in order to achieve a certain task, environment should not be placed under any risks or hazards. This being, the environment is beneficial to everyone and should not be destructed for selfish reasons. Even if a mess is created, the company should be held liable for cleaning up after themselves to preserve the environment.


6. Respect for Human Rights: Since consumers are the main target audience, their needs and concerns are before the companies. Keep in mind that harming the target audience will overall harm your company. Consumers are the basics to building a business. Having a negative effect on consumers can lead to a negative effect on your corporation. Try to keep a representative aspect of the business in terms of consumers, as they become the foundation to your advertising and spreading the word.


7. Keep Strengths Intact: If a job is to be completed by the company, don't cut corners or take short cuts in order to achieve that certain task. Keep the mindset focused on your goal, and complete it to the best of your ability. Do not focus on the quantity of your time, rather focus on the quality of your work. Ensure that you and your business know the strengths and weaknesses, this way you can maintain your strengths and improve on your weak spots. Efficiency is only appreciated if the effort is noticed, which is something the corporation has to build as a whole.


8. Do what is morally correct: If given a task that will go against anything that is seen as not morally correct, do not accept it. Place your morals before your pay cheque. Money isn't everything but if a company is strong in their morals they will be sure to succeed. Do not take projects just to give paychecks. Ensure that you can trust yourself and your corporation to make smarter decisions and to improve each time. Begin to think responsibly about your actions towards your employers, your consumers and your business.


Sandip and Aleena