Ethical Issues

Impacts on the government, businesses, and consumers

Ethical Issues Affecting Our World

During the past century, trade amongst countries has rapidly increased, which has resulted in various ethical issues. These ethical issues have had a major impact on the government, businesses, and consumers. Ethical issues are usually associated with costs to world, but that is not the case, since ethical issues also result in positive impacts. We believe that the three most important ethical issues facing our world today, are environmental degradation, corporate corruption, and human rights. We will explain to you, why these specific ethical issues are the most important by discussing the benefits and costs associated with each one.

Ethical Issues Discussed

Enviornmental Degradation

Overview

During 2009, more than 550,000 firms opened in the United States according to the U.S. Small Business Administration. With thousands of new businesses operating each year, the negative impact to the environment has taken its toll on governments, businesses, and consumers. Many businesses have started to consider ways of sustainable development in order to satisfy their customers and protect the environment. Even though the costs of environmental degradation are evident, there are many hidden benefits which are usually overlooked. Such benefits include the creation of environmental organizations and eco friendly company initiatives. Loblaw’s is an example of an eco friendly company, since it sells its reusable bags in order to reduce waste (Huffington Post www.huffingtonpost.ca). Governments, businesses, and consumers have started to understand how environmental degradation has had a major impact on our lives.

Benefits

Government

(Benefit #1) - Creation of Environmental Departments

During the past few decades, environmental degradation has become a major issue, which has helped shined light on the current state of the earth. Canada’s federal government has been determined to keep the earth safe, by creating departments dedicated to protecting the environment. An example of a department responsible for preserving the environment is Environment Canada. Environment Canada assists provincial and territorial governments by proving information on environmental concerns and creating environmental programs and policies (Environment Canada ec.gc.ca). From this, provincial and territorial governments are able to counter the negative effects of environmental degradation such as water and air pollution. Environment Canada is only one of the many departments around the world that is devoted to maintaining a cleaner environment. Environmental degradation has led to Canadian governments becoming more aware and responsible for the environmental issues at hand.


(Benefit #2) - Working Together and Promoting Peace


Almost every country in the world has been affected by environmental degradation, which is why many worldwide organizations have been created to deal with this pressing issue. Countries from around the world have come together through environmental organizations to deal with common issues such as climate change. The “Intergovernmental Panel on Climate Change (IPCC)” is an example of a worldwide organization that deals with that particular issue. The IPCC was established by the “United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO) in 1988” (IPCC – Intergovernmental Panel on Climate Change - http://www.ipcc.ch). The IPCC currently consists of “195 countries” (IPCC – Intergovernmental Panel on Climate Change - http://www.ipcc.ch). The countries discuss the various costs associated with climate change, and how to keep them to a minimum. By working together to achieve a common goal, countries are creating healthier relationships with each other. Even though IPCC’s goal is to minimize climate change as much as possible, it also promotes peace and friendship among governments around the world.


Businesses

(Benefit #1) - Becoming More Environmentally Friendly


Since environmental degradation has become a growing issue, businesses have become more environmentally friendly in order to protect the environment. Pizza Pizza is an example of a business that satisfies’s its consumers but also looks after the environment. Pizza Pizza’s “Cells for Slices” program involves customers dropping off their old cell phones in exchange for a free slice. Pizza Pizza states that we “ensure that all devices are safely recycled and diverted from landfills. Proceeds generated from the recycling and refurbishing of these used handheld devices go to benefit Food Banks Canada” (Socially responsible for you -http://www.pizzapizza.ca). The “Cells for Slices” program is only one the great initiatives Pizza Pizza has taken in order to protect the environment from pollution. Pizza Pizza has also taken the initiative to have kraft colored napkins at all its locations and use recycled materials to make its pizza boxes. By doing so Pizza Pizza has saved over 87,000 trees from being cut down and used (Socially responsible for you -http://www.pizzapizza.ca). Pizza Pizza is a great example of how businesses have benefitted from environmental degradation by recognizing environmental concerns and becoming more eco-friendly.

Consumers/Citizens/People

(Benefit #1) - Aboriginal Communities

Aboriginal communities located in isolated areas within Canada, face poverty, isolation, and unemployment. On the other hand these Aboriginal communities sit on top of precious resources, such as lumber and diamonds, which attracts foreign and domestic businesses. Attawapiskat is an example of an Aboriginal community that faces the issues listed above, but sits on top of diamonds worth millions. A diamond company called De Beers constructed an open pit mine in Attawapiskat to mine and extract diamonds. De Beers has made sure to give back to the Aboriginal community for allowing it to open its diamond mine. Since it opened its diamond mine in 2008, De Beers has provided Attawapiskat’s companies with $360 million (Protesters are hurting First Nations with their lawless mine blockade - fullcomment.nationalpost.com). De Beers has prevented isolation by constructing a 400km ice road from Moosonee, Ontario to Attawapiskat, Ontario. Before De Beers constructed the ice road, Attawapiskat was an isolated community, which was only accessible by plane. Attawapiskat’s current unemployment rate is 70%, and De Beers has helped reduce the numbers by employing 5% of Attawapiskat’s population in its Victor Diamond Mine. The youth of Attawapiskat have also benefitted from De Beers, since De Beers has provided the schools with textbooks. De Beers has provided money for Attawapiskat companies, prevent isolation, created jobs, and provided youth with textbooks. It is clear that De Beers has damaged the environment by constructing a diamond mine, but the people of the Attawapiskat have benefitted greatly.


Costs

Government

(Cost #1) - Funding Expenses

In order to reduce the effects of environmental degradation, governments can spend up to thousands of dollars to fund their environmental departments. Governments departments such as Environment Canada require the government to fund their community and employment programs. Environment Canada has various projects and programs, which can cost the government up to $200,000 (Environment Canada www.ec.gc.ca). An example of an expensive government funded program is the “St. Lawrence Action Plan”, which is responsible for preventing water pollution. The program costs up to $200,000 and involves cleaning up the St. Lawrence shoreline to prevent water pollution. The program not only includes the restoration costs but also expenses related to research and raising awareness. The environmental employment program for youths also has a price tag of $12,000 per student for a 6-12 month internship. Even though environmental degradation has led to great community programs and employment projects, they can be very costly and timely.


Businesses

(Cost #1) - Being Sued or Fined for Environmental Degradation

With thousands of manufacturing companies operating around the world, chances of issues regarding environmental degradation are very high. If a manufacturing company purposely or accidently damages the environment, there is a high possibility of it being sued and receiving fines. Tianji Coal Chemical Industry Group (TCCIG) is an example of a Chinese company that accidently damaged the environment and was in danger of being sued and received various fines. TCCIG was responsible for water pollution that affected 28 villages when the company had a faulty hose that leaked 39 tonnes of aniline into the Zhuozhang River (www.nytimes.com). Lawyer Yin Qingli, a resident of one the villages affected, tried to sue TCCIG, but officials had told him to cancel his lawsuit. The Handan Winter Swimming Association tried to sue TCCIG for $3 million dollars, but also failed and did not receive the money. Shanxi’s environmental protection bureau fined TCCIG in 2010 and 2011 for excessive pollution and the Changzhi environmental protection bureau now monitors the factory. It is evident that many companies work hard to satisfy their consumers, but do not acknowledge the idea of sustainable development. If companies only care about productivity and profitability, they will end up damaging the environment, and create more problems for themselves such as lawsuits and fines.

Consumers/Citizens/People

(Cost #1) - Diseases


Even in today’s day of age, thousands of aboriginal look at hunting and trapping as a way of life. Thousands of businesses pollute the air and water every day, which sometime directly affects people. An example of company that has caused water contamination in Canada is Dryden Chemicals. “In 1962, the Ontario government granted permission to a company called Dryden Chemicals to dump mercury into the Wabigoon-English River system that supported the native fishery (Mercury poisoning in Grassy Narrows Reserve - www.cbc.ca). By the time Dryden Chemicals stopped dumping mercury in the river in 1986, 10 tonnes of mercury were already in the water. The Grassy Narrows first nation community relied on the Wabigoon-English River as a source of food and commercial fishery. The effects of the contaminated water have been devastating on the people of the community, since many of them now have Minamata disease. The disease has caused the affected people to have difficulty walking, headaches, and exhaustion (Mercury poisoning effects continue at Grassy Narrows – www.cbc.ca). Newborn children are now facing the effects of mercury poisoning caused by Dryden Chemicals as well. Dryden chemicals has polluted the Wabigoon-English River with mercury, but more importantly damaged the past, present, and future generations to come.

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Corporate Corruption

Overview

Corporate corruption is evident all throughout the world and has impacted individuals in many ways. Specifically, this section will be talking about the issue of bribery and how it affects individuals, businesses and governments. It will also address corporate corruption in general, such as fraudulent business practises. For the purposes of this report, it is important to the note the definitions of bribery and corruption. Bribery is defined as the practise of offering something, usually money, to gain an illicit advantage and corporate corruption generally refers to the involvement in illegal activities to further one’s business interests. The purpose for these ethically and legally intrusive practises is clear, to gain an unfair advantage over competitors or to simply to further one’s financial goals. This is evident at several levels; governments, businesses and individuals have all been noted to have taken part in these practises.

Benefits

Government

The presence of bribery allows governments the ability to fine large corporations for their illegal activities, which can be considered a benefit for the government. For example, after a bribery investigation, the Canadian government handed Griffiths Energy International Inc. a hefty fine. The company which had operations in Chad was fined $10.35 million by the Court of Queen’s Bench of Alberta for giving out $2 million in bribes to the wife of Chad’s former Ambassador to Canada (Campbell). Similarly, just earlier in 2011, Niko Resources Ltd. was fined $9.5 million for paying bribes worth approximately $200,000 to a former Bangladeshi energy minister (Campbell). This is significant because the existence of crimes such as bribery allows the government to gain money, in the form of fines. This money can be used by the government to better the nation, such as by creating or sustaining social programs. The government benefits because it is given access to money which may be used to implement expensive policies or procedures in the nation, to best serve its residents.

Businesses

Corporations employing corrupt practises have historically managed to achieve great success, even if it was momentary. For example, before Enron’s collapse, it was considered one of the most successful and innovative companies in the United States. At its pinnacle, Enron was worth approximately $70 billion which its shares trading for a whopping $90 each (WorldCom Company Timeline). This is significant because it shows that corporate corruption can lead a company into success. While Enron eventually fell, the same cannot be said for the many unnoticed corporations out in the world whom are also engaging in similar fraudulent activity, albeit on a smaller scale. These companies are achieving success and furthering their financial agendas’ by employing corrupt business practices such as misstating and misappropriating assets, forging documents and bribery.

Consumers/Citizens/People

One of the main benefits that have come as a result of corporate corruption is an increased awareness of it. For example, studies show that since Bernie Madoff’s grand Ponzi scheme, public awareness for such fraudulent activity has skyrocketed (Jory). This is significant because as more people become aware of such fraudulent activity, less people will be affected by them. As people gain knowledge about these corrupt practises, they tend to become more cautious and ultimately the negative impact that corporate corruption has had on the world would be mitigated.

Costs

Government

One of the major costs that corporate corruption, specifically bribery, has on governments is that it has a detrimental impact on the nation’s economy. For example, The World Bank has estimated that 0.5% of GDP is lost through corruption every year (Anti Corruption Website). It has also been said to create an unfavourable business environment and allows organised crime to flourish. Furthermore, research has shown that corruption is one of the primary hindrances to the economic development of a country, as it undermines the rule of law, weakens trust in public institutions and essentially challenges democratic principles (Anti Corruption Website). This is significant because these corrupt practises not only cripple a country’s GDP; it also creates a negative view of a nation to potential foreign investors. If foreign investors perceive a certain nation to be infested with corruption in forms such as bribery, they may be deterred from investing or expanding activities to the said nation. This inevitably has a detrimental impact on a nation’s economy as foreign investment and economic activity will plummet. One of the responsibilities of a government is ensure that the economy is in order and running smoothly, and a failure to accomplish this may be indicative of an incompetent government.

Businesses

Bribery is a lot less effective than imagined, and actually results in companies underperforming relative to their competitors. Research has shown that companies that bribe their way into contracts underperform for up to three years before and after winning the work for which the bribe was paid (Matthews). According to the study, while companies gained an average of $7 of benefit for every dollar they paid, the benefit disappeared as the level of the bribe recipient within the government increased (Matthews). Essentially, when high level officials are bribed, the value earned is equalized, whereas lower level officials often result in a failure of the contract to be won. This is significant because it indicates that the practise of bribery is not an effective way of earning money. Not only does it not provide the benefits that one would expect, discovery of it could lead to severe consequences. All in all, utilizing bribery as a form to advance the financial position of a corporation will result in failure.

Comsumers/Citizens/People

One of the major negative impact that corporate corruption, bribery is particular, has on consumers is that it allows for inefficient companies to gain contracts. A study has shown that the companies that normally give out bribes are ones that are inefficient rather than best performing ones (Matthews). This is significant because when one looks at these through the perspective of society, the worst companies are acquiring contracts over efficient ones, and this results in a detrimental impact. For example, the bribe paying company may had substandard environment policies that lead to environmental degradation, or its overall inefficiency may translate into high prices for consumer products.

Works Cited

Works Cited

"Anti Corruption Website: What effect does bribery and corruption have on business transactions?." Anti Corruption Website: Home Page. N.p., n.d. Web. 5 May 2013. <http://www.anticorruption.ie/en/ACJS/Pages/FQ08000019>.

Campbell, Darren. "Feds to crack down on foreign corporate corruption | Alberta Oil – Energy Sector Insight." Alberta Oil – Energy Sector Insight | Articles on Oil, Natural Gas, Oil Sands, Alternative Energy, Technology, Energy Services, International Investment, Pipelines, Environment. N.p., n.d. Web. 5 May 2013. <http://www.albertaoilmagazine.com/2013/04/harper-foreign-corruption/>.

Jory, Surendranath R., Ph.D., Mark J. Perry, and Ph.D.. "Ponzi Schemes: A Critical Analysis." Financial Planners — Online Financial Planning — Financial Planning Association — Home. N.p., n.d. Web. 5 May 2013. <http://www.fpanet.org/journal/BetweentheIssues/LastMonth/Articles/PonziSchemes/>.

Matthews, Christopher M.. " Bribes Provide Companies Few Benefits, Study Finds - Corruption Currents - WSJ." WSJ Blogs - WSJ. N.p., n.d. Web. 5 May 2013. <http://blogs.wsj.com/corruption-currents/2012/11/23/bribes-provide-companies-few-benefits-study-finds/>.

"WorldCom Company Timeline (washingtonpost.com)." Washington Post: Breaking News, World, US, DC News & Analysis. N.p., n.d. Web. 5 May 2013. <http://www.washingtonpost.com/wp-dyn/articles/A49156-2002Jun26.html>.

Human Rights

Overview

Human rights is considered universal, meaning that they are they birthright that everyone has and no one has to either earn it or deserve human rights. Because people believe that human rights are a key aspect of living in peace, countries decide to make laws to protect human rights. These laws would include protection from other people and the government infringing on the rights of other people. These laws also insure that if these rights are taken away, they should be punished for their actions. Globalization has placed a major role in the world we live on, presenting new and complex challenges for the protection of human rights. Companies cause harm by directly abusing human rights, or by colluding with others who violate human rights. Despite this potential to cause significant harm, there are few effective mechanisms at national or international level to prevent corporate human rights abuses or to hold companies to account, thus impacting the businesses in general. The reason why this still goes on in the world today is the need for more and more money. Businesses look towards finding the cheapest way possible to produce their product, and by paying people with the least amount of money with harsh conditions to work in, they are the only ones that are benefiting from it. What people need to look towards is the long term success, but many companies look to make the most during the short term and because of this, it leads them to these kinds of situations, looking for cheaper workers to make more money. They should look at it in the different way, where they not only help themselves, but also the works that are in desperate need, and that is considered the long term.

Benefits

Government

  • Allows governments to make laws that are designed to protect people from the violation human rights of other people.
  • Gives the government to ability to gain the people’s trust upon their choice of selecting them as the government if they were to show that they are willing to help solve this issue.
  • Would leave a good reputation for not only the country but also the government themselves if people are to know that their country does not violate the rights of people that work for businesses there.

Businesses

  • If the people of the world notices that the company treats it employees and others with good working conditions, it would leave a positive message and image towards the company and to others.
  • Businesses are not only helping themselves with good revenue, but also they are helping those that are in desperate need for money.
  • Would lead to a gateway of partnership with other companies and investors if they were to know that the company does not violate anyone’s human rights.

Consumers/Citizens/People

  • Consumers would prefer the produce that is made in the right way and would attract newer consumers towards the product or company knowing that they are doing it the right way.
  • Workers have the opportunity obtain work benefits, like vacations, good working conditions, bonus, health care, insurance etc...
  • The workers that are in desperate need would have the ability to work in a safe environment while having the ability to make enough money to support not only themselves but also their families. It would also leave a positive attitude towards the workers and others around them leaving them with hope in life.

Costs

Government

  • Frequently governments fail to regulate the human rights impact of business or ensure access to justice for victims of human rights abuses involving business.
  • The governments would be held responsible for violating the human rights of others regardless of the fact that they may have nothing to do with it.
  • Would leave a bad image towards the government that would be held responsible for not trying to resolve the issue of others violate people’s human rights.

Businesses

  • Leaves a bad image for the company that does not respect their workers.
  • The business would be in jeopardy from various organizations, governments and people from all over the world, eventually leading to the loss of the business.
  • Would decrease the company’s opportunity to obtain new partnerships and investors or to even expand their business further more onto other countries.

Consumers/Citizens/People

  • If the consumers were to find out about the business abusing human rights of others in order to produce the product, it would leave a negative image towards their company.
  • Consumers would be disinterested in the product, and would eventually lead to the dislike of the entire business.
  • Many people that work for companies that does not follow the human rights, would be given jobs that would give only enough money to survive a day. These jobs are also considered to be hard work and sometimes it’s not even enough for the entire family. This would then lead to young kids working, not being able to be educated.

By: Askri, Ahmed, and Atchu