Toward a Universal Declaration of a G.E. A Contribution on Corporate Ethics

1. Toward a Universal Declaration of a G.E.A Contribution on Corporate Ethics Lewis Demaso Jennifer Duffy Alexis Hughes Kelly Montier

2. Why Corporate Ethics? • The corporation has long been viewed as an amoral institution that blindly pursues profit without regard for the health and welfare of workers, the environment, or society as a whole. Today the corporation is recognized as one of the world’s two dominant power structures, on par with the nation-state • In the wake of recent high-profile corporate scandals in the US, and long-term corporate involvement in human rights abuses around the world, there is an urgent need to address the fundamental conflict between ethical and economic imperatives.Too often businesses are profiting at the expense of the Earth Community • Fortunately, many corporate executives have begun to realize that emphasis on short-term gains (the quick fix) can lead to unintended consequences, i.e. destroy a company’s long-term value • The goal of this project is to examine the ethical issues regularly faced in a variety of industries, and create a business ethics contribution to a G.E.

3. Our Goal for this Project • It is important to note that many organizations around the world are involved in exploring and codifying corporate ethics and, when appropriate, we have borrowed from their data and ideas • One of these organizations, the Interfaith Center on Corporate Responsibility, has articulated the following goals: • Change unjust or harmful corporate policies • Work toward peace, economic justice and stewardship of the earth • We have subdivided our corporate ethics discussion into six distinct industries, highlighting specific discussion points for a G.E. • Medical, Media, Food, Transportation • Finally we’ll tie it all together and set forth our recommendations on how to proceed

4. Ethical Issues in the Medical Industry • The medical industry faces ethical challenges of two distinct types: • Bio-medical ethical challenges due to the nature of the work • Corporate ethical challenges due to their nature as commercial entities • Bio-medical ethical challenges are beyond the scope of this project, but the gravity of this body of philosophy is immense • The corporate ethical challenges in the medical industry present themselves in one (or more) of three ways: • Product safety: what is “safe” in the medical field and what constitutes “harm?” • Corporate social responsibility: what are corporate responsibilities to stakeholders, when the stakeholders are all of mankind? • Corporate governance: what are the best ways for information, authority and influence to flow between shareholders, managers, and Boards of Directors? • This section will address corporate ethical issues unique to pharmaceutical companies, biotech companies and health insurance companies

5. Ethical Issues in the Medical Industry:Promoting Sales / Sacrificing Safety • Like all other companies, pharmaceutical and biotech companies must promote sales--they do this through advertising • Direct-to-consumer advertising is becoming commonplace • We’re all familiar with Bob Dole’s Viagra commercial • Drug and biotech companies often rely on consumers’lack of knowledge about their products in order to increase sales • The US government recognized the need to regulate food and medicines well over 100 years ago. One way companies have found to by-pass government regulation is through “off-label marketing,” the practice of marketing FDA-approved drugs for as yet unapproved uses… There are pros and cons to this practice • 62% of cancer patients use prescription drugs off-label • Finally, the most malevolent form of promoting sales at the expense of safety occurs when companies manipulate research results

6. Ethical Issues in the Medical Industry:Drug Pricing / Research • One extremely hot topic these days is drug pricing in developing countries • In developing countries with high rates of deadly, yet treatable, communicative diseases such as HIV/AIDS, the WTO and others have pressured companies to distribute drugs at greatly reduced prices • Drug firms also face criticism and government investigation over alleged efforts to delay sale of generic versions of their drugs • Another major issue fundamental to this discussion is research ethics. Pharmaceutical and biotech companies are the primary sponsors of bio-medical research including experimental research involving human subjects

7. Ethical Issues in the Medical Industry:Access to Doctors / Health Insurance • Pharmaceutical and biotech companies are placing new emphasis on building relationships with health care providers • Sales reps are positioning themselves as educational resources for doctors. They are becoming the experts on narrowly defined therapeutic areas and complex diseases • Many companies have developed codes of ethics for sales reps’ interactions with health care professionals • Then there are the health insurance companies • Unfortunately the survival of health insurance companies largely depends on denying coverage to those who require medical coverage most • Insurance companies often refuse to cover treatment or hospital stays for certain conditions beyond a specified period of time

8. Corporate Ethics to Global Ethic: Medical Industry Responsibilities Most human beings receive some form of health care during the course of their lives… These issues are of universal importance • Article 25 of the UN Declaration of Human Rights • Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food… and medical care… and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control • If health care is a basic human right then medicines / biotechnical solutions to health problems are not purely commercial commodities • In terms of research ethics, medical firms must take responsibility for the methods of research that they sponsor. The World Health Organization is involved in supporting improved ethical standards and review processes for research with human beings • The health insurance industry must determine ethical solutions to clamp down on fraud and ensure access to basic treatment

9. The Media Industry:“All The News That’s Fit to Print” The press has demonstrated awareness of the need to develop/publicize ethical standards • This is due to the need for credibility with consumers • Most press associations across the world, down to the hometown newspaper have published a code of ethics • The intended audience: • Some organizations have a general code of ethics • Others have one directed primarily to the individual journalist or to the publisher/company • Some associations have separate codes for journalists and companies/publishers addressing the issues that are particularly important to each of these groups  

10. Ethical Issues in the Media Industry • Below are a few current issues important to individual journalists and their employers. The first is of primary importance to the individual journalist and the second is of primary concern to the publisher or company 1.  Individual Journalist – How reporters get the story • Freedom of information vs. right to privacy • Fair/honest acquisition of information • Need for a story fast (timeliness) vs. accuracy 2.  Corporation/Publisher – Ethical vs Economic need • Sensationalism vs. self-censorship • Public watchdog vs. self-censorship

11. Ethical Issues in the Media Industry Personal pride as well as economic, governmental, and professional pressure can make it difficult for a journalist to balance the quality, ethics, and interest of their reporting The need to acquire information forms the basis of most journalists’ ethical questions 1. Where the information comes from: • Freedom of information is the right and responsibility of the journalist; however, this can come at the exclusion of all other considerations. It is not always necessary for the journalist or the public to know everything, especially when it jeopardizes national security or peoples’ lives, interferes in another’s right to privacy or well-being and/or has little significance to the public at large

12. Ethical Issues in the Media Industry 2. The way in which information is acquired: • The media often sees itself as the watchdog of the community, there to make sure gov’t/corporations are responsible to the people for their actions. However, journalists can abuse their right to info by using coercive or other dishonest means to obtain it. They can undermine their position as agents of freedom of speech by obtaining info with out consideration for the consequences it can have on others 3. Going public with a story: • Inaccurate reporting is sometimes intentional, but often it is the pressure to produce an attention-grabbing story very fast that causes journalists to slip over the basic tenet of accuracy. This can be very dangerous because what the media says greatly influences public opinion and can have drastic consequences for those involved • There is also the issue of whether info, though accurate, should be published. Is it of interest only because it makes good gossip, or is it of genuine concern to the public?

13. Ethical Issues in the Media Industry “Economics plays a major role in shaping the information served up to the … public… The media are profit-driven enterprises. Balancing the cost of high quality journalism against corporate profits is one of the significant challenges in U.S. journalism.” * This economic issue makes it necessary to bring in bigger audiences and bigger sponsors; providing two challenges to good reporting: 1. Sensational publishing: • Results in failure to gather appropriate facts & ignoring more important, less interesting news in favor of something that draws in customers 2. Pandering to sponsors: • Results in ignoring news important to the public welfare, in order to avoid offending big advertisers

14. Corporate Ethics to Global Ethic: The MediaIndustry Swidler’s 1st , 2nd and 8th principles from his draft declaration are useful in forming “media principles” • Published material should not infringe on the right to privacy, except in special cases where it is justified by public welfare and does not cause harm to the individual or community • Since the press facilitates dialogue, it should defend the principle of freedom of speech and the expression of comment and criticism • Publishers/companies should enforce standards for their employees and should not acquire material from sources that do not follow stated guidelines • Research must be conducted within legal boundaries and with respect for human dignity • Covert research is justifiable only if it brings to light information of special interest to the public and cannot be obtained by other means • Inaccurate, misleading or distorted material should not be published; publishers should delay release when it is not possible to verify facts; when errors are recognized they should be corrected immediately • Media agents should never distort or suppress the truth because of advertising or other self-serving interests

15. Ethical Issues in the FoodIndustry:Imbalance of Food Corporations have greater power than ever before and the food industry is dealing with the most basic of human needs: What will we hold corporations accountable for in exchange for allowance to operate in a global market that benefits them? • World Hunger/Threat of Too Little • Ensuring the Global Family is Fed: • Consumer Expectation Paradigm shift: Must demand greater responsibility from leading corporations (Expect ethical contribution in order to set market price & compete in global market) • Utilization of their Resources • Use of their Distribution Power • Underlying Issue: Population Growth • Dealing with Scarcity of Resources • Major Intersection with World Religions • Proliferation of Obesity/Threat of Too Much • Dealing with Lack of Scarcity: • Quantity without Quality: Fast Food Industry as Symbol of change in Eating • Poor/Uneducated pay the biggest price • Increasing Accessibility of Information/Education to drive demand • Interaction with Media Industry

16. Ethical Issues in the Food Industry: Food Safety/Food Quality • Technologically Speaking: • U.N. Precautionary Principle: Actions taken to protect the environment and human health should take precedence over implementation of new but untried technologies, even if there is not definitive proof that harm will be done* • Genetically Modified Food • Feed the poor or destroy the environment? • Threat to Human Health? • The Ethics of Food, Gregory E. Pence: collection of voices who view ethics of genetically modified food as among the most pressing societal questions of our time • Episodic Disease Outbreaks • Health Implications of Processed Food *United Nations Conference on Environment and Development, www.cid.harvard.edu.

17. Ethical Issues in the Food Industry:Fair Trade and Subsidizing • Un-level Trading Field: Market Power (Ability to Set Prices) • Many Avenues to Consider: (e.g. maximizing efficiency in agriculture may cause widespread unemployment without opportunity in other sectors) • Need for transparency of scale/diversity of largest food producers • The problems experienced by poor producers and workers in developing countries differ greatly from product to product • small farmers • workers on plantations and in factories • Retail Food Industry: Dramatic Development in Market Power: • The growth of the organic food industry and fairly-traded products illustrates a rise in “ethical” consumerism • Willingness to pay a premium for some assurances of the human aspects of the production and distribution of products • Continued need for education about and certification of product “fair-trade” claims • Is Corporate Globalization Ethical? • Aid for Trade Issue: Building supply-capacity and trade related infrastructure in developing countries to enable the expansion of their trade to benefit from World Trade Organization Agreements • Larger Corporations as both driving force and primary benefactor of free trade

18. Ethical Issues in the Food Industry:Environmental Issues Issues at odds with one another: Increased Trade/Aid for Trade/Corporate Globalization gives rise to: • Individualism in Food Industry • Waste of Single serving Packaging including Retail packaging and Fast Food Industry • Distancing of Food from Consumers • Food in U.S. travels average of 1,300 miles from the farm to the market shelf. Nearly all states buy 85-90% of its food from someplace else. • Greater the distances between production and the consumption, the greater the pollution • Decreased Energy efficiency of Production “per serving” • Increased Noise and air pollution from Production “per serving” • Connection between Industries • Lack of accountability down the chain of production/distribution/consumption: • E.g. Consumer demand allows for negligence of food industry in packaging products in single serving, non-recyclable plastic or styro-foam (rather than recyclable plastic or paper products with less waste): Food Industry demand in turn allows negligence of the packaging industry.

19. Global Ethic to Corporate Ethics: Food Industry: We Are What We Eat! The Food Industry has an elevated role/responsibility: FOOD AS SACRED CONNECTION: • Between One Another and Biological Connection to our Earth • Sharing of Food Across All Major Religions • Global Market/Trade policy was written with input mainly from multinational corporations and very little input from citizens: NEED FOR GLOBAL MARKET/TRADE POLICY WRITTEN FROM A GLOBAL ETHIC PERSPECTIVE: • Food Industry Touches Everyone-- Can be Driving Force of Global Ethic • Food Industry Long Been Both Reflection and Agent of Social Change • Paradigm Shift in Concept of Food Quality- The Value that we place on food Must Reflect Human, Animal, Environmental Interaction in Production and Distribution • What are we willing to pay for? • The growth of the U.S. organic food industry and fairly-traded products illustrates the rise of “ethical” consumerism • Continued need for endorsement and certification of product claims

20. Corporate Ethics to Global Ethic: FoodIndustry • Who’s on Board? Many existing Model Organizations to Support! • Local/U.S. e.g.: The Food Project • Since 1991: U.S. National Model-Sustainable Agriculture • Mission: To grow a community of youth and adults who work together to build a sustainable food system and inspire and support others to create change in own communities. • “We consider our hallmark to be our focus on identifying and transforming a new generation of leaders by placing teens in unusually responsible roles, with deeply meaningful work.” • International: FAO (Food and Agriculture Organization of the United Nations) • Leads International Efforts to Defeat Hunger: “to make sure the people have regular access to enough high-quality food to lead active, healthy lives.” • Serves both developed and developing countries • FAO acts as neutral forum: nations meet as equals to negotiate agreements and debate policy • FAO mandate: “to raise levels of nutrition, improve agricultural productivity, better the lives of rural populations and contribute to the growth of the world economy.” • Paradigm Extended in 2006: in addition to carrying out major programs in agricultural production and support systems—focus on foods that minimize adverse impacts on the environment

21. Ethical Issues in the TransportationIndustry • The ethics of the transportation industry are vital to a Global Ethic. Large-scale natural disasters pose a threat to all of humanity, but some people are more vulnerable than others • Hurricane Katrina is a recent example that proves the need for a global ethic • Transportation was left to the private market which resulted in price-gouging and relief for only a select few; over 100,000 people were left stranded • As a result over 1,400 human lives were lost forcing the US to realize that the system was completely broken • The New Orleans population were vulnerable not simply because of geography but also because of long term class and race abandonment – poverty – exacerbated by the dismantling of social welfare by Democratic and Republican administrations alike • In order to achieve a global ethic, there must first be a code of ethics in place at the national and corporate level

22. Ethical Issues in the Transportation Industry • If the most advanced society in the modern world is unable to protect the rights of its citizens what type of message does that send to other developing countries? • Many of New Orleans’ most vulnerable citizens were not able to obtain transportation to safe areas and did not have the means to evacuate on their own • This was a failure at all levels of government as well as big business • State Transportation and Development Secretary told Senate investigators that his department had no buses or drivers to execute the mission • Fuel prices, and oil company profits, were skyrocketing well before Hurricanes Katrina and Rita hit. The week before Katrina, gasoline prices were up 39 percent from the year before. For the second quarter of this year, before the hurricanes, ExxonMobil’s profits topped $7.5 billion, a 32 percent increase and the highest ever for the corporation. ConocoPhillips netted $3.1 billion, a 51 percent jump

23. Corporate Ethics to Global Ethic: Transportation Industry • Swidler wrote about the importance of community when discussing religion and business • Communities, states and other social organizations which contribute to the good of humans and the world have a right to exist and flourish; this right should be respected by all • If this basic presupposition could not be attained by the US how can we expect others to follow suit? • Large corporations should not be allowed to exploit peoples’ vulnerabilities in a time of need. A global ethic should contain language to protect citizens and discourage corporate greed • How is it possible for a country as small as Cuba, whose people have little or no protection from the effects of hurricanes, be capable of coordinating successful evacuations at the community level? • Preparation and evacuation are organized and coordinated between the central government and local communities, and transportation away from danger should be organized as a social community project rather than left to the private market • This level of cooperation must be achieved in order to protect human lives and adhere to Swidler’s Fundamental Rule

24. Tying It Together—Corporate Ethics to G.E. • From the UN Universal Declaration of Human Rights, All human beings have a right to a standard of living adequate for the health and well-being of himself and his family to include food and health care… • Therefore food, medicines and biotechnical solutions are not purely commercial commodities, but absolute necessities that must be made available to all human beings • In recognition of all human beings’ basic dignity, corporations must never exploit peoples’ vulnerabilities in a time of need • Furthermore, corporations must take responsibility for the research that they sponsor; corporations have a grave responsibility to ensure that research is conducted in a manner worthy of humanity’s support • Media giants must assume responsibility for the news that they publish and must always conduct themselves in a manner worthy of freedom of speech protections

25. From Concept to Execution—Startingon the Home Front • Citizens can and should play an active role in shaping the future of our global economy– Make industries a reflection of consumers and consumer values • Demand that corporations be accountable to people's needs • Build strong and free labor • Promote fair and environmentally sustainable alternatives • Consumer Holds the Power in a Democracy • Individual Ethics increasingly translated into support/purchase of earth and global community- friendly products • Americans, concerned with health, the environment, and the treatment of human workers and animals, are increasingly willing to pay more for earth-friendly products • All Industries Are Connected: Consumers can Utilize this Fact as well if not better than Corporations • Food and Agriculture Organization of U.N. Innovative integration of agriculture and food quality • Audit & Consultant Conflicts of Interest Effect (e.g. food safety)

26. From Concept to Execution—Starting on the Home Front and Propagating Outward • One of the primary goals of the Interfaith Center on Corporate Responsibility is to mainstream the practice of conducting Human Rights Impact Assessments • These impact assessments will enable a company to identify, understand, and evaluate the impact of its operations or projects on communities and other stakeholders, at each stage of its development and operation, and as a result minimize potential human rights abuses • The bottom line is that we “consumers” have a vote!By becoming informed, we then have the power to change corporate behavior • Every one of us has the power to become educated on various corporations’ policies/ethics • Every one of us can examine our financial portfolios with reference to ethical and societal considerations, and direct resources to those corporations which reflect our values as citizens of the Earth Community • Lastly we can encourage other people and organizations to which we belong to do the same. We must take action if/when a corporation’s economic imperatives trump their ethical imperatives and hold corporations accountable for their actions • Toward peace, economic justice and stewardship of the earth!

27. “Just Do It” Since the Nike sweatshop scandal broke, Nike has made many positive changes in the corporate social responsibility arena. “During the 1970's, most Nike shoes were made in South Korea and Taiwan. When workers there gained new freedom to organize and wages began to rise, Nike looked for "greener pastures." It found them in Indonesia, China, and Vietnam--countries where protective labor laws are poorly enforced and cheap labor is abundant.” **Global Exchange

28. References Medical Industry • Business for Social Responsibility: Overview of Business Ethics, http://store.bsr.org/CSRResources/IssueBriefDetail.cfm?DocumentID=48815 • Cambridge Catalogue: Ethics and the Pharmaceutical Industry, http://www.cambridge.org/us/catalogue/catalogue.asp?isbn=0521854962 • Global Exchange, http://www.globalexchange.org/campaigns/sweatshops/nike/faq.html • Interfaith Center on Corporate Responsibility, www.iccr.org • Nature: Top Ten Biotechnologies for Improving Health in Developing Countries, http://www.nature.com/ng/journal/v32/n2/abs/ng1002-229.html • PubMed: Developing Drugs for the Developing World: An Economic, Legal, Moral and Political Dilemma, http://www.ncbi.nlm.nih.gov/entrez/ • The World Health Organization, www.who.int/en/ • United Nations: Universal Declaration of Human Rights, http://www.un.org/Overview/rights.html • Woodstock Theological Center: Health Care Ethics Business Aspects, http://woodstock.georgetown.edu/

29. References Cont’d Food Industry • Fairtrade, www.fairtrade.org.uk/about_what_is_fairtrade.htm. • Fleishman & Hillard International Communication:CSR Survey 06, www.csrresults.com/contact.html • The Food Project, www.thefoodproject.org • Food and Agriculture Organization of the United Nations: Agriculture, Biosecurity, Nutrion and Consumer Protection Department, www.fao.org/ag/ • Garland, Cedric, A system of Ehtics for Food? The precautionary Principle: Synopsis, ethics.ucsd.edu/seminars/2003/summaries/precautionary.doc • Global Exchange: Fair Trade, www.globalexchange.org/campaigns/fairtrade • Institute for Agriculture and Trade Policy, www.iatp.org • Markkula Center for Applied Ethics, www.scu.edu/ethics • Singer, Peter, One World: the ethics of globalization, 2nd ed., Yale University, New Haven, CT, 2004. • Singer, Peter, Writings on an Ethical Life, Harper Collins, New York, 2000 • U.S. Dept of State: international Information Programs, usinfo.state.gov/scv/Archive/2006/Jul/07-803668.html

30. References Cont’d Media Industry • Databank for European Codes of Journalism Ethics, http://www.uta.fi/ethicnet/ • Poynter Online, http://www.poynter.org/content/content_view.asp?id=1208 • Ethics on the World Wide Web CSU, http://commfaculty.fullerton.edu/lester/ethics/media.html • Markkula Center for Applied Ethics, www.scu.edu/ethics • Ethics Research Center, http://www.ethics.org/erc-publications/ethics-today.asp?aid=710 • Media Ethics, http://campus.arbor.edu/media_ethics7/instructor.html • U.S. Dept of State: international Information Programs, http://usinfo.state.gov/journals/itgic/0401/ijge/ijge0401.htm * Defining the Land of the Fourth Estate      By Nicholas Johnson     The Role of the Media in Building Community      By Jan Schaffer     Journalism in the Era of the Web      By Bob Giles      Why Democracy Needs Investigative Journalism      By Silvio Waisbord     Media Ethics Codes and Beyond By Robert Steele and Jay Black

31. References Cont’d Transportation Industry • Leonard Swidler’s “A UNIVERSAL DECLARATION OF A GLOBAL ETHIC” • The Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2006/01/30/AR2006013001339.html) • The Center For Public Integrity (http://www.publicintegrity.org/katrina/filter.aspx?cat=9) • People’s Weekly World (http://www.pww.org/article/articleview/7907/1/290)