Business Ethics

1. Business Ethics www.philosophicalinvestigations.co.uk

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 www.philosophicalinvestigations.co.uk

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 ??? www.philosophicalinvestigations.co.uk

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 www.philosophicalinvestigations.co.uk

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 don’t matter (hypothetical) • Treating people as ends, not just means • Duty – not self-interest or pleasure www.philosophicalinvestigations.co.uk

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 frominclination, but from duty”. Groundwork of the Metaphysics of Morals www.philosophicalinvestigations.co.uk 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. www.philosophicalinvestigations.co.uk

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 Bentham’s pleasure/pain • Mill adds rules which create general welfare based on past experience www.philosophicalinvestigations.co.uk

9. John Stuart Mill wrote (showing the influence of Aristotle): “A theory which considers little in an action besides that action’s 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 www.philosophicalinvestigations.co.uk 4.2

10. Compare with this web-based assessment of utilitarian ethics. Is there anything to add? • http://ethicsops.com/UtilityTest.aspx www.philosophicalinvestigations.co.uk

11. Principles to apply – virtue ethics • Ask – does this action fit with my or the organisation’s 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? www.philosophicalinvestigations.co.uk

12. Compare with this assessment of virtue ethics. Is there anything to add? • http://ethicsops.com/CharacterVirtue.aspx www.philosophicalinvestigations.co.uk

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 www.philosophicalinvestigations.co.uk

14. Aquinas wrote (showing the influence of Aristotle’s 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 www.philosophicalinvestigations.co.uk 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." www.philosophicalinvestigations.co.uk

16. Principles to apply – situation ethics • What action maximises agape love? • What are the likely consequences of alternatives? • Which choice puts people before principle? www.philosophicalinvestigations.co.uk

17. Joseph Fletcher wrote (showing the influence of Aristotle’s virtue of prudence): “Love’s calculations, which the Greeks call prudence, keep love sharpened…it saves love from selective blindness…each 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 love’s relative course”. Situation Ethics page 90…find absolute love’s relative courseU www.philosophicalinvestigations.co.uk 4.2

18. Trafigura • Set up in 1996 to trade oil and petroleum products around the world • “Trafigura’s 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. www.philosophicalinvestigations.co.uk

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)." www.philosophicalinvestigations.co.uk

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. www.philosophicalinvestigations.co.uk

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 www.philosophicalinvestigations.co.uk

22. Lies the Court didn’t 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. www.philosophicalinvestigations.co.uk

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? www.philosophicalinvestigations.co.uk