Ethics and Social Responsibility Oil or Mining Industry - Term Paper Example

Ethics and Social Responsibility of Oil/Mining Industry Ethical theories abound in history, as the number of philosophers who has talked about them. But there are a number of major theories which are relevant across space and time, which have stood against the test of time. Utilitarianism, duties and rights theory, justice and fairness theory and theory of virtue are to name the most prominent of ethical theories that have application in the business world. Utilitarianism, in nutshell, is the theory that states that “actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness” (Mill, 2004, p. 6). As this theory is based on the consequences of actions, it is also mentioned as consequentialist theory. Both long-term and short term consequences come under the purview of this theory, but the drawback of this theory is that it suggests that there is “no higher end than pleasure” (Mill, 2004, p.6). Duties and rights theory has as its base, the Kantian analysis of ethics (Rosen, 1996, p.82). Kant has delineated closely connected duties and rights based on the concepts of ethics as well as justice (as cited in Rosen, 1996, p.82). But in his theory, Kant has made a distinction between ethics and justice (as cited in Rosen, 1996, p. 83). According to Kant, “laws and duties of justice are external and enforceable, as opposed to ethical laws and duties, which are internal and unenforceable” (as cited in Rosen, 1996, p. 83). Here, is not the consequences but the motivation behind an action that counts. Actions arising out of a sense of duty are considered ethical. Kant also had believed that human beings are uniquely rational and they know how to judge what their duty is, based on logic and consistency. The third important theory is Rawls’ theory of justice and fairness. After saying that “justice is the first virtue of institutions”, Rawls (2005, p.3) goes on to explain his theory saying that justice “does not allow that the sacrifices imposed on a few are outweighed by the larger sum of advantages enjoyed by many.” Rawls (2005, p.11) has also correlated justice with fairness. According to Aristotle, justice comprises of distributive justice, retributive justice and compensative justice (as cited by Boatright, 2006, p.41). Rawl’s concept of justice is inclusive of these three. The first principle of Rawl is the principal of equal liberty which says that every individual has a liberty ensured by a “complete system of the liberties of equal citizenship” and “the worth of liberty to persons and groups is proportional to their capacity to advance their ends within the framework the system defines” (Rawls, 2005, p.195-208). Second principle of Rawls comprises of two aspects, namely, difference principle and the principle of fair equality of opportunity (Rawls, 2005, p.83-84). The second principle has prescribed that any social or economic inequality has to “benefit …the least advantaged” and provide “offices and positions open to all under conditions of fair equality of opportunity” (Rawls, 2005, p.83). The fourth major theory of ethics can be the Aristotelian theory of virtue and virtuous life. According to this theory, virtue is the highest and most inclusive ethical value based on which human action has to be understood (Aristotle, 2008, p.47). This theory is based on the obligation to feel each and every emotion possible by human beings “when we ought, on what occasions, towards whom, why and as, we should do” according to Aristotle (2008, p.65). According to Koslowski (2000, p.71), apart from the Kantian theory and utilitarianism, two other major ethical theories need to be taken into account, namely, contractualism and consensualism. Contractualism is a moral directive which says that “explicit or tacit agreements for mutual benefits ought to be honoured” (Koslowski, 2000, p.71). Consensualism has a principle which prescribes that “all normative arrangements ought to be procedurally governed through free and open argumentative dialogue” (Koslowski, 2000, p.71). This aspect is particularly important and is usually mentioned as discourse ethics ( Koslowski, 2000, p.71). Applied ethics is an area where a particular issue is taken into consideration, and the question, which are the ethics and social responsibility associated with that issue is probed extensively. In the case of oil or mining industry, the concept of applied ethics has to be applied. All the ethical theories require that business houses be aware of a shared morality in the favor of public interest, which is not merely utilitarian but also based on Kantian, Rawlsean and Aristotelian in several aspects (Koslowski, 2000, p.22). The ethical stand put forth by utilitarianism make it mandatory for business houses to stay away from activities that spoil the happiness of the people and also from activities that cause any kind of unhappiness among them. Kant’s theory also has great application in business as it pronounces the societal duties and rights of individuals as well as organizations. In turn, the corporate houses are bound by a sense of duty which has to be logical as well as consistent. Rawls’ theory, by way of the principles of justice and fairness, denounces the use of force, fraud, deception, etc. in business. Also, based on Rawls’ ethical theory, it can be argued that a company should not harm the rights of its employees and also the individuals who, in one way or other, come across the activities of the company . All forms of racial, sexual, nationality-based and other forms of discrimination are covered under the second principle of Rawls’ theory. The Aristotelian ethical theory of virtue is what sets the basic frame work for the concept of corporate social responsibility. Oil industry is considered as one of the most polluting and dangerous industries in the world. It was the Piper Alpha gas production platform accident in the North Sea in 1988 that drew public attention to the safety and ethical issues in oil mining (Babusiaux, 2007, p.286). In 1990s, when the oil prices were very low, almost all the oil companies cut down the budgets set apart for pipeline maintenance which caused several accidents and consequent deaths of people (Jennings, 2008, p.408). The number of accidents was 250 in 1995 (Jennings, 2008, p.408). Such a lapse on the side of a business house draws attention to the ethical concerns that arise in the scenario. Here, the non-compliance with the ethical norms had violated the happiness of the people, their right to live and their right to be free from fear.   It was in 2001, that a law suit was filed against Talisman Energy, a Canadian private oil and gas manufacturer, by Presbyterian Church of Sudan and many individuals, for violating human rights in its actions of oil exploration, and extraction (Idahosa, 2002: 227-246). A more serious allegation was that the company was carrying out ethnic cleansing to get the land for oil mining (Idahosa, 2002:231). While examining this incident based on the ethical considerations, the first ethical aspect that comes into mind is the absence of discourse ethics from the side of the company which forced the affected to go to the court. It follows that there was no attempt to build a consensus as well. When a company is mining in a country or place where because of that mining, the community faces a threat to its livelihood and access to sustainable resources, all the ethical theories discussed above becomes relevant in that context. It has been observed that “Petroleum exploration activities generate large financial flows, and can lead to or exacerbate factionalism, or even fuel armed banditry ((Babusiaux, 2007, p.297). This is in naked violation of the justice and fairness rules of ethics. The pollution caused by oil companies is another aspect of the issue. In 1990, the major oil spill caused by Exxon company was an example of this kind of ethical non-compliance (Jennings, 2008, p.429). It was only six hours after the alarm was sounded that the employees of the company shut down the spilled pipeline (Jennings, 2008, p.429). This was in violation of the ethical norms like human happiness, duties, rules, justice and fairness and virtue as well. The workplace deaths in oil and gas industry are very high compared to other industries (Jennings, 2008, p.413). In almost all cases the retributive and compensative justice is neglected whenever there is a work place accident or an environmental accident. Instead, the company would resort to a legal battle, taking advantages of the loopholes in evidence and the law. Almost all the oil-mining industries have ethical charters and guidelines for conduct in place (Babusiaux, 2007, p.295). But many instances of non-compliance with them have been reported in the history of oil-mining industry ((Babusiaux, 2007, p.295). When the US oil companies lobbied the US Government to desist from bringing in climate change and protection legislation, that was in stark violation of the ethical principles of justice and fairness (Crane and Matten, p.501). All these ethical issues continue to haunt the oil mining industry even today. The theories need to be taken out of the academic shelves by the government and the public and put before the industry players for compliance as well as assimilation as corporate social responsibility. The all-encompassing terminology given by Aristotle to a holistic ethical view point, virtue, need to be projected as the long term goal in this matter. And Consensualism and Contractualism need to be adopted as the common norm by all the players in the field. Discourse ethics has to emerge and develop as the new hope in the horizon. References Aristotle. (2008). Ethics, (pp.47-65) Charleston: BiblioBazaar, LLC. Babusiaux, D. (2007). Oil and Gas Exploration and Production: Reserves, Costs, Contracts, (pp.295-97) Paris: Editions Ophrys. Boatright, J.R. (2006). Ethics and The Conduct of Business, (pp.41) New Jersey: Pearson Prentice Hall. Crane, A. and Matten, D. (2007). Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalisation, (pp.501) Oxford: Oxford University Press. Idahosa, P. (2002). Business Ethics and Development in Conflict (Zones): The Case of Talisman Oil, Journal of Business Ethics, 39, 227-246. Jennings, M.M. (2008). Business Ethics: Case Studies and Selected Readings, (pp.413-429) New Delhi: Cengage Learning. Koslowski, P. (2000). Contemporary Economic Ethics and Business Ethics, (pp.71) New Mexico: Springer. Mill, J.S. (2004). Utilitarianism (pp.6) Montana: Kessinger Publishing. Rawls, J. (2005). A Theory of Justice, (pp.3-208) Harvard: Harvard University Press. Rosen, A.D. (1996). Kant’s Theory of Justice (pp.82-83) New York: Cornell University Press. Read More