Business ethics and corporate governance

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SILABUS MATAKULIAH

BUSINESS ETHICS & CORPORATE GOVERNANCE

(MM 420003)

BAGIAN-1: BUSINESS ETHICS

TRIMESTER 2 – 2009/2010 MAGISTER MANAJEMEN UNIKOM

Deskripsi Matakuliah Bagian-1 [Business Ethics]

Matakuliah ini bermaksud memberikan dasar etika bisnis untuk mahasiswa pascasarjana Magister Manajemen. Topik-topik yang dicakup antara lain tentang relativisme etis, teori-teori utama etika normatif, hakekat perusahaan, tanggung jawab sosial perusahaan, budaya perusahaan, dan kepemimpinan etis dalam perusahaan. Topik etika bisnis fungsional seperti etika pemasaran, etika periklanan, etika keuangan, etika manajemen sumber daya manusia, dan lain-lain tidak dicakup disini, namun mahasiswa diharapkan bisa memperdalam sendiri sesuai kebutuhannya dengan menggunakan konsep-onsep dasar yang dicakup dalam matakuliah ini.

Tujuan Matakuliah Bagian-1 [Business Ethics]

Matakuliah ini bertujuan mencerahkan mahasiswa tentang perlunya mengimplentasikan etika dalam dunia bisnis yang ditekuninya. Ini bukan upaya moralisasi, melainkan mengajak mahasiswa untuk melakukan refleksi sendiri tentang perlunya etika dalam berbisnis. Pada akhir perkuliahan, mahasiswa diharapkan mempunyai pemahaman dasar etika dan mampu mengapresiasi, menganalisa, mendiskusikan dan mengevaluasi secara kritis problem-problem etika dalam dunia bisnis dan manajemen.

Metode Pembelajaran [Modes of learning]

Lecture/ Seminar (presentation and class discussion).

Sistem Evaluasi Matakuliah Bagian-1 [Business Ethics = total 50%] Class participation 10%

Examination 40%

Course Facilitator Gunardi Endro, Ph.D. gunardiendro@yahoo.com

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TOPICAL OUTLINE AND OBJECTIVES

[BAGIAN-1: Business Ethics]

Week TOPICS SUBTOPICS LEARNING GOAL REFERENCES

1 29/8 Introduction to Business Ethics Introduction to Business Ethics; Why be moral in business; ethical issues in business.

To know ethical problems in business and reasons why to study business ethics.

*Frederick, Post & Davis, 1992 *Marion, 1994 2 05/9 Argument against Ethical Relativism and Ethical Dualism Ethical Relativism; Absolutism; Ethical Dualism; Ethical Holism.

To understand why ethical relativism and ethical dualism are not defensible, and why religion is still relevant.

*Spaemann, 1989 *Gustafson, 2000 *Chanthavong, 2002 3 12/9 Main Normative Ethical Theories Utilitarian Theories, Kantian Ethics (Deontology), Virtue Ethics.

To comprehend how the main ethical theories offer to solve ethical problems. *Beauchamp & Bowie 1993 *Kidder, 1995 *Velazquez, 2006 4 10/10 Respecting Others as Human Beings

The importance of respecting others as human beings; the case of Transnational Business Ethics.

To understand why we should respect others as human beings.

*Dillon, 2008 *Smilansky, 2006 *Quinn & Patrick, 1994.

5 17/10

The Nature of Corporation and Corporate Responsibility Debate

The nature and moral status of corporation; the social

responsibility of corporation

To understand how ethical problems in business naturally emerge and how they lead to the corporate responsibility debate.

*Buchholz & Rosenthal, 1997 *Friedman, 1979 * Evan& Freeman, 1993 *Goodpaster, 1993 * Mokhiber, 1987 6

24/10

Corporate Citizenship

The separation thesis; Corporate Citizenship; Corporate Power

To understand the concept of corporate citizenship, the problem of democracy and corporate power.

*Freeman, 1994 * Carroll, AB & Buchholtz, 2003 *Weber, 1996 *Bader, 2006 7 31/10 Integrity Strategy, Corporate Culture, and Ethical Leadership Compliance strategy versus integrity strategy; Corporate culture; Ethical leadership

To understand the efficacy of the integrity-based approach and the role of corporate culture and leadership in creating ethical corporation.

*Paine, 1994 *Desjardins, 2009 *Nash & Kirsch, 1994

8 07/11

3 References

Session (1): Introduction to Business Ethics [28/08/2009]

Reading: FFrreeddeerriicckk,, WW..CC..,, PPoosstt,, JJ..EE.. && DDaavviiss,, KK.. ““EtEthhiiccaall DDiilleemmmmaass iinn BBuussiinneessss”” CChhaapptteerr 3

3 inin BBuussiinneessss aanndd SSoocciieettyy:: CCoorrppoorraattee SSttrraatteeggyy,,PPuubblliicc PPoolliiccyy,, EEtthhiiccss,, 7

7tthh eedd..,, 5511--7755.. SSiinnggaappoorree:: MMccGGrraaww--HHiillll,, 11999922..

Case : MMaarriioonn,, GGiilllleess.. ““ChCheevviiggnnoonn:: IItt AAllll WWeenntt uupp iinn SSmmookkee..”” IInn EEuurrooppeeaannCCaasseebbooookkoonn B

Buussiinneessss EEtthhiiccss.. EdEdss.. BrBriiaann HaHarrvveeyy,, HHeennkk vavann LuLuiijjkk anandd HoHorrsstt S

Stteeiinnmmaannnn.. 111111--2277.. HHeerrttffoorrddsshhiirree:: PPrreennttiiccee HHaallll,, 11999944..

Session (2): Argument against Ethical Relativism and Ethical Dualism [05/09/2009]

Reading: Spaemann, Robert. 1989, “Moral Philosophy: are good and evil relative?” Chapter 1 in Basic Moral Concepts, 1-12. New York: Routledge, 1989. Gustafson, Andrew. 2000 “In Support of Ethical Holism: A Response to

Religious Perspective in Business Ethics.” Business Ethics Quarterly 10:2: 441-50.

CCaassee : : Chanthavong, S. “Chocolate and Slavery: Child Labor in Cote d’Ivoire.” TED Case Studies 664(2002). http://www1.american.edu/edu/ted/chocolate-slave.htm.

Session (3): Main Normative Ethical Theories [12/9/2009]

Reading: BBeeaauucchhaammpp,, TT..LL.. && BBoowwiiee,, NN..EE.. ““NNoorrmmaattiivvee EEtthhiiccaall TThheeoorryy”” PPaarrtt--22 ooff CChhaapptteerr--11 i

inn EEtthhiiccaall TThheeoorryy aanndd BBuussiinneessss. .44tthh eded..,, 2020--4433.. NNeeww JeJerrsseeyy:: PrPreennttiiccee H

Haallll,, NNeeww JJeerrsseeyy,, 11999933..

KKiiddddeerr,, RR..MM.. ““OvOveerrvviieeww:: ThThee EtEthhiiccss ofof RiRigghhtt vveerrssuuss RiRigghhtt”” ChChaapptteerr 1 1 inin HHooww G

GooooddPPeeoopplleeMMaakkeeTToouugghhCChhooiicceess, , 1133--2299.. NeNeww YYoorrkk:: WWiilllliiaamm MMoorrrrooww &

& CCoo,, 11999955..

Case : Velasquez, Manuel G. “Unocal in Burma.” In Business Ethics: Concept and Cases, 6th ed, 119-22. New Jersey: Pearson – Prentice Hall, 2006. Session (4): Respecting Others as Human Beings [10/10/2009]

Reading: Dillon, Robin S. “Respect.” The Stanford Encyclopedia of Philosophy (Fall 2008 Edition). Eds. Edward N. Zalta. http://plato.stanford.edu/archives/fall 2008/entries/respect/>.

Smilansky, Saul. “Free Will and Respect for Persons.” Midwest Studies in Philosophy XXIX (2005): 248-61.

Case : Quinn, John F. and Joseph A. Petrick. “U.S. International Competitiveness and the Challenge of Expanding the Jurisdiction of Human Dignity.” In Emerging Global Business Ethics. 107-18. Eds. W. Michael Hoffman et al. Wesport CT, London: Quorum Books, 1994.

4 Session (5): TThheeNNaattuurreeooffCCoorrppoorraattiioonnaannddCCoorrppoorraatteeRReessppoonnssiibbiilliittyyDDeebbaattee[1[177//1100//22000099]]

Reading: BBuucchhhhoollzz,, RR..AA.. && RRoosseenntthhaall,, SS..BB.. ““ThThee NNaattuurree ooff tthhee CCoorrppoorraattiioonn..”” CChhaapptteerr 88 iinn

B

Buussiinneessss EEtthhiiccss:: TThhee PPrraaggmmaattiicc PPaatthh bbeeyyoonndd PPrriinncciipplleess ttoo PPrroocceessss.. 1

16666--7777.. NNeeww JJeerrsseeyy:: PPrreennttiiccee HHaallll,, 11999977..

Friedman, Milton. "The Social Responsibility of Business is to Increase Its Profits.” The New York Times Magazine, September 13, 1970.

Evan, W.M. & Freeman, R.E. “A Stakeholder Theory of the Modern Corporation: Kantian Capitalism.” In Ethical Theory and Business. 4th ed., 75-84. Eds. Beauchamp, T.L. and Bowie, N.E. New Jersey: Prentice Hall, 1993.

Goodpaster, Kenneth E. “Business Ethics and Stakeholder Analysis.”Business Ethics Quarterly 1:1 (1991): 53-73, reprinted in Ethical Theory and Business, 4th ed., 85-93. Eds. Beauchamp, T.L. & Bowie, N.E. New Jersey: Prentice Hall, 1993.

Case : Mokhiber, Russell. “Union Carbide and the Devastation of Bhopal.” The Multinational Monitor 8:4 (1987).

Session (6): CCoorrppoorraatteeCCiittiizzeennsshhiipp[2[244//1100//22000099]]

Reading: FrFreeeemmaann,, RoRobbeerrtt E.E. ““ThThee PoPolliittiiccss ofof StStaakkeehhoollddeerr ThTheeoorryy:: SoSommee FuFuttuurree D

Diirreeccttiioonnss..””BBuussiinneessssEEtthhiiccssQQuuaarrtteerrllyy 44::44 ((11999944)):: 440099--442211

CCaarrrroollll,, AA..BB.. & & BuBucchhhhoollttzz,, A.A.KK.. ““CoCorrppoorraattee CiCittiizzeennsshhiipp:: SoSocciiaall RReessppoonnssiibbiilliittyy,, R

Reessppoonnssiivveenneessss,, anandd PePerrffoorrmmaannccee..”” CChhaapptteerr 22 iinn BBuussiinneessss&&SSoocciieettyy::

E

EtthhiiccssaannddSSttaakkeehhoollddeerrMMaannaaggeemmeenntt, , 2299--5555.. MMaassoonn:: SSoouutthh WWeesstteerrnn –– T

Thhoommssoonn,, 22000033..

WWeebbeerr,, LeLeoonnaarrdd J.J. ““CiCittiizzeennsshhiipp anandd DDeemmooccrraaccyy:: ThThee EtEthhiiccss ofof CoCorrppoorraattee L

Loobbbbyyiinngg..””BBuussiinneessssEEtthhiiccssQQuuaarrtteerrllyy 66::22 ((11999966)):: 225533--99..

Case : Bader, Sharon. “A Corporate Class.” (Ch.1). “Conclusion: The Triumph of Corporate Rights.” (Ch.11). In Suiting Themselves: How Corporations Drive the Global Agenda. 1-8, 219-24. London: Earthscan, 2006.

S

Seessssiioonn ((77)):: IInntteeggrriittyySSttrraatteeggyy,,CCoorrppoorraatteeCCuullttuurree,,aannddEEtthhiiccaallLLeeaaddeerrsshhiipp [[3311//1100//22000099]]

RReeaaddiinngg:: Paine, L.S. “Managing for Organizational Integrity.” Harvard Business Review (March/April 1994): 106-17.

Desjardins, Joseph. ”Corporate Culture, Governance, and Ethical Leadership.” Chapter 4 in An Introduction to Business Ethics. 3rd ed., 72-90. McGraw Hill, 2009.

Case : Nash, June and Max Kirsch. “Corporate Culture and Social Responsibility: The Case of Toxic Wastes in a New England Community.” In Anthropological Perspectives on Organizational Culture. 357-71. Eds. Tomoko Hamada and Willis E. Sibley. Lanham, New York, London: University Press of America, 1994.

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Chocolate and Slavery:

Child Labor in Cote d'Ivoire

TED Case Studies

Number 664, 2002 by Samlanchith Chanthavong

http://www1.american.edu/ted/chocolate-slave.htm

I. Identification

1. The Issue

There is a surprising association between chocolate and child labor in the Cote d'Ivoire. Young boys whose ages range from 12 to 16 have been sold into slave labor and are forced to work in cocoa farms in order to harvest the beans, from which chocolate is made, under inhumane conditions and extreme abuse. This West African country is the leading exporter of cocoa beans to the world market. Thus, the existence of slave labor is relevant to the entire international economic community. Through trade relations, many actors are inevitably implicated in this problem, whether it is the Ivorian government, the farmers, the American or European chocolate manufacturers, or consumers who unknowingly buy chocolate. Discussions have arisen regarding how to respond to the problem. Issues mentioned include causes of slave labor relating to the economic system and to the country's dependence on an unstable export crop. There are also debates concerning the appropriate response from the chocolate industry, government officials, and consumers concerning whether there should be boycotting, establishment of government legislation to put "made by slaves" labels on products, or whether some type of international cooperation is needed to ensure improved working conditions. The complexity of the problem makes finding an effective solution a challenging task.

2. Description

Slavery and the Link to Chocolate

Slave traders are trafficking boys ranging from the age of 12 to 16 from their home countries and are selling them to cocoa farmers in Cote d'Ivoire. They work on small farms across the country, harvesting the cocoa beans day and night, under inhumane conditions. Most of the boys come from neighboring Mali, where agents hang around bus stations looking for children that are alone or are begging for food. They lure the kids to travel to Cote d'Ivoire with them, and then the traffickers sell the children to farmers in need of cheap labor (Raghavan, "Lured...").

Page 2 of 17 The horrendous conditions under which children must toil on the cocoa farms of the Cote d'Ivoire are even more jarring when the facts are juxtaposed with the idea that much of this cocoa will ultimately end up producing something that most people associate with happiness and pleasure: chocolate. The connection serves to illustrate that the existence of misery in one part of the world and joy in another part are no longer divorced as nations are connected together in a globalized web of trade. Thus, the pleasure that people from various nations around the world are deriving from these chocolate confections could possibly be at the expense of child slaves in Africa. The problem of child slavery then is not simply a faraway abstraction with no immediate implications for anybody else except those who are directly affected, but rather it is an issue that everybody around the world should be concerned about and demand action to eradicate.

Although news of child labor abuse in Cote d'Ivoire has only recently garnered public attention, these situations did not arise suddenly. Many interlocking factors have contributed to both creating and perpetuating conditions that have led to this form of modern slavery. In order to better understand the situation, this case study will explore the different aspects of Ivorian child labor and the cocoa trade. The case study will begin by providing an overall review of the problem. Afterwards, the case will examine some of the causes and effects of the situation, as well as efforts developed as a response to the abuse.

Human Trafficking and Slavery in General

In 1994, the United Nations General Assembly defined human trafficking as "the illegal and clandestine movement of persons across national and international borders. . . With the end goal of forcing women and children into. . .Economically oppressive and exploitative situations for profit…"(UNICEF). Although most people may not be aware that in the 21st century slavery still exists, reports declare that the number of slaves at present is the highest it has ever been (Free the Slaves). Presently, about 700,000 children and women are trafficked around the world annually. The UN says that profits for this trafficking amount to approximately $7 billion a year (Anti-Slavery International). Slavery, the Cote d'Ivoire, and the Rest of West Africa

A UNICEF study reports that 200,000 children are trafficked yearly in West and Central Africa. The trafficking occurs across many countries including Cameroon, Nigeria, and Ghana. Some countries are mere transit points, while others are either the suppliers or receivers of the children (Salah, p. 3).

In addition to the nations mentioned previously, two countries that are especially implicated in child trafficking in the cocoa trade are Cote d'Ivoire which is the receiving country, and Mali which serves as the supplier. Cocoa farms in the Cote d'Ivoire are violating children's human rights in two ways: they are involved in trafficking the children and are also the site of forced labor (Save the Children Canada).

Page 3 of 17 There are about 600,000 cocoa farms in Cote d'Ivoire (Child Labor Coalition). Estimates of the number of children forced to work as slaves on these farms are as high as 15,000 (Save the Children Canada). In addition to the very illegality of trafficking and hiring children workers, the implicated cocoa farmers subject the children to inhuman living conditions. Besides overworking them, the farmers do not pay the children nor feed them properly-often times they are allowed to eat corn paste as their only meal. The denigration also includes locking the children up at night to prevent escape. Although it is only one of many occurrences of bonded labor, Aly Diabate's experience on a cocoa farm still illustrates how this torture strips away the dignity of children.

Aly Diabate, who is from Mali, was eleven years old when he was lured in Mali by a slave trader to go work on an Ivorian farm. The locateur told him that not only would he receive a bicycle, but he could also help his parents with the $150 he would earn. However life on the cocoa farm of "Le Gros" (or "Big Man") was nothing like Aly had imagined. He and the other workers had to work from six in the morning to about 6:30 at night on the cocoa fields. Since Aly was only about four feet tall, the bags of cocoa beans were taller than him. To be able to carry and transport the bags, other people would have to place the bags onto his head for him. Because the bags were so heavy, he had trouble carrying them and always fell down. The farmer would beat him until he stood back up and lifted the bag again. Aly was beaten the most because the farmer accused him of never working hard enough. The little boy still has the scars left from the bike chains and cocoa tree branches that Le Gros used. He and the other slaves were not fed well either. They had to subsist on a few burnt bananas(Chatterjee, "How your...").

Yet when nightfall came, Aly's torture did not end. He and eighteen other slave workers had to stay in their one room that measured 24-by-20 feet. The boys all slept on a wooden plank. There was but one small hole just big enough to let in some air. Aly and the others had to urinate in a can, because once they went into the room, they were not allowed to leave. To ensure this, Le Gros would lock the room (Chatterjee, "How your...").

Despite the horrendous conditions that he was living in, Aly was too afraid to escape. He had seen others who had attempted escapes, only to be brutally beaten after they got caught. However one day, a boy from the farm successfully escaped and reported Le Gros to the authorities. They arrested the farmer and sent the boys back home. The police made Le Gros pay Aly $180 for the eighteen months he had worked. Now Aly is

Page 4 of 17 back with his parents in Mali, but the scars, both physical and psychological still remain. He admitted that after he first came back from the farm, he had nightmares about the beatings every night. Aly was fortunate that the authorities were alerted about the slavery that was present at Le Gros' farm, but many other children are not as lucky and are still being subjected to the beatings and overall dehumanization on these cocoa farms. (Chatterjee, "How your...")

Exploitation like Aly's is able to exist because of the secretiveness of the abuse. The Ivorian farms are usually small and located in areas around which most people do not travel. In fact, many actors in the cocoa trade have never even visited these remote farms. Even if one were able to visit the farms, sometimes it is difficult to tell whether the children have been bought or are part of the family (Chatterjee, "How your...").

Causes

While the complexity of such a grave situation as bonded labor prevents the simple categorization of the definite causes of the problem, there are some push and pull factors that many experts consider to be at least partly responsible for creating conditions ripe for slavery on cocoa farms.

Pull Factors.

Historical and continuing dependence: Cote d'Ivoire has historically been reliant on exports, whether it was coffee, timber, or cocoa as the country focused on an outward-oriented pattern of development. Cocoa first appeared in Cote d'Ivoire in 1880 on a plantation. Initially only the Europeans owned cocoa plantations there until World War I. As cocoa prices increased on the world market during this period, Africans themselves began to grow cocoa. However, initially after independence, coffee was the leading export good for Cote d'Ivoire. By the latter part of the 1970's though, cocoa supplanted coffee as the major commodity when a cocoa boom occurred as the government encouraged cultivation by offering various price incentives (Gbetiboao and Delgado, 115, 121, 125). This emphasis on cocoa production has been entrenched in the economy to the extent that many farmers are dependent on cocoa for their livelihood. At present, a substantial one-third of the Ivorian economy is based on cocoa exports, which has meant continued dependence on the world market prices for cocoa. This has not boded well for the country since cocoa is considered one of the most unstable commodities in terms of fluctuating market prices (Gbetiboao and Delgado p. 141). The profitability of cocoa depends on world prices that farmers' cannot control and also on natural conditions that affect cocoa yields, such as droughts (Grootaert, p. 24). For instance, since 1996 the price for a pound of cocoa beans has dropped from sixty-four cents to fifty-one cents. Consequently this negatively affects the farmers as they get less profits, so then they look for ways to cut costs by using cheap labor, driving them to even resort to use slave labor (Child Labor Coalition).

Page 5 of 17 Push Factors.

Poverty: Although some children come from Burkina Faso, Ghana, and Togo, most of the trafficked children come from Mali. Since Mali is one of the poorest countries in the world with a GDP of $850 per capita (CIA Factbook), people travel to Cote d'Ivoire to find jobs. Of the estimated 15,000 child slaves, the majority are from Mali (Save the Children Canada). With so few opportunities in their own countries, people often travel elsewhere in search of jobs, like the Malians do. If people are able to secure work, then they could send money back home to help their families for daily subsistence. Therefore, families allow their children to go away with people who turn out to be slave traders (Save the Children Canada). Most of the West African countries have extremely high levels of poverty, ranging from 40% to 72% (Salah, pp. 4-5). Consequently families need the contribution of their children's earnings to survive. These areas are precisely where the traffickers prey for desperate people (International Labor Organization). Many families work in the informal sector in order to earn a living because the economy has been experiencing such a low level of growth. The sluggish economy also provides disincentives for parents to send their children to school since an education does not automatically result in being able to secure a job (Grootaert, p. 22).

Culture: There is a cultural variable associated with the situation as well. The children of Ivorian farmers also help cultivate cocoa beans, so some farmers do not see why it is wrong to use the labor of other children (Raghavan, "Rescued…"). Aside from the implicated farmers though, in the culture of much of Africa, the sight of children working is quite common and not necessarily seen negatively. In fact, the percentage of children between 5 to 14 years old in the work force hovers between 40-50% (Grootaert, p. 22). Men have multiple wives and many children, so the kids start working at an early age to help their families. Schooling is so expensive for many of them, that the only alternative left is to work. Even in instances where forced labor is not involved, children in Africa help in the work of their parents, who are contracted laborers (Salah, pp. 4-5).

In other situations, families used to traditionally send their children away to live with another family in order to learn a special skill, as a substitute for formal-and more expensive-education. Thus, Cote d'Ivoire has been this destination of promise to where children traveled in hopes of making money or of learning something new and useful. However, with the deteriorating economic conditions, farmer's are "perverting" this tradition (Raghavan, "Lure..."). Meanwhile, many families still live in traditional communities and they have yet to become wise to a new reality, where their children could be abused the way that they are. Without realizing that society has become dangerous in this way, they entrust the locateurs with their children (Salah, p. 5).

Effects on Children

The effect of being sold into slave labor has the obvious physical scars from the constant beatings the children receive, their inhumane living conditions, and the practical starvation that the farmers impose on them. However, the effects of slavery do not merely affect the physical well-being of the children. They also suffer from emotional

Page 6 of 17 scars. Psychologists say that children subjected to slave labor are irrevocably changed. "Being a slave is often a process of systematic destruction of a person's mind, body, and spirit." Not only are families separated from each other, but the child slaves become more emotionally isolated (Free the Slaves). Even after they are no longer in slavery, the children are more fearful of other people and less confident of themselves. They also have trouble readjusting to their families (Raghavan, "Rescued..."). For the children that are lucky enough to escape, their physical and psychological scars will need a long time to heal.

Domestic and International Response

Cote d'Ivoire exports 43% of the cocoa beans used to make the world's chocolate. Americans alone spend $13 billion a year on chocolate. The beans are shipped to processing companies in the U.S. and then they are transported to the chocolate manufacturers who make the chocolate confections (Chatterjee, "How your..."). Because of the globalizing implications, domestic actors are not alone in taking action to resolve the problem. Consumers in the cocoa importing countries are demanding that their governments as well as the chocolate industry take definitive action to stop the human rights violations. Therefore, the issue of slave labor is not merely one that requires unilateral action. Rather, international actors such as foreign governments, NGOs, civil society participants, as well as other actors implicated either in supplying the labor or consuming its products are multilaterally helping the Cote d'Ivoire address the problem.

In the spirit of regional cooperation espoused in the human rights conventions, the Cote d'Ivoire has signed an agreement with Mali in September 2000 in response to the problem of child trafficking from Mali to Ivorian cocoa farms. The countries have pledged to punish people who use and exploit child workers and to send the children back to Mali. In addition, a program addressing the trafficking aspect of the problem is being established in the Cote d'Ivoire, called the UN Global Program against Trafficking in Human Beings (Global March).

Meanwhile when news of how chocolate made from Ivorian beans could be linked to child slavery, people everywhere were outraged. There was an attempt by concerned US senators to add an amendment to the 2001 Agricultural Appropriations bill that would require chocolate products to carry the label confirming that slaves were not used in cocoa production. However, the chocolate industry protested that the action would cause consumers to boycott the chocolate products, which would then hurt the cocoa producers even more. The less revenue they received, the more they might continue to use slaves. The bill never reached the House-Senate conference committee though, as the chocolate industry joined together to take action regarding eliminating child labor on cocoa farms to preclude official government action (Chatterjee, "House...").

The new action plan initiated by the U.S.'s Chocolate Manufacturers Association is called the Harkin-Engel Protocol, and it will be implemented with the support and cooperation of the US and foreign governments and various NGOs around the world.

Page 7 of 17 The plan's goal is to conform to the ILO Convention 182 in establishing mechanisms to end the worst forms of child labor. (Chocolate Manufacturers Association). In the first step of the plan, the industry implemented a formal survey conducted under USAID to examine the pervasiveness of child slavery in the West African region. They examined 3,000 cocoa farms during fall 2001. An advisory group consisting of the ILO, UNICEF, World Bank, Free the Slaves, USAID, and West African governments, have the responsibility of overseeing the survey. They are to monitor the survey, analyze its results and suggest actions.

After the industry finishes its survey, it plans to use the survey as a guide in creating pilot programs aimed at improving the economic conditions of cocoa growers. Other future plans include the creation of a system that monitors labor conditions and publicly reports labor violations. What is more the industry will fund a foundation that will play the role of keeping up with continuing actions that address child slavery.

By 2005, the chocolate industry plans to establish a system that publicly certifies cocoa as not having been produced by children, using a process that traces from where cocoa is supplied (Chocolate Manufacturers Association, "Signed Protocol").

*UPDATE: June 2003*

Industry efforts have achieved some progress on the action plan. The survey conducted by the International Institute of Tropical Agriculture, which examines the prevalence and causes of child labor in West Africa, was completed and released on August 2002. For information on the findings, see Child Labor in the Cocoa Sector of West Africa.

Furthermore, in late 2002 the cocoa and chocolate industries worked to implement pilot programs that directly address labor practices. Such programs include monitoring and creating awareness throughout society about non-exploitative labor practices. The other group of pilot programs aim to strengthen "the health and vibrancy of the local cocoa farming community," in order to improve the livelihoods of farmers so that they do not resort to employing child labor. Examples of such initiatives include the introduction of new farming technology and access to credit (Chocolate Manufacturers Association, "Global Chocolate Cocoa Industry...").

For continuous updates on the progress of these various initiatives, visit the Candy USA the web site.

3. Related Cases

Some additional cases that address West Africa and Human Rights: Africa :Depletion of rain forests

Bendl :Deforestation in Nigeria due to development Benin :Toxic dumping in Benin

Page 8 of 17 Ivorywd : Wood exports from Cote d'Ivoire cause deforestation

Nigeria : Italian toxic dumping in Nigeria

Saotome: Tourism leading to environmental problems Additional cases on West Africa and Food:

Angfish : Overfishing in Angola

Botswana : Cattle raising takes up large area

Cocoa : Cote d'Ivoire's cocoa trade harming the environment Senegal-groundnut : Senegal's dependence on groundnuts Additional cases on child labor:

Kathylee : Kathie Lee Gifford's clothing line produced by child labor Beedi : Child labor in India used to produce cigarettes

Nike : Use of child labor in Nike sweatshops in Pakistan

Rugmark : Labeling program that monitors child labor violations in Indian rug industry

4. Author and Date:

Samlanchith Chanthavong, April 2002

II. Legal Clusters

5. Discourse and Status: Agreement and In Progress

6. Forum and Scope: Cote d'Ivoire and Multilateral

7. Decision Breadth: 2

8. Legal Standing: Treaty

Cote d'Ivoire's involvement with not only child slave labor, but also with child trafficking makes promoting children's rights an urgent task in the human rights community. Ever since the beginning of the 20th century, there have been statements condemning human rights violations of children such as the Declaration of the Rights of the Child 1924 and 1959, both of which state that children have the right, among other important

Page 9 of 17 ones, to be protected from exploitation (UNICEF). However, none of them were legally binding. Presently though, some children's rights conventions have emerged that do carry the weight of international law. Two of the most prominent are the Convention on the Rights of the Child and the ILO's Convention 138 and 182.

Convention on the Rights of the Child

One of the most comprehensive conventions to address human rights violations of children is the United Nations' Convention on the Rights of the Child (CRC). The CRC names certain principles and standards that are aimed at protecting children in the social, political, and economic arenas. The nations who ratify the Convention are obligated to undertake concrete legislative action in order to comply with the standards. To ensure that the member countries comply, they must submit reports to show the progress of their efforts. Meanwhile, there is also an independent committee that monitors their actions. The Convention emphasizes that cooperation from these nations and civil society are important in order for action to be effective. Cote d'Ivoire has ratified the CRC and therefore is legally bound to vigilantly guard against violations of its principles. As the recent exposure of child slave labor in the cocoa farms illustrates, the country has to stepped up its efforts to address this problem. Especially relevant to the case of the Ivorian slave labor are the following articles: Article 1 defines a child is a person who is below eighteen years of age. Article 32 declares that nations must "recognize the right of the child to be protected from economic exploitation and from performing any work that is likely to be hazardous…or be harmful to the child's health or physical, mental, spiritual, moral or social development." Article 35 explicitly states that countries must stop child trafficking; that they must "take all appropriate national, bilateral and multilateral measure to prevent the abduction of, the sale of or traffic in children for any purpose or in any form (UNICEF)."

ILO Convention 138 and 182

The International Labor Organization, whose aim it is to create plans that encourage respect for human rights at work, is composed of national governments, worker's groups, and employers' organizations. Nations that ratify ILO Conventions must ascribe to the legally-binding standards of the document. The ILO has also set up monitoring committees to check up and report on countries' progress. The ILO Conventions 138 and 182 are especially pertinent to Cote d'Ivoire as they specifically address child labor (ILO).

Convention 138 was adopted in 1973 and established the minimum age for a child to be able to work. The age was set to fifteen or the age in which the children fulfill the minimum educational requirements of their countries. It calls for the absolute eradication of any form of child labor. Article 1 states that, "Each member…undertakes to pursue a national policy designed to ensure the effective abolition of child labor and to raise progressively the minimum age for admission to employment …to a level consistent with the fullest physical and mental development of young persons (ILO)."

Page 10 of 17 Since the ILO recognizes that child labor is often times a function of underdevelopment-an issue that realistically cunderdevelopment-annot be resolved quickly-Convention 138's goals are oriented towards the long-term. However, the cessation of certain types of child labor cannot be postponed no matter what development status a nation occupies. Therefore in 1999 the ILO adopted Convention 182 to swiftly combat "the worst forms of child labor." This category of labor as stated in Article 3 includes "all forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labor…" The Convention requires governments to employ every instrument in their power to end the worse forms of child labor, with the collaboration of workers' and employers' groups, and NGOs as mandated by Article 6. The Convention actually spells out a set of programs that the governments should follow, (including identifying the violations, educating society about the harmfulness of child labor, and effectively punishing the violators) and also how to go about taking those actions using data collection, regional coordination, and cooperation with civil society. Initially Cote d'Ivoire had not ratified either Convention 138 or Convention 182. However, the government has recently voted to ratify them and the ratification will be formally presented at the National Assembly in August 2002. This is an important step as it adds to motivate the Ivorian government to be more dedicated in its initiative to address child labor, especially with the slave labor occurring on the cocoa farms (ILO).

WTO and Labor Standards

Currently the WTO does not have any rules addressing labor standards. There is actually a debate going on concerning whether or not the WTO has the responsibility to include labor considerations as part of its trading principles. Some member countries argue that in order to improve labor conditions, actions such as trade sanctions by the WTO should be a potential instrument. These countries insist that trade and labor standards are necessarily related. Developed countries often cite, for instance, the GATT Article XX that allows governments to implement trade restrictions in order "to protect public morals and human life and health." However, the less developed countries contend that to officially dictate labor standards through the WTO is merely an excuse to impose a form of protectionism aimed at hindering these countries' competitiveness. Indeed the comparative advantage of many of these countries is inexpensive labor. Developing countries believe that attempting to give the WTO discretion over labor standards would go against the principles of the WTO. It is an institution whose purpose is to promote and ensure free trade, not to judge the morality of domestic policies of individual countries. As for Article XX, the countries argue that the statement pertains to what occurs in the country that is importing products, not the exporting countries and their policies (Grace, "In Focus…"). They say that once economic conditions improve, labor violations would decrease by themselves. At present the WTO leaves issues of labor to the International Labor Organization (WTO).

Cote d'Ivoire Labor Laws

The national labor laws of the country set the minimum age at 18 for 'hazardous work;' at 16 for 'light underground work;' and 12 for 'light agricultural work.' While the Ivorian

Page 11 of 17 Ministry of Labor's record on preventing violations of these laws in the formal employment sector is a success, they have not been as effective in the informal sector or in hidden areas (Dept. of Labor), which happen to be where the guilty cocoa farms are located. Meanwhile education laws have not been enforced effectively and therefore contribute to the ease in which children can drift into the employment sector. Legally, children must attend school until they are sixteen years old. However, many children who are only twelve or thirteen quit school due to poverty and end up going to work, without much prevention from local authorities (US Dept. of Labor).

III. Geographic Clusters

9. Geographic Locations

a. Geographic Domain: Africa b. Geographic Site: West Africa c. Geographic Impact: Cote d'Ivoire

10. Sub-National Factors:

No

11. Type of Habitat:

Tropical

IV. Trade Clusters

12. Type of Measure:

Import ban

13. Direct v. Indirect Impacts:

Direct

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product: Yes, cocoa b. Indirectly Related to Product: Yes, chocolate c. Not Related to Product: No

d. Related to Process: Yes, children's rights

Page 12 of 17

16. Economic Data:

Top 10 Countries with the Highest Chocolate Consumption (in pounds per head) 2000

Country Chocolate

Switzerland 22.3

Austria 20.1

Ireland 19.4

Germany 18.1

Norway 17.9

Denmark 17.6

United Kingdom 17.4

Belgium 13.2

Sweden 12.8

United States 11.7

Source: CAOBISCO)

17. Impact of Trade Restriction:

High

18. Industry Sector:

Food

19. Exporters and Importers:

Top exporter--Cote d'Ivoire; Top importer-- USA Cocoa beans used to make chocolate come from different farms in different areas of Cote d'Ivoire. The beans are mixed together in transport to importing countries and also in the processing factories. Consequently, there are no solid data reflecting the possible amount of cocoa beans in the world market that are tainted by slave labor. Since it is nearly impossible to differentiate between cocoa beans harvested by child slave labor and coca beans picked by free labor, there is no way to distinguish between chocolate products associated with forced child labor either.

Page 13 of 17 Top 10 Producers of Cocoa Beans (in thousands of tons) 1999-2000

Country Quantity of beans

Cote d'Ivoire 1,250

Ghana 410

Indonesia 410

Nigeria 170

Brazil 135

Cameroon 125

Ecuador 95

Malaysia 80

Dominican Republic 47

Colombia 40

(Source: Commodity Market Reforms: Lessons of Two Decades)

Cote d'Ivoire's position as leading producer of cocoa is not incidental. There is a long history of deliberate policymaking aimed at developing the cocoa industry. Ever since WWI, Ivorians have grown cocoa as they were to the high prices at that time. The Ivorian government even went as far as legislating policy incentives to encourage cocoa growing, which spurred the 1970's cocoa boom. During this time, cocoa exports doubled. The government also sponsored studies related to what activities were needed to ensure optimal cocoa growing . Agencies would research topics includng what type of technology was most efficient in growing cocoa, and what mechanisms were need to combat pests (Gbetibuouo and Delgado, pp. 121, 124).

Top Exporters of Cocoa Beans (in thousands of tons) 1998/1999

Country Quantity of beans

Cote d'Ivoire 977

Page 14 of 17

Indonesia 212

Nigeria 142

Cameroon 91

Papua New Guinea 48

(Source: Commodity Market Reforms: Lessons of Two Decades)

The leading exporter of cocoa beans is the Cote d'Ivoire in the period in which the most recent data is available. It exports 977 thousands of tons. Not surprisingly the Ivory Coast also produces the most cocoa at 1, 250 thousands of tons, as of 1999-2000. The country's production accounts for 43% of the world's cocoa production.

Top 10 Importers of Cocoa Beans (in thousands of tons) 1998-1999

Country Quantity of beans

United States 408

Netherlands 396

Germany 312

United Kingdom 206

France 112

Singapore 88

Russian Federation 78

Italy 71

Belgium-Luxembourg 60

Spain 55

Page 15 of 17

V. Environment Clusters

20. Environmental Problem Type:

Human rights abuse

21. Name, Type, and Diversity of Species:

N/A

22. Resource Impact and Effect:

High and Product

23. Urgency and Lifetime:

High and 20 years

24. Substitutes:

Education

VI. Other Factors

25. Culture:

Yes

26. Trans-Boundary Issues:

Yes

27. Rights:

Yes

28. Relevant Literature

References:

Online

Antislavery International. "Trafficking" section.

CAOBISCO. "Ranking of Consumption-Chocolate Confectionary" section.

Chatterjee, Sumana and Sudarsan Raghavan. "A Taste of Slavery: How Your Chocolate May be Tainted." Knight Ridder Washington Bureau. 24 June 2001.

Chatterjee, Sumana and James Kuhnhenn. "House Approves No-Slavery Labels on Chocolate Products Despite Industry Protest." Washington Bureau. 28 July 2001.

Chatterjee, Sumana. "Chocolate Companies Fight 'Slave Free' Labels on Products." Washington Bureau. 31 July 2001.

Page 16 of 17 Chocolate Manufactures Association. "CMA Launches Initiative to Address West African Labor Issues" and "Chocolate Industry Plan Summary" and "Global Chocolate, Cocoa Industry, Partners Meet in Ghana to Launch Region-Wide Program to Promote Responsible Cocoa Labor Practices" sections.

CIA Factbook. "Cote d'Ivoire," "Mali."

Department of Labor. "About Child Labor," and "Executive Order" section. Free the Slaves Organization. "Modern Slavery" section.

Global March. "Worst Forms of Child Labor" section.

Grace, Brewster. "In Focus: WTO Trade and Labor Standards." Light Party: April 2000. International Institute of Tropical Agriculture. Child Labor in the Cocoa Sector of West Africa. August 2002.

International Labor Organization. "Child Labor IPEC" section.

Raghavan, Sudarsan. "A Taste of Slavery: Lured by a Promise of Money." Knight Ridder Washington Bureau. 24 June 2001.

Raghavan, Sudarsan. "Malians Work to Free Child Laborers." Knight Ridder Washington Bureau. 24 June 2001.

Salah, Rima. "Child Trafficking in West and Central Africa: An Overview." (Paper presented at the Pan African Conference on Human Trafficking), Feb. 2001.

Save the Children Canada. "Children of the Border-Child Trafficking in West Africa' section.

State Department. "By the Sweat and Toil of Children," 1995. State Department. Human Rights Report, 2000.

UNICEF. "Child Rights" section.

Word Trade Organization. "Trade and Labour Standard" section. Books

Grootaert, Christiaan. "Child Labor in Cote d'Ivoire." The Policy Analysis of Child Labor: A Comparative Study. Ed. Christian Grootaert, et al. New York: St. Martin's Press, 1999.

Page 17 of 17 Gbetibouo, Mathurin and Christopher L. Delgado. "Lessons and Constraints of Export Crop-Led Growth: Cocoa in Ivory Coast." The Political Economy of Ivory Coast. Ed. I. William Zartman, et al. New York: Praeger, 1984.

Varangis, Panos and Gotz Schreiber. "Cocoa Market Reforms in West Africa."

Commodity Market Reforms: Lessons of Two Decades. Ed. Takamasa Akiyama, et al. Washington DC: World Bank, 2001.

Graphics

Chocolate clipart from www.free-clip-art.com Map from CIA Factbook

Page 1 of 7

CITIZENSHIP AND DEMOCRACY: THE ETHICS OF CORPORATE LOBBYING

Leonard J. Weber

Business Ethics Quarterly, Volume 6, Number 2, 1996, pp. 253-9 Book Review

The Lobbyists: How Influence Peddlers Work Their Way in Washington Jeffrey H. Birnbaum

New York: Times Books, 1993

While government relation is an important dimension of business activity, there is little discussion in the business ethics and corporate social responsibility literature regarding the goals and methods of business efforts to influence public policy decisions. Most business ethics texts and anthologies do not include the topic at all. Most "business and society" texts describe corporate political activity, but do not include any significant discussion of ethical guidelines to be followed.

There has been a growing interest in American society in recent years in government ethics, in clarifying and articulating standards of behavior for government officials and candidates for elective office. At all levels of government, ethics laws are becoming more detailed and mechanisms are being put in place for both education and enforcement. In 1992 the federal Office of Government Ethics published its "Standards of Ethical Conduct for Employees of the Executive Branch" and in 1993 began annual mandatory ethics training for employees of all departments of the Executive Branch. Since 1990 at least 15 states have passed major ethics legislation. In recent years, Chicago, New York City, and Los Angeles have adopted comprehensive ethics laws (by the City Council, by the approval of a new charter, and by a ballot proposal respectively). All three cities now have active Ethics or Conflict of Interest Boards and full-time staff.

Efforts to clarify standards of government ethics appear to be based largely on one fundamental principle of public service: government decision-making should put the public good above private interests. The details regarding financial disclosure, avoidance of possible conflicts of interest, restrictions on certain future employment, and limits on campaign contributions are various efforts to protect this commitment to promote the public good over private interests.

While more and more attention has been focused on ethical principles and standards for those in government service, very little has been done in a systematic way to clarify and articulate standards of ethics for those who seek to influence government officials and election

Page 2 of 7 outcomes. There have been legal restrictions placed on the acceptance of campaign contributions and on the acceptance of gifts from lobbyists, it is true, but as an outgrowth of government ethics, not as an outgrowth of lobbying or citizenship ethics.

The chapter on "Business in the Political Process" in Business, Government, and Society (Steiner and Steiner, 1994) closes with a hypothetical case regarding a U.S. Senate campaign and the offer of a large oil company to run, on their own, $350,000 worth of media ads for one of the candidates (a legal practice). As the case is written, the primary ethical issue is the one faced by the candidate (whether to accept massive support from a particular company). Students are not led to ask whether the company should refrain from such an undertaking. One discussion question does ask whether such independent expenditures by corporate PACs should be curbed, but asking the question whether such actions should be curbed defines the issue as one facing legislators and the public, not as an issue facing the company or the PAC. The case study recognizes that political candidates might, for ethical reasons, choose to refuse campaign assistance that is legal. It does not seem to recognize as clearly that businesses might, for ethical reasons, choose to forgo political activity that is legal and designed to further their goals.

As the above case suggests, many people recognize that conscientious politicians need to wrestle with how to prevent themselves from being unduly influenced by private interests (their own private interests or someone else's private interests). As a society, we are able to identify many of the ethical issues regarding good government and can articulate what is at stake. There seems to be no similar facility in recognizing and raising the ethical issues faced by conscientious managers regarding their firm's Political Action Committee or lobbying activities.

In The Lobbyists, Jeffrey Birnbaum, a veteran Wall Street Journal reporter, has provided an inside look at how corporate lobbyists operate in Washington. The book is an opportunity and an invitation to reflect upon the ethics of corporate lobbying.

The Story of Modern Day Corporate Lobbyists

During the 101st Congress (1989-1990), Birnbaum observed nine powerful lobbyists, nine men who allowed themselves to be followed for all or part of the two years as they went about their work of trying to influence Congress. The book was originally published in 1992. The 1993 version is only slightly updated and revised.

Birnbaum describes his book as telling "the story of the modern-day corporate lobbyist." (p. 4) It is an intriguing story. Individual personalities and specific episodes are described in some detail, and these little stories, taken together, tell the big story. The details need not engage us here; the big story can be briefly summarized.

Page 3 of 7 Sometimes the public's concern about undue influence is expressed as a fear that powerful corporations and their lobbyists "buy" votes in Congress through their campaign contributions and through the "wining and dining" of legislators. The reality, as described in The Lobbyists, is more subtle.

Birnbaum compares the lobbyists' trade with the board game "Go:" the object is to surround the opponent completely and to cut off any avenue of escape. "Blocking the decision-maker at every turn is the object of any successful lobbying campaign. Equally important is not to allow the decision-maker to know that he or she is being entrapped." (p. 4) Lobbying is powerful, but it is also discreet.

Lobbyists are successful in affecting the political process because they are successful in becoming an important part of the process. They provide lawmakers with information that lawmakers cannot get easily otherwise; lobbyists contribute and raise money that legislators need for re-election; they assist staff in drafting or revising legislation; they accompany lawmakers at many social and speaking events; they become friends with legislators. "The fact that lobbyists are everywhere, all the time, has led official Washington to become increasingly sympathetic to the corporate cause." (p. 4) Some lawmakers are, in effect, largely shut off from other perspectives.

Lobbyists sometimes become an important part of a legislator's lifestyle. From hunting weekends to business investments to campaign fund-raising to shaping legislation, many legislators and corporate lobbyists spend time together around common interests. The fact that many lobbyists were formerly employed in the federal government also contributes to the close relationships that have developed between lawmakers and corporate lobbyists.

The focus in The Lobbyists is on the actual ways in which corporate lobbyists do their work. Because of that, it is easy to get focused on the methods used to influence legislation. It is important to remember, though, that lobbyists are not setting their own agenda; they are employed by corporations and trade associations to work for particular business interests. As Wayne Thevenot, one of the lobbyists featured by Birnbaum, said about a disagreement between two business groups about proposed legislation: "I don't have a dog in that fight, and don't have a position. I will have a position as soon as I have a dog." (p. 32) Discussing socially responsible lobbying with an exclusive focus on hired lobbyists is like discussing socially responsible advertising with an exclusive focus on advertising agencies. A good starting point for thinking about lobbying ethics may be reflection on the appropriate role and goals of corporations in their political activity.

Page 4 of 7

Ethics and Corporate Political Activity

Political activity by business is often discussed in terms of the "right" to be involved politically. "Business has a legitimate right to participate in a political process, just as consumers, labor unions, environmentalists, and others do." (Frederick, Post, and Davis, 1992) The implication is that business should be involved in political activity precisely because there are others who are active and who are expressing other points of view.

Defenders of corporate Political Action Committees sometimes make reference to James Madison's comments on special interests in The Federalist Papers:

American democracy depends on active and diversified participation by special interests. As long as many interest groups are active in the system, they will check one another and in that way, one or a few select groups cannot dominate the system. (Quoted in Ford, 1994)

One can agree that democracy thrives when different points of view are being publicly advocated and yet not conclude that the system of lobbying and campaign financing that has evolved contributes to a healthy democracy. A question that may need much more attention is the question of what sorts of interests a business should pursue and promote through its political activity.

Mark Sagoff often makes a distinction that may be relevant here. He points out that our role as consumers is not the same as our role as citizens. In acting as consumers, we seek to acquire what we want for ourselves; each follows his or her own conception of the good life. In acting as citizens, on the other hand, we work with others to promote the good society. (Sagoff, 1986) In the terms used in discussions of public service ethics, to act as a consumer is to seek one's private interests; to act as a citizen is to seek the public good. To act conscientiously as a citizen is to be willing to subordinate private interests to the public good.

Seeking one's private interest is appropriate at times, but always or frequently acting as a consumer when one should be acting as a citizen is a threat to the well being of the whole community. Shaping public policy is one of those activities more appropriately understood as citizen activity than as consumer activity. As was pointed out above, we recognize this clearly in government ethics, where public service responsibilities are largely defined as putting the public good above private interests. When individuals and organizations seek to shape public policy, they should, it would seem, hold themselves to the same standard of putting the public good above private interests. When a business makes the decision to try to shape public policy through lobbying, it becomes involved in activity where, it could be argued, decision-making should be directed by the public-good-over-private-interests understanding of responsibility. While business decisions are generally made in the pursuit of private interests, lobbying and

Page 5 of 7 other political activity should, perhaps, be understood as a different type of activity, an activity to be governed by different goals and standards.

Birnbaum reports that Robert Malott, the CEO of FMC Corporation, quoted the comment of Reginald Jones, former CEO of General Electric, to explain why he was in Washington on a lobbying trip: "I can do more for General Electric by spending time in Washington and assisting in the development of responsible tax policy than I can by staying home and pricing refrigerators." (p. 197) The question that needs to be examined more deeply is whether one should be pursuing the same goals in lobbying as in managing the daily business of the company. Is the public good being served by lobbying undertaken as an extension of normal business activity?

Responsibility for Good Government

Businesses are involved in the political process because the decisions made in the political arena have significant consequences for business enterprises and for the economy. Unless businesses express their interests clearly and forcefully, it is argued, public policy that affects business may be too much influenced by other groups, such as labor unions, consumer groups, and environmentalists.

This interest-group model of democracy provides us with the image of a legislator surrounded by special interest groups, each of which is trying to persuade him or her that their concerns need to be addressed. The legislator is expected to listen to these various groups, but to rise above all the special interests and to act, almost heroically, for the public good.

Good government does require that public servants put the public good above private interests, but the burden should not be placed all on the government official. Government ethics rules can be very helpful in reminding public servants of the need to protect against undue influence on the part of those promoting private interests, but it seems unrealistic to expect that public officials will (be able to) act for the public good when they are surrounded by groups and individuals seeking private interests.

If organizations and individuals reduce citizenship activity to the pursuit of private interests, all the ethics rules in the world are not likely to produce good government. In a real sense, politicians in a democratic society mirror that society. If the interest groups that lobby the government are simply pursuing their private interests, the best that can be expected of government officials is that they be independent in judging what interest to endorse. The independent endorsement of one private interest over another is not, however, to be equated with working for the public good. As was noted above, the responsibility of public servants is to

Page 6 of 7 work for the public good, not private interests, whether those private interests are their own or someone else's.

Democracy and Unequal Power

Even those who raise no question about the corporate pursuit of private interests in lobbying may recognize that democracy and the good of society are threatened when some interests groups have much more influence than others. As William Frederick and his co-authors put it:

The principal danger arising from corporate political activity is that corporations may wield too much power. If that power were to "tip the scales" unfairly in favor of business and against the many pluralistic interests in society, both business and society would be losers. (Frederick, Post, and Davis, 1992)

Birnbaum's story strongly suggests that corporate lobbyists do have undue influence in promoting the interests of their clients. As was noted earlier, they dominate the attention of legislators by their constant presence. In addition, one of the major avenues to access is to make campaign contributions; many of the details in Birnbaum's story relate to campaign fund raising. The connection between contributions and influence is clear.

Few lobbyists entered the fray in Washington without first making sure they had a ready hoard of dollars to spread around. PAC and personal political contributions were expected of anyone who wanted to get his point across. Though money rarely bought votes outright, it did buy the lobbyist the chance to make his views known, a chance not everyone had. Access to the powers that be was

In the discussion of the danger of corporations wielding too much power, Frederick and colleagues conclude that a "careful use of business influence is therefore an ideal goal to be worked for...." (Frederick, Post, and Davis, 1992) In the corporate lobbying efforts chronicled in The Lobbyists, there is little indication of a goal to avoid undue influence. Indeed, if it is appropriate to consider interest-group democracy as a contest among groups representing different private interests, then there is no reason to do anything other than to seek to "win."

In order to limit lobbying to a "careful use" of influence, it would seem that a corporation (or any other organization) must acknowledge that there is a public good that they are responsible for promoting, a public good that is not equated with their private interests and that, at least at times, supersedes their private interests. Understanding lobbying as an extension of the business pursuit of private interests inspires no reason to limit one's influence. Understanding lobbying as a citizenship responsibility to work for the good of the larger

Page 7 of 7 community might, on the other hand, be more compatible with voluntary restraints on the use of influence and power.

Not Martyrdom, But a Vision

Birnbaum describes the persistent pursuit of campaign money as bothersome even to many lobbyists. They, too, are caught up in a system they think they cannot control. Campaign fund-raising functions are an important opportunity to be seen and to make an impression and lobbyists think, therefore, that they have no real choice. As Wayne Thevenot said about the possibility of passing up a fund-raising reception:

It's a hell of a risk to take. And we're part of the process. I don't write the campaign-financing rules. But it's the system, and I'm not going to play the martyr and try to change it singlehandedly. I'm just going to play it until they change it. (p. 169)

Some who read The Lobbyists may conclude that what is described is simply the way the system works; one might as well learn to play successfully in this arena until the rules change. Others may react differently: the system as it is presently working is not acceptable; it benefits the powerful and the wealthy at the expense of others.

Those of us who think that The Lobbyists, along with other such accounts of the influence of powerful interests in Washington, makes a compelling case for change are not necessarily asking individuals or corporations to be martyrs. What is needed, though, may be a new vision, an understanding that things could be different. Addressing the ethics of corporate lobbying is not just thinking about how to maintain some personal integrity in a potentially corrupting system. It is also thinking about how corporations should, ideally, understand their proper role in the political process. Until the vision changes, the rules of the game are not likely to change.

Bibliography

Ford Motor Company. "PAC News: A Newsletter for All Ford U.S. Salaried Employees." March, 1994. Frederick, William C., Post, James E. and Davis, Keith. Business and Society: Corporate Strategy, Public Policy, Ethics. Seventh Edition. New York: McGraw Hill, 1992.

Sagoff, Mark. "At the Shrine of Our Lady of Fatima, or Why Political Questions Are Not All Economic." In VanDeVeer, Donald and Pierce, Christine (eds.). People, Penguins, and Plastic Trees: Issues in Environmental Ethics. Belmont, CA: Wadsworth Publishing Company, 1986. Steiner, George A. and Steiner, John F. Business, Government, and Society: A Managerial Perspective. Seventh Edition. New York: McGraw Hill, 1994.

Page 1 of 38

Respect

Dillon, Robin S., "Respect", The Stanford Encyclopedia of Philosophy (Fall 2008 Edition), Edward N. Zalta (ed.), URL = <http://plato.stanford.edu/archives/fall2008/entries/respect/>. First published Wed Sep 10, 2003; substantive revision Tue Jan 2, 2007

Respect has great importance in everyday life. As children we are taught (one hopes) to respect our parents, teachers, and elders, school rules and traffic laws, family and cultural traditions, other people's feelings and rights, our country's flag and leaders, the truth and people's differing opinions. And we come to value respect for such things; when we're older, we may shake our heads (or fists) at people who seem not to have learned to respect them. We develop great respect for people we consider exemplary and lose respect for those we discover to be clay-footed, and so we may try to respect only those who are truly worthy of our respect. We may also come to believe that, at some level, all people are worthy of respect. We may learn that jobs and relationships become unbearable if we receive no respect in them; in certain social milieus we

may learn the price of disrespect if we violate the street law: “Diss me, and you die.” Calls to

respect this or that are increasingly part of public life: environmentalists exhort us to respect nature, foes of abortion and capital punishment insist on respect for human life, members of racial and ethnic minorities and those discriminated against because of their gender, sexual orientation, age, religious beliefs, or economic status demand respect both as social and moral equals and for their cultural differences. And it is widely acknowledged that public debates about such demands should take place under terms of mutual respect. We may learn both that our lives together go better when we respect the things that deserve to be respected and that we should respect some things independently of considerations of how our lives would go.

We may also learn that how our lives go depends every bit as much on whether we respect ourselves. The value of self-respect may be something we can take for granted, or we may discover how very important it is when our self-respect is threatened, or we lose it and have to work to regain it, or we have to struggle to develop or maintain it in a hostile environment. Some people find that finally being able to respect themselves is what matters most about getting off welfare, kicking a disgusting habit, or defending something they value; others, sadly, discover that life is no longer worth living if self-respect is irretrievably lost. It is part of everyday wisdom that respect and self-respect are deeply connected, that it is difficult if not impossible both to respect others if we don't respect ourselves and to respect ourselves if others don't respect us. It is increasingly part of political wisdom both that unjust social institutions can devastatingly damage self-respect and that robust and resilient self-respect can be a potent force in struggles against injustice.

The ubiquity and significance of respect and self-respect in everyday life largely explains why philosophers, particularly in moral and political philosophy, have been interested in these two concepts. They turn up in a multiplicity of philosophical contexts, including discussions of justice and equality, injustice and oppression, autonomy and agency, moral and political rights and duties, moral motivation and moral development, cultural diversity and toleration, punishment and political violence. The concepts are also invoked in bioethics, environmental

Page 1 of 6

Union Carbide and the Devastation of Bhopal

by Russell Mokhiber

The Multinational Monitor, Volume 8, Number 4, 1987 http://multinationalmonitor.org/hyper/issues/1987/04/index.html

At 2:30 a.m, on December 3, 1984, 40 tons of deadly gases spewed from the Union Carbide India Ltd. (UCIL) plant in Bhopal, India. In the next several hours thousands died, hundreds of thousands were injured and both UCIL and its U.S. parent company, Union Carbide, attempted damage control.

Praful Bidwai, a chemical engineer and journalist, described the situation three days later at a hospital in Bhopal, a city of 800,000. "No one is counting numbers any longer," Bidwai said. "People are dying like flies. They are brought in, their chests heaving violently, their limbs trembling, their eyes blinking from photophobia. It will kill them in a few hours - more usually minutes."

"It" was methyl isocyanate (MIC), a toxic chemical used at UCIL's factory in Bhopal to manufacture pesticides. UCIL was 50.9 percent owned by Union Carbide Corporation, the Danbury, Connecticut-based multinational. The MIC production facility at the Bhopal plant had been shut down for two months, but on the night of December 2, workers conducting routine maintenance noticed a leak. At 12:30 a.m. on December 3, the ground around one of the MIC storage tanks began to rumble. Water had entered the tank, triggering a chain reaction that created heat and pressure and led to the release of 40 tons of toxic gases into the atmosphere over Bhopal.

The release of gas from the Union Carbide plant killed from 2,000 to 5,000 people by conservative estimates, and injured another 200,000 people, at least 30,000 to 40,000 of them seriously, making it the world's worst industrial disaster.

Many of the severely injured suffer from respiratory ailments, permanent eye problems, and mental disorders. Medico Friend Circle, a Bhopal-based citizen's group, conducted a survey in 1985 which found that rates of spontaneous abortions were higher among women who conceived shortly after the gas disaster.

On December 4, the day after the gassing, former Union Carbide Chairman, Warren Anderson, accompanied by other company officials, flew from the United States to India to personally inspect the disaster. Upon arrival in the Bhopal area, Anderson and two local Union Carbide officials were arrested and charged with criminal negligence. Six hours after their arrest, the three were released, ordered to pay $2,000 bail, and Anderson was ordered to leave the country, which he planned to do in any event. The charges, an attempt by the Indian government to quell

Page 2 of 6 public outrage at the corporation and at the government - which was widely perceived as ineffective in bringing medical relief to the victims, were never pursued. Upon returning to the United States, Anderson told reporters that the purpose of his trip to India was to provide medical aid and seek information on the cause of the accident. But Carbide's offer of $1 million in disaster relief came to about $5 per victim, and the week after the accident, Carbide sent only one shipment of medicine, sufficient for 300 to 400 people.

Perhaps the more important reason Anderson went to India was to see that the company wouldn't be dragged into a costly legal battle. Anderson had good reasons for wanting to avoid litigation. Even though Union Carbide repeatedly claimed that the company was not at fault and that "the Indian company has nothing to do with the U.S. company," the facts point to a close and structured relationship between the two companies. While the Bhopal plant was operated by UCIL, it was controlled by Union Carbide's U.S. management.

The UCIL plant in Bhopal was storing MIC, a highly volatile and deadly gas. Although the plant had a refrigeration unit which was designed to keep the MIC storage tank at a temperature low enough to prevent a runaway chemical reaction, the unit was not working at the time of the accident. The MIC in the storage tank therefore was warmer than allowed by the plant's operating manual. "The refrigeration unit had been down over five months," Union Carbide officials admitted to a crowded March 20, 1985 press conference at Carbide's world headquarters in Danbury, Connecticut. The shutdown was a violation of plant procedure rules.

With the refrigeration unit out, it was crucial that instruments designed to measure the temperature and pressure of the gas in the storage tank be in good operating order. But the Temperature Indicator Alarm had been giving faulty readings for years. The Pressure Indicator Control was similarly faulty.

The plant also had an emergency scrubber system to neutralize gas in the event of a leak. But the scrubber system had been out of use for six weeks. The flare tower, designed as the final line of defense to burn off excess MIC, also was closed down 10 days before the fatal leak. Due to neglected maintenance, the line to the flare tower had corroded.

To make matters worse, the workers operating this faulty equipment at the Bhopal plant were inadequately trained. The leak was apparently triggered when an untrained worker attempted to wash a pipe that was not sealed. It was the mixture of water and gas that triggered the chemical reaction and caused the gas leak.

"Everything that could possibly go wrong had gone wrong," said Bruce Agnew, editor of Safety and Risk Management, the magazine of the British Safety Council. "Machinery failed; workers panicked; managers either took no decisions or took the wrong decisions."

If the cases against UCIL and Union Carbide ever go to trial, either in the United States or India, the evidence indicating reckless operation of the Bhopal plant could mean a verdict that would quickly deplete the assets of UCIL, estimated at $100 million. As half owner of UCIL, the loss of the Bhopal plant's assets is of concern to the parent, Union Carbide. Of much greater concern to Carbide, however, is the threat of losing its own assets. If a judge makes a legal determination

Page 3 of 6 that Union Carbide exercised control over its Indian subsidiary, then Carbide's entire net worth is open to the claims of the victims. And the evidence condemning Carbide on this point is convincing. The structure of Union Carbide's relations with its subsidiaries indicates strict authority and control by the parent company. UCIIL is listed on Union Carbide's consolidated balance sheet. Through its majority holding, Union Carbide had direct representation on the board of UCIL.

More importantly, Union Carbide was directly involved in the design and operation of the Bhopal plant. According to a report on December 27, 1984 in the Times of India by chemical engineer and investigative reporter Praful Bidwai, Union Carbide designed the Bhopal plant and was responsible for approving and inspecting all major equipment installed in the factory. The Bhopal plant was "grossly underdesigned," according to Bidwai.

"Thus even if each piece of equipment had functioned as designed and the plant as a whole had been properly maintained and operated - which it evidently was not - it would still not have been possible to avert the disaster," Bidwai concluded.

In February, 1985, Edward Munoz, a retired Union Carbide , official and former managing director of UCIL, claimed in a sworn affidavit that in the early 1970s Union Carbide insisted that large amounts of MIC be stored in Bhopal despite UCIL's objection. In the early 1970s, Munoz "represented the Union Carbide India Ltd. position that only token storage (of the chemical at Bhopal) was necessary, preferably in small individual containers, based both on economic and safety considerations," according to the affidavit. But Union Carbide's corporate engineering group "imposed the view and ultimately made to be built (at Bhopal) large bulk storage tanks patterned on similar Union Carbide facilities at Institute, W. Va.," Munoz asserted in his affidavit.

In the wake of the Bhopal disaster, a growing chorus of critics joined Munoz in disputing Union Carbide's view that "the Indian company (UCIL) has nothing to do with the U.S. company." A wideranging, seven-week investigation of the Bhopal disaster conducted by the New York Times

in January, 1985 concluded that Union Carbide "had the authority to exercise financial and technical control over its affiliate (UCIL) and the American parent used that right."

"Union Carbide had its finger on the pulse of the Bhopal plant all the time," Kamal K. Pareek, senior project engineer during the building of the Bhopal plant's methyl isocyanate installation, told The New York Times. "They just didn't appreciate the information they were getting." An internal Union Carbide report supports this view. Dated May 1982, the report, submitted to Union Carbide by a team of American experts, points out major safety concerns at the Bhopal plant, including deficiencies in instrumentation and safety valves, lax maintenance procedures, and high turnover of operating and maintenance staff. The report, stamped "Business Confidential," warned that the plant presented "serious potential for sizeable releases of toxic materials." The U.S. team made numerous recommendations to rectify the deficiencies at the plant, but according to reports from union activists, not one of the recommendations was ever implemented.

Page 4 of 6 After this report was sent from Union Carbide corporate headquarters to the Bhopal plant, union organizers appealed to U.S. management to improve safety conditions.

There were other warnings. Three months prior to the Bhopal gas leak, an internal Union Carbide memo warned that "a real potential for a serious incident exists" at Bhopal's sister plant in Institute, West Virginia, and that efforts to control the problem "would not be timely or effective enough to prevent catastrophic failure of the [storage] tank." The memo warned of a "runaway reaction" at the West Virginia facility.

Union Carbide's culpability in the Bhopal gas leak is compounded by a history of serious accidents at the Bhopal plant. Between 1978 and 1984, there were six accidents at the plant that should have tipped off corporate executives at world headquarters in the United States that something was wrong in India. On November 24, 1978 a fire at the alpha-napthol storage area burned out of control for 10 hours, resulting in $5 million in property damage. Plant operator Mohammed Ashraf was killed by a phosgene gas leak on December 26, 1981. Another phosgene leak in January 1982 seriously injured 28 persons. Three electrical operators were severely burned while working on a control system panel on April 22, 1982. On October 5, 1982, methyl isocyanate escaped from a broken valve and seriously injured four workers. Several people living in nearby communities also experienced burning in the eyes and breathing trouble due to the exposure. Two similar incidents were also reported in 1983.

Despite the number of serious accidents at the UCIL plant, few Bhopal residents knew that pesticides were being produced at the factory nor did they know of MIC's dangers. Even after the leak, Carbide took two hours to warn Bhopal's residents, many of whom lived in shanty towns surrounding the plant. The leak occurred about 12:30 a.m. on December 3, but the first alarm failed to warn most Bhopal residents until between 2:00 and 2:30 a.m.

"If they had [sounded the sirens] before or just after the gas leaked out, we would have known what to do," said one survivor. "We'd at least have had a chance to run. I lost my !i wife and two sons only because they didn't warn us. These people are criminals, butchers, worse than murderers."

Immediately after the accident, UCIL officials in Bhopal denied that MIC was hazardous. "The gas that leaked is only an irritant, it is not fatal," one UCIL official told reporters I immediately after the leak, but the MIC operating manual used at the Bhopal plant and adapted from a similar manual used at Bhopal's sister MIC plant in Institute, West Virginia tells another story. The authors of the manual, five Indian engineers, make abundantly clear the dangers of MIC: "MIC's limited exposure can be fatal. The chemicals involved in its production are highly toxic and hazardous in nature. Even the big corporations have refrained from making this lethal chemical due to the complexity involved in the operation."

Immediately following the Bhopal disaster, lawsuits were filed across the United States against Union Carbide on behalf of the victims and the government of India. But on May 12, 1986, Federal Judge John F. Keenan ruled that the lawsuits belonged not in the United States, but in India. The judge concluded that it would be more convenient and save U.S. taxpayer's money to have the Bhopal cases tried in India. That decision was appealed by lawyers for the victims.

Page 5 of 6 In the year preceding his decision, Judge Keenan, in his words, "labored long and hard" to promote a settlement, all "to no avail." Indeed, Robert Hager, a lawyer representing 20 religious and public interest groups, argued, in appealing the judge's decision, that the Bhopal victims had been "seriously prejudiced because Judge Keenan labored for a settlement too hard and too long." Arguing that "Carbide and its powerful Wall Street owners stood to lose probably S5 billion or more if the Bhopal case reached an American jury," Hager reasoned that "Carbide had to settle the case cheap, hide its assets, or get the case out of the U.S. courts to avoid or at least postpone potential bankruptcy."

Hager charged that by permitting a year-long delay before making his decision, Judge Keenan allowed Union Carbide the time to liquidate substantial assets and make extraordinary payouts to its shareholders reducing its equity available to pay for any judgment awarded the Bhopal victims. The payouts reduced equity from around $5 billion before the disaster to less than $700 million on the books by the end of 1985.

"Carbide's depleted equity will now enable it to defend by means of bankruptcy, against any Indian judgment substantially in excess of its settlement offer ($350 million) without significant loss to the company's pre-Bhopal owners," Hager said.

Hager's appeal was denied and the case against Union Carbide is slowly proceeding through the Indian courts.

Page 6 of 6 Union Carbide

Sales $9 billion

Assets $10.5 billion

Net Income $581 million

Employees 91,459

Rank in Sales 39

headquarters Danbury, CT

CEO Robert D. Kennedy

Products Prestone Antifreeze,

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