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Case 1, Chapter 1 – Slavery in the Chocolate Industry

1.) What are the systemic, corporate, and individual ethical issues raised by this case?

The most prevailed ethical issue of the case is slavery. The ethical issue of slavery is
systemic in nature because farmers in the Ivory Coast resorted to slavery and child
labor/trafficking to avoid high labor costs that cannot overcome by the declining prices of cocoa
beans. Though there are so many products in the food and beverage industry that use chocolates
as main ingredient, cocoa beans farmers still hardly get profit from their harvests caused by the
external changes on the trends of cocoa prices. Other systemic ethical issue that has been seen
in the case was the poor enforcement of the laws concerning child labor. The willingness of
local officials to accept bribes from people trafficking children has become a systemic ethical
problem of the Ivory Coast government. Local officials are expected to uphold the security and
rights of the children aggrieved rather than letting the system of slavery to continue exist.

Corporate ethical issues are also evidently seen in the case. Corporations like Archers
Daniels Midland Co., Barry Callebaut, and Cargill Inc. that stand as middlemen for the big and
well-known manufacturing companies are aware of the slavery happening in the Ivory Coast
since they are the ones that buy directly from the farmers. Since 2001, despite the efforts to
publicize children slavery and to prohibit the use of the beans from countries with existing
slavery started, U.S. chocolate manufacturing companies like Hershey’s, M&M Mars Inc., Nestle
USA, Kraft Foods and others disagreed with these efforts and continued to use cocoa beans from
the middlemen. Instead they fund the establishment of a certification system that was reported to
be unprogressive. The mere awareness of these companies of the existence of child slavery is a
serious ethical issue given that there were no concrete actions successfully made by the
companies to save children directly or indirectly.

The individual ethical issues raised by the case could mainly be attributed to the farmers
and traffickers involved and to the individual consumers/customers who are aware of the
problem, that buy products from the said companies as well. Kidnapping children, causing them
physical abuse, and preventing them to enjoy their rights as children are clearly morally wrong.
With the consumers who are aware of it, the continued patronization of the products causes the
problem to still exist. Buying products from these companies is somehow approving and
disregarding the company practices that victimize children for the sake of business.

2.) In your view, is the kind of child slavery discussed in this case absolutely wrong no matter
what, or is it only relatively wrong, i.e., if one happens to live in a society (like ours) that
disapproves of child slavery? Explain your view and why you hold it.

The child slavery discussed in the case study was absolutely wrong no matter what. It is
because of how they treated the children with ages 11 to 16: some of them were locked in
solitary confinement, they were forced to work 12 hours a day for no salary, many of them were
regularly beaten, and none of them received any schooling; the way they handle the children it

was very abusive. The group also agrees with the stand. In the context of Philippine culture, child
slavery is common but it is viewed mostly as child labor. Our state prohibits this kind of labor
but we cannot prevent this due to the poor economic status of our country that the government
could not provide funds to numerous poor people.

And because of the aforementioned problem, the poor people try to make their own way
to provide for themselves such as working at an early age of 5 years old for them to earn living
and get through each day. But here in our country, poor people at any age, it is a must for them to
work because poverty is prevalent. Although there are some cases that children are being
trafficked here in our country and being shipped to another place to work in a tobacco and cotton
plantations and some are being sold to syndicates for child prostitution which is also a form child
slavery. The children who are being trafficked are being mercilessly whipped and in extreme
cases, hanged. To sum it up, the moral issue here is the maltreatment of the young people. The
young people, especially in their formative years, they should be studying for their future and not
out in the streets or in some places doing heavy responsibilities beyond their abilities in a
hazardous environment while being treated like animals.

3.) Who shares in the moral responsibility for the slavery occurring in the chocolate industry?

People have the notion that they will be responsible for anything that happens as a
consequence of something they had control over and which they could reasonably be expected to
have anticipated, and that’s when moral responsibility comes in. For this case, there are many
groups that share moral responsibility for the slavery that is occurring in the chocolate industry.
There are three factors that determine moral responsibility. One is causality, this is when an
individual initiated the event that produced grievance and failed to prevent what he/she could
have prevented. The other two factors are, knowledge that the grievance would happen as a result
of the action he/she committed, and freedom to do it in his/her own free will.

The African farmers are one of the groups that share the moral responsibility of slavery,
because they are the ones doing it even though they know that should not be done. It is clear that
they know what they are doing but instead of preventing and stopping child slavery, they’re
continuously doing it and what's worse is that, they are the ones abusing the children and forcing
them to work. Another is the African government who has the control over Ivory Coast and its
people but does not enforced law to stop it. The government is aware that slavery is illegal in
Ivory Coast but laws are poorly enforced. The American chocolate companies are also
responsible for this event even if they are not directly inflicting the grievance in this case, they
are still aware of the nature of the cocoa farms. Other chocolate companies started to adopt
measures immediately after knowing the slavery that’s happening to the cocoa farms in Ivory
Coast. Many of the smaller companies avoided using chocolate from Ivory Coast and turned to
using chocolates that are processed. Therefore, the companies have control over the grievance-
they can pressure the farmers to stop what they’re doing- and may have prevented and stopped it.
Anyone that has read this case and is reading the case has a depth awareness and knowledge of
the unethical behavior- child slavery- happening in the chocolate industry. Surely, it will make

time and manpower. Given the kind of companies involved.S. It was also stated in the report that there is only one staff member working in the Ivory Coast.) Consider the bill that Representative Engle and Senator Harkin attempted to enact into a law. Compliance is about what a person must do but ethics is about what a person should do. it was stated that the companies do know that there is child slavery happening even before a documentary was made. To many. Kraft Foods and Archer Daniels Midland and lobbyists Bob Dole and George Mitchell started a lobbying effort to fight the “slave-free” labeling system. it must be followed by all but it is not an all-encompassing ethical principle. The ethical action would be to think of ways to stop it and there are numbers of ways to do it. Though there was an agreement. as well as in many countries in the world. their actions only serve as a lip-service. By stating all that. We say this because although they stopped buying the tainted cocoa beans. Representative Eliot Engel sponsored a bill that aims to ensure that the chocolates purchased by the consumers. When U. If those smaller companies are able to stop patronizing the cocoa beans from Ivory Coast. 4. What does this incident show about the view that “to be ethical it is enough for business people to follow the law”? In the case study. Child slavery is illegal in Ivory Coast. but not completely ethical. It may be because they can purchase cocoa beans for a really low price. Or it may also be due to the fact that taking actions would cost a lot of money. smaller than the well-known major chocolate companies. who stopped buying the tainted cocoa beans. One person doing the seminars and other activities that are not even sufficient to address the problem cannot really make an impact.this sets compliance to law and ethics apart. majority voted in favor of it. But before the Senate could consider this bill. A person does something not because the law says he must do it but because he knows it is the right thing to do. it is likely that they do have enough money to make action. we want to say that this incident tells us that following the law is not enough to be ethical. nothing at all. It can be said that compliance to the law is a minimum requirement. Ethics and compliance to law or the law itself are not the same. nothing was done. so it is clearly that it is unethical to continue patronizing the products that was produced as a result of child slavery. But even after finding out the situation. World Cocoa Foundation and the major chocolate producers signed to an agreement to establish a system of certification that would ensure that the cocoa beans they used were not produced by the use of child slaves. the companies Mars. they did not help in stopping the slavery. The Chocolate Manufacturers Association. Hershey. less and less effort are being exerted by the companies. This was later followed by the introduction of the same bill by Senator Tom Harkin. therefore it is considered as beneficial for them. but which never became a law because of the lobbying efforts of the chocolate companies. It can be said that what they did is following the rules and is ethical. There are companies. The companies clearly only wanted to protect their image by showing the people that they follow the law and are ready to take action. it is not impossible for the bigger .people think twice about their moral obligations just with the thought of buying a chocolate from the companies responsible for slavery. As the years went by. the companies weren’t able to fulfill their part.

However. However. Moral is defined as “the standards that an individual or a group has about what is right and wrong or good and evil”. Beam showed a “willingness to obey” Scrushy even though he did know what they were doing was wrong. Whether he “framed” it ethical or not he still knew that it wasn’t exactly right and did not have enough moral character to object. Beam has a “biased theory of the world” in that his thinking is that the adjustments are so small that no one would notice. The first obstacle was that Beam saw this issue as a business issue rather than a legal issue. Moreover. including them. This caused him to not “frame” this fraud as ethical. He rationalized his behavior by using the utilitarian view on the matter and justified the process by doing what he thought would better the largest amount of people. it didn’t start here. he did not think about the FBI and what would happen to those involved. Beam “diffuses the responsibility” to Scrushy. He feels as though he doesn’t have enough of a backbone to stand up to Scrushy even though he persuaded others to follow them and he himself only had to be persuaded the first time. He was worried about image and image alone. even stating that it got easier the second time. CASE STUDY 1: AARON BEAM AND THE HEALTH SOUTH FRAUD QUESTION 1 Which of the “obstacle” to moral behavior do you see at work in Aaron Beam’s behavior and thinking? In Scrushy’s? Under the first step. This writing made it sound as though Mr.companies to do so. In the second step leading to ethical behavior “making a judgment about what the ethical course of action is”. especially the investors. It started the first time he primped the ledgers to “look” better. Scrushy enjoyed all the luxuries of the lifestyle he afforded himself and did not care too much about what he had to do to keep it. following the rules is not always enough. In this cases. He thought it would hurt people if he did not adjust the books and helped the figures. The ethical way to go is to help in solving the problem rather than only stopped being involved because it will not solve the problem that is affecting many. it have strongly evidence that Scrushy lacked moral character altogether. Unless Beam was lying and Scrushy really didn’t know about it. and he was certain that he was going to do it “only this one time”. This proves that being legal does not always mean it is ethical and being ethical does not always mean it is legal. leading to ethical behavior “Recognizing or becoming aware that we are faced with an ethical issue or situation”. Beam used a little “euphemistic labeling” by saying that the company “just needed to get through the quarter” which . when they did get caught.

instead of choosing to do the right thing and cease his wrongful actions. This stage explains about good behaviour that is living up the expectations of those for whom the persons feels loyalty. For Richard Scruchy. Do you think that in Aaron Beam’s situation the “loyal agent’s argument” might have been valid? Explain. At this stage. Under the “loyal agent’s argument” Aaron Beam’s defense would be that Scrushy had ordered him to manipulate the accounting records or more specifically the general ledgers. it could be argued he knew this to be wrong but did it anyway. and shows his loyalty to after all Scruchy picked Beam to start the company with. We do not believe Aaron Beam could have actually used the “loyal agent’s argument”. at what stage of moral development would you place Aaron Beam? Explain. He believed the lies he was telling himself. Aaron Beam’s moral development would be a Level Two stage three which is Interpersonal Concordance Orientation. Based on Beam’s reluctances. in terms of Kohlberg’s views on moral development. Directing blame where it is not due seems like only trouble. but was pressured by Scrushy and a bit intimidated by him to the point at times of fear. QUESTION 3 In terms of Kohlberg’s views on moral development. the young person wants to be liked and thought well. which backfired and sent him down the hole much quicker. He have to follow the Scruchy decision which is he have to manipulate the general ledgers of account. From the beginning Scrushy and Beam both knew that the company had to appear profitable to satisfy investors and lenders and to later succeed in issuing and selling the company stock to the public. he is in level one stage two which is Instrumental and Relative Orientation. Beam had to know Scrushy would be asking or ordering him to make it happen. The evidence why he is in this stage are we can look at his . Aaron do this because he is in awe of Scruchy. and appears to want to please him as a person in authority. At what stage would you place Richard Scruchy? In terms of Kohlberg’s views on moral development. Aaron Beam’s in this stage because he knows right and wrong both conventionally and what the law says. He also tried to put the responsibility of the situation on Beam. The information shows that Scrushy and Beam already knew. QUESTION 2 Explain how Aaron Beam might have used the “loyal agent’s argument” to defend his actions. It is because he only thinks about what he need and own point view without think other person. Therefore. He was seen as reluctant to comply. affection. and trust such as family and friends.also rationalized this fraud in his mind.

Scrushy told Beam that he should do whatever he could to make their reports look even better. this means that Beam’s responsibility were not mitigated for his . In this case. The decision is from himself even someone force him to do something was wrong such Scrushy told him to do whatever he could to make their financial reports look even better. His responsibility was mitigated due to the fact that he as well as others was included in reporting false records.recognition. or alternatively. then again fall short by about 70 million dollar and until he retired in 1997. Yes. Aaron Beam is morally responsible for engaging in the ‘aggressive accounting’ methods he used to change financial reports so the net profit look larger. Martin. The pleasures he gains by all of this gives him reason to assume he is right in his own mind. one who encounters a car accident may be regarded as worthy of praise for having saved a child from inside the burning car. Aaron Beam was not morally responsible for changing the clinic reports to increase the company’s earnings. Hereby. lives To regard such agents as worthy of one of these reactions is to regard them as responsible for they have done or left undone. Livesay and a few others to alter the financial reports. In this case Beam not responsibility mitigated in any way because he continued to commit fraud when the company revenue fall short by 50 million dollar in 1996. Based on “Loyal Agent Theory”. But he must responsibilities with the other Owens. The moral responsibility is a when a person performs or fails to perform a morally significant action we sometimes think that a particular kind of response is warranted. Was his responsible mitigated in any way? Explain. Beam can tell that Scrushy are the ones who are responsible for the fraud because Scrushy ordered Aaron to do what he did. Beam has to make sure that company net profits look larger are achieved. one may be regarded as worthy of blame for not having used one's mobile phone to call for help. he has been married three times. QUESTION 4 Was Aaron Beam morally responsible for engaging in the “aggressive accounting” method he used? Explain. employee must follow what the employer said. Therefore. Were those who cooperated in his actions morally responsible for those actions? Was their responsibility mitigated? Do you think Richard Scrushy was morally responsible for the accounting fraud? Explain. Was he morally responsible for changing the clinic reports to increase the company’s earnings? Was his responsibility for his mitigated? Explain. Praise and blame are perhaps the most obvious forms this reaction might take. Related to this case. while charitable it appears he threw money around for self. For example.

he can share the responsibility with the rest of the people but everyone involved basically has some moral responsibility involved. will produce the greatest balance of benefits over costs for everyone affected. but he is the boss. One could argue that prohibiting the research that Roche was performing could inhibit future Chinese patients from receiving a drug that . Specifically. even though he did not work in the financial department. he is the people that responsible to the cases why Beam becomes unethical in work. i. TRAIDOS BANK AND ROCHE’S DRAG TRIALS IN CHINA QUESTION 1 Explain how utilitarianism might provide a defense for Roche and how a rights-based ethic might instead condemn Roche’s drug trials in China. We think that Richard Scrushy was morally responsible for the accounting fraud. He is fully aware of the consequences and directed Beam to make adjustment to the financial report. The inclusive term used to refer to the net benefits of any sort produced by an action is utility. Hence. Yes. Beam responsibility was mitigated because they all knew they were committing fraud and continues their bad habits even after Beam retired. utilitarianism holds that morally right course of action in any situation is the one that. It is because. Might provide a defense for Roche by stating that the organs taken from the prisoners with their consent for the purpose of Roche’s drug trials is acceptable because of: A utilitarian would argue that Roche was respecting the Chinese laws by first testing the drugs on Chinese patients. when compared to all other possible actions. the term utilitarianism is used for any theory that advocates selection of that action or policy that maximize utility. because others were involved for changing the financial report.action of aggressive accounting. Which of these two approaches is stronger or more reasonable? Explain the reasons for your answer. ANSWER Utilitarianism is a general term for the view that action and policies should be evaluated on the basis of the benefits and cost they produce for everyone in society.

iii. since ‘rights’ are up to the individual. They could also prove . if the organs are being sold for a monetary profit instead of research. The company should have looked into why the prisoners were executed because some of them were there because of their religious belief and the different opinions between them and the governments. Lives are on the line in both situations. This may lead a rights-based ethic to say that the prisoners from which the organs were being harvested could not be consenting because they were being held against their free will. Might instead condemn Roche’s drug trials in China because of: Rights are defined as an individual entitlement to freedom of choice and well- being. Roche’s CellCept had a beneficial plan for the Chinese society in creating a drug to help sustain life for their specific ethnicity. When it comes to the right-based ethic. The conditions of this study are questionable since there is no way of knowing if the prisoner would have volunteered or declined to be a part of this study. As a utilitarian. Knowing or not knowing where the organs were originating from wouldn’t be as important. The utilitarian might argue that Roche had no control over how the organs were harvested. Views differ from person to person and legitimate arguments can be made for both utilitarianism and rights-based. An ethic could prove that many prisoners being held were not criminals. ii. finding a resolution for the greater good is the most ethical and just decision. The company knew that up to ninety percent of organs came from executed prisoners. One view is that of the rights based ethic. Roche was in violation of the prisoner’s human rights. as long as their end goal of saving lives would be completed. this is an extremely controversial issue. it cannot be determined if the individual is deceased. A utilitarian measures utility of the benefits produced by an action. then this decision would be defined unethical by moral standard. An ethic may also argue that there is no way to know under what conditions the organs were being removed from such executed prisoners. could be necessary to sustain life. Which one is stronger and reasonable? In reference to which viewpoint being the strongest and most reasonable. More so. However.

Even though most people in China would have benefited by keeping the drug. We can held Roche responsible for not putting restrictions over patients who doesn’t have proper documents of their organ’s that proves the rightful owner’s information. The Chinese law on the matter of organ’s donation in so weak that people are massively misusing it to justify their illegal use as legal. that many organs were being harvested only for money. but on the other hand even if Roche put an effort to make sure they check the legal documented of the transplant organ. QUESTION 2 Is it ethical for Roche to continue testing CellCept on its Chinese transplant patients? ANSWER Before we continue to answer this question. The important question is if Roche move back or stop the testing CellCept will people in China also stop their unethical organ donations? So. The company felt that “the greater good would be served by going ahead with its drug tests even though many of the transplanted organs in its test patients were harvested from prisoners”. The ethic has a strong and more reasonable case in this situation. as mentioned in the case “the China government banned the sale of human organs . However. utilitarianism provides a defense for Roche because the company was looking to benefit the country of China as a whole given that they were in favor of the medicine that prevented patients from post-transplant organ rejection. Secondly it is proven that Roche is indirectly taking advantage of executed prisoner’s organs as the case states that “Up 90 percent of all transplant organs in China come from executed prisoners”. the process of testing the drug was tainted by the violation of basic human rights that even the people using the drug would have despicable. This view would have been a strong decision for society even though if you would only jeopardize the prisoners. we must know the more important question than Roche’s ethical responsibility over drug testing CellCept. on the other hand. the answer to this question will prove how more or less Roche has control and influence over the unethical use of organs.

as this organ transplant matter is connected to thousands of patient’s life risk. QUESTION 3 Is Traidos Bank ethically justified in excluding Roche’s stock from the funds it offers its customers? Consider your answer in light of the bank’s duty to invest money wisely and in light of its own conclusion the Roche was among “the best performing 50% of pharmaceutical companies in Europe.” Furthermore if we look at ethical responsibility more from the economic point of view compare to the individualist point of view.” was “transparent about sustainability issue” had a comprehensive position regarding genetic engineering and clear ethical guidelines for clinical trials”. those factors has a great influence on their sales. and stove to “reduce energy consumption and greenhouse gas emissions”. On a big picture one can say Roche’s CellCept is saving more innocent people’s life than guilty executed prisoners whose organs are donated. Morally it can be considered as wrong if one doesn’t care about transplant patient before its own death as eventually his or her organs are going to be wasted in the grave. Nevertheless. It is a responsibility of Traidos Bank to further carry an independent investigate and evaluation under the laws of ethical relativism on Roche case in . Similarly Traidos Bank has drop down Roche from their investment list just to maintain their brand images or else they will lose their sales.and require that living donors could donate their organs only to spouse. as medical transplants an ongoing day-to-day activity that can’t be stopped because of individual concerns or opinions. Traidos Bank has more concern about its brand image or else then to the ethical solution required for Roche’s transplant patient drug testing they just do not want to associated themselves with a company that has received Public Eye Award. blood relative or step and adopted families. enforced high “standards” for its suppliers. ANSWER From the commercial interest point of view the companies are made on positioning of their branding strategies and creating factor that differentiate them from other. and as per utilitarian ethics it is less important to consider guilty prisoner’s death-will decision over their organs than to consider transplant patient’s life risk at clinic. the organ trade continued to flourish in China.

and society. but that there were not enough businesses that met its criteria. customer. in utilitarian ethics most of the ethical decisions are prised by their outcome rather than cooperates standing up for principles. client. scaleable businesses in United Kingdom that were looking for equity to grow and most number of propositions also did not meet their requirements. High ethical standards always require continuous attention and support. the . Success means different thing to different people because they normally think within their boundaries instead of looking outside to other people performance. as in this case it is less about universal right or wrong and more ethical complex the issue. The Trados Bank should have think twice before banning a reputable brand like Roche. in reality success comes from achieving mutual interest between producer . QUESTION 4 Are Traidos Bank’s ethical standards set too high? ANSWER According to Traidos Bank closes social investment fund (2010). as Roche service has direct influence over human life. They were looking for mature. known as the Triodos Opportunities Fund. Businesses nowadays do not always needs fixed rules and regulations. Traidos might have to redefine their six principals in order to make fund available for social enterprise. the ethical standards of organization is too high because risky for client getting disqualify by Traidos Bank for anytime. they will have to come up with their ethical justification report that has no connection with the Public Eye Award. It main focus should be less on principle but more on outcomes. the bank said the fund.China. Based on the article. lake of CellCept drugs available in the market can create serious health risk to many Chinese patient’s lives. Traditionally Traidos Bank is looking at its own ethical criteria measures instead of Roche’s performance or outcomes. There should be a dialogue between two parties in which they will have to redefine the boundaries of its “ethical guidelines for clinical trials” before even putting the bam on Roche funding as this can create serious damage to Roche as they might not be financially prepared for such sudden actions. had been set up to make equity investments in growing social enterprises.

Answer whether from utilitarian. which are : the utilitarian. a. who need an open cultures in its cooperate environment where staff can discuss ethical issues in more depth and help to identify potential problems without destroying the relationship with their clients.59 & 61). was Unocal then justified in deciding to invest in the pipeline ? Ethics is a kind of investigation and includes both the activity of investigating and the results of that investigation .smart people at the top of organisations. rights. rights. 2013). In your view. and using your utilitarian. and caring perspective. Utilitarian Perspective : Utilitarian is a moral principle that claims that something is right to the extent that it diminishes social costs and increases social benefits.whereas morality is the subject matter that ethics investigates (Velasquez 2006. Unocal in Burma QUESTIONS 1. Simply put . the “right” action or policy is the one that will produce the greatest net benefit or the lowest net costs (Velasquez 2006. rights. justice and. who are able to consistently redefine the values the organisation that they agrees to follow. p. Unocal did the right thing in deciding to invest in the pipeline and then in conducting the project as it did. In any situation. The core concept of utilitarianism is the focus of good consequences for all stakeholders and not just the individual. To understand if Unocal decision to invest in the Yadana project from a purely Utilitarian perspective. and caring assessments.K. justice. The validity of Unocal activities in engaging in the Yadana field project can be discussed from 4 (four) moral principles point of view.ethics deals with understanding and differentiating right from wrong. did Unocal do the right thing? Assume there was no way to change the outcome of this case and that the outcome was foreseen. Ethical issues in businesses need to new features as regular items on board agendas (Christopher. caring perspective.8). p. who knows how to adjust the business in the ever changing commercial environment. we can see . justice. who needs to practices for promotion that reflect and strengthen those values.

clothing.2 billion dollars throughout the life of the contract. . speak and live privately as they choose (Velasquez 2006. food. the project provided Burma citizens with employment. The most famous foundation for moral rights requires that everyone be treated as a free and equal person (Velasquez 2006. infant mortality along the pipeline dropped. b. associate. Manuel Velasquez in his Business Ethics Concept and Case’s book also mentioned that : . the costs and benefits of the project. p. When an entitlement is a result of a legal system. then it is known as a legal right. Thailand was able to enjoy cleaner natural gas from the 500-600 million cubic feet of gas that was piped in daily through the pipeline instead of using dirtier fuel oil and Unocal was expected to earn $2. Rights Perspective: In general.81).81). there were a far greater number of people got benefits from the project. . By conducting the project.78). Moreover. allegations of abuse and even murder by the Burmese government for those who opposed the project. housing and medical care when they cannot provide for these themselves (Velasquez 2006. the projects also causing the costs. a right is an individual’s entitlement to something (Velasquez 2006. However. However. Humans have a clear interest in being free from injury or fraud and in being free to think. p. which is : never treat a person as a means to advance one’s own interest but rather as an end in themselves. p. Considering the above mentioned benefits and costs. such as : Unocal and other companies built schools and roads along the pipeline. as follows : hundreds of Karen were used as forced labour and also forced to relocate to accommodate the pipeline project. Humans have a clear interest in being provided with work. as opposed to the costs. small businesses were also growing. p. there is a far greater right that encompasses all human beings or better known as moral rights. as it is stated at Imanuel Kant’s theory of Principle of Ends. a pure Utilitarian perspective would say that it was right for Unocal to investing in the Yadana pipeline.72).

including : the report that throughout 1993 to 1996. as follows : . Taking into consideration the information gathered under the Utilitarian and Rights perspective. From the case study. it can be examined Unocal’s position from the three different categories of justice. From a distributive justice viewpoint. Justic e Perspective : Justice is giving to each that which is his due. c. we find that references are made to the rights perspective of ethics violation. p. Subsequently. non-profit organisations and even Unocal’s own commissioned study shows that although the benefit of the project could have in theory been distributed to all of Burma via government development. 2006.81). with equal distribution of benefits and risks. Distributive justice : distributive justice is concerned with the fair distribution of society’s benefits and burden (Velasquez. it appears that the burden of the project has been focused on those living within the pipeline corridor. p. Humans have a clear interest in preserving the institution of contracts (Velasquez 2006.88). From a retributive justice viewpoint. Retributive justice : proportionate punishment is morally acceptable for breaking a rule or a law. Unocal was not correct in investing in the Yadana project and conducting in the ensuing project as there was information at hand prior to Unocal entering the contract and again during the time of the contract which showed that unethical violations against human rights existed in Burma both directly and indirectly related to the project. the justice approach to ethics is ensuring that all are treated fairly. . . a 1995 report commissioned by Unocal also stated that human rights violations have occurred and continue to occur. All of reports were proves of indirect conflict with the rights perspective of ethics. it appears . In essence. It appeared that based on the rights perspective. it did appear that Unocal made the wrong decision to invest in the Yadana project due to the fact the various reports from the US State Department. the Human Rights Watch and Amnesty International issued reports claiming that the Burmese army was using forced labour and brutalising the Karen population to provide security for Unocal workers and equipment.

it is necessary to review the principles of ethical or moral that had been violated and how the four main principles of ethical translated into standard moral of the Yadana field project. kindness and the development of relationship. This is due to the nature of the ethics of care which emphasises compassion.88). it appeared that Unocal was not correct in investing in the Yadana project from an ethics of care perspective. Again drawing on the various reports from the US State Department. . be it our family. 2006. is Unocal morally responsible for the injuries inflicted on some of the Karen people ? Explain. community or even country. Caring Perspective : Ethics from a caring perspective emphasises the importance of relationships. Unocal was right in investing in the Yadana pipeline as the Karen population who had suffered as a result of the project were adequately compensated through the out of court settlement. In your view. it violated the ethics of caring perspective . To analyze whether Unocal is morally responsible for the injuries inflicted on some of the Karen people. Since caring about other persons is the heart of the moral life and. thus ethics. Compensatory justice : the just way to compensate people for what they have lost when they were wronged by other. non-profit organisations and even Unocal’s own studies. From a Compensatory Justice viewpoint. and with the awareness of Unocal. Since the Karen people was treated badly or without compassion by the Burmese army. we as individuals run the risk of burn out and self sacrifice. (Velasquez. It is suggested that by demanding that we show care towards those who depend on us. d. that Unocal was not correct in its decision to invest in the Yadana project as it was sued in both the Federal and State courts in the US and the ensuing bad publicity and boycotts by consumers in the US eventually forced Unocal out of business by way of a merger with Chevron. In his Business Ethics Concepts and Cases’ book. p. Velasquez showed that ethical principles . 2.

as well as the risks that might occur. Subsequently. . Unocal hired consultants to investigate conditions in the Yadana region and again obtained a report on the existence of various human rights abuses during the pipeline installation. Unocal continued investing into the project. Unocal had conducted socio-political analysis of the State of Burma. Since Unocal proceeded with the project based on the Utilitarian principle of Ethics in which the consequence of continuing the project outweighed the social costs involved. Violation of caring principle. it was justifiable to continue. I agree with the Unocal’s preference of engagement rather than via isolation. which documented abuses against the Burmese by the army. Unocal should be held morally responsible and accountable for the injuries inflicted on the Karen people. Although it had received an explanation of human rights violations in Burma. Violation of rights principle. because the loss of basic compassion for the people of Karen by the Burmese army. In fact. in 1995. (utilitarianism. Do you agree or disagree with Unocal’s view that “engagement” rather than “isolation” is the proper course to achieve social and political change in developing countries with repressive governments? Explain The options between engagement and isolation became the questions that the global community has put forth with regards to Burma. rights. including: . However. given the reports that show the existence of human rights had been widespread. because the benefits and the costs were not evenly and equally distributed. Unocal contracted a consulting firm to review the 1991 Amnesty International report. to affect changes . Unocal had consistently chosen engagement since they believed that they could affect better social and political change than via isolation policies. The violation of ethics or morals that obviously occurred related to the case of Unocal in Burma. Violation of justice principle. As such. In the case of Unocal. 3. before the investment was made. provide a systematic basis of moral standards that can be used to determine and evaluate the moral value of a decision or assessment. . justice and care).

000 workers employed in the garment industry in losing their job. politically. a policy of engagement does provide better overall outcomes socially. The Unocal Yadana project can also be considered as an engagement policy. The GM Bailout . it is however usually accompanied by greater social. p. In contrast. provided improving medical care. and agricultural development in the pipeline region. created of employment along the pipeline region which was and remains an extremely poor and underdeveloped region of Burma. isolation (isolation occurs when a country is isolated by another country or group of countries in the form of sanctions usually in the form of trade embargoes and/or travel & immigration bans) or unilateral sanctions have proven to be ineffective. regional or global interests) allowed Vietnam to grow towards liberalisation and has become an active trading partner with the US. In summary. electrical power. reduced infant mortality rates from 87 per 1000 to just 13 per 1000. commercial and financial embargo imposed on Cuba by the US Government for more than 40 years was the reason why Cuba became one of the poorest countries in the world. For example. the Clinton administration switched from a policy of isolation to one of engagement (engagement is where a country or a group of countries actively engage with a specific country with hopes that dialogue and bi-lateral communication would serve as a more effective platform to affect change for local.000 Iraqi children may have died since the end of the first Persian Gulf War because of economic sanctions imposed by the UN Security Council (Thawnghmung & Sarno 2006. . although occasionally isolation policies have produced point specific result. Nevertheless. Among the benefits derived were : .42). Historically. sanctions against Iraq after the Persian Gulf War suggests that as many as 567. and economically. new and refurbished schools. although sometimes it takes longer to provide visible results. in a country. The Myanmar Times & Business Weekly at its website suggests that the US ban on textile imports from Myanmar in 2003 resulted in tens of thousands of the estimated 350. despite continued pressure from the US. Likewise. Cuban president Fidel Castro remains in charge of the country. . Whereas. political and economic fallout typically suffered by the general population.

The bill didn’t pass the senate. GM applying for money out of the TARP funds Locke would believe GM (owners) have a right to property. Locke would state that the right of property is violated because the government took it away from the investors. There is no unemployment. lost the money and are now asking for new money to cover up their losses is against the idea of a fair distribution of wealth. they have no right to ask for the government’s help. This is because he too believes the right of freedom and property is violated. In socialism government is obliged to provide a job for each citizen. If the company is suffering from huge losses because the owners didn’t act responsibly. The U.S. In this case the bourgeoisie suppresses the proletarians and Marx wants to free the proletarians. . On the one hand the U. Marx would also disagree with the fact that GM (investors) ask for money from the U. because the tax payers did not agree with GM borrowing money from the government.1. Smith believes interventions into the market by government are undesirable and that human planners cannot allocate resources as efficiently as the “invisible hand” of the market. Smith and Marx would evaluate the events of this case in the following manner. so it’s indeed a violation of both rights. but at the same time each individual is allowed to dispose of what they own however they see fit. On the other hand proletarian workers are saved from unemployment.S. Smith would disagree with the fact that the U. Marx would be conflicting in opinion. The fact that the investors already spend the money on shares. government. Smith would disagree with the fact that GM asks for money from the U. Government uses tax money to save the bourgeois company. Government owning 61% of the shares of GM The fact that the U. The U.S. Smith believes in the invisible hand theory which states that markets will heal themselves. Locke.S. The right of property is important in his theory. Companies fall while others are rising and this is all part of a well- functioning economy.S. because the tax payers did not agree with GM borrowing money from the government and it is conflicting with the whole idea of the American economic system which he supports. He was against the idea of social hierarchy. Government owns 61% of GM shares violates Locke’s theory. without government interference.S government approves the loan money out of the TARP funds Locke believes the right of freedom and property is violated. government approves the loan out of the TARP funds.S. Government (citizens).

the good of others as well as the good of one’s self. Marx would approve of this but he would prefer to see the government owning100% of the shares. was it good or bad for the government to take ownership of 61% of GM? Explain why or why not in terms of theories of Locke. Socialism is characterized and defined by government ownership/control of capital or a forced pooling and redistribution of wealth.” It is also not ethical from a retributive justice viewpoint because the managers are not held responsible for the wrong decisions they have made. the bailout may defend the rights of well- being of GM’s employee’s as they can maintain their salary which would be ethical. 2. Governments should not interfere in economic systems and should not own any part of a company. “The profits are privatized and losses are socialized. Rights (looks at individual entitlements to freedom of choice and well-being) is not ethical because government money is the citizens’ money. The costs to society are likely to be higher without the bailout than with the bailout. It may also seriously distress the stock market and economy as a whole. Smith. Smith would again disagree with the fact that the U. I believe the bailout was mostly ethical in terms of utilitarianism because it focused on maximizing the overall good.000 workers and finances more than 400.000 retirees. Marx would see this as an oppression of the proletarians by the bourgeoisie.S. In this sense. 4. their right of freedom of choice may be violated here because the citizens cannot choose whether to bailout GM or not. when caring about citizens in general it may not be ethical because the profits of GM were not redistributed to citizens either. the government may start earning a profit in the future. As such its bankruptcy would directly harm millions of people. and Marx. Caring about the employees or people who are otherwise dependent on GM the bailout seems ethical. However. Moreover. If the company can reorganize itself. The ideologies implied by the statements signed are that moving the free market based economy is a dangerous step closer towards socialism. Since 10% of the shares are still left with the old shareholders. 3. I believe that the bailout should have been done. Justice (looks how benefits and burdens are distributed among people) is not ethical because the managers of GM were allowed to enjoy its profits during its healthy years while the taxpayers have to bear the losses. GM employs more than 200. . for example the choice to lock GM into the SUV market. Without the bailout GM would not have been able to borrow money from the banks and it would have gone bankrupt. Marx believes that property should be owned by the people and not by the private few. As economist Joseph Stiglitz states. However. GM has been a largely profitable company for many years. government owns 61% of GM’s shares. the bailout is not ethical in terms of rights. In your judgment.

. which make the government take the most control over the company.I think it is wise to say that it is better for the government to take 61% of GM. Because with the government intervention. The government is also help the company financially and since it was the government the finance could be more stable rather than being held by a certain company or public. it could avoid free market monopoly which means the government holds highly as regulator of the market.