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Q1 Answer whether from utilitarian, rights, justice, and caring perspective, Unocal did the

right thing in deciding to invest in pipeline and then in conducting the project as it did. In your
view, and using your utilitarian, rights, justice, and caring assessments, did Unocal do the right
thing? Assume there was no way to change the outcome of this case and that the outcome was
foreseen was Unocal then justified in deciding to invest in the pipeline?

Unocal which were getting success in the beginning of the business went wrong when they
were not supposed to do wrong. Unocal activities which were being conduct in yadana field project
can be discussed from the 4 moral principles mentioned below.

Utilitarian perspective:

 By conducting the project, there were a far greater number of people got benefits from the
projects. A pure utilitarian would say that it was right for unocal to invest in Yadana
pipelines.
 Costs and benefits can be analyzed to see that was the unocal decision to invest in yadana
was purely utilitarian or not. Unocal and other companies built schools and along the
pipelines, small business were also growing, the project provided Burma citizens with
employments, infant mortality along the pipeline dropped. Thailand was able to enjoy
cleaner natural gas from 500-600 million cubic feet of gas that was piped in daily through
the pipeline instead of using dirtier fuel.
 Hundreds of Karen were used as forced labor and also force them to relocate so that they
can build the pipeline. Allegations of abuse and even murder by the Burmese government
for those who opposed the project.

Rights perspective:

Following points can be considered as from the case study.

1. The human rights watch and amnesty international issued the report claiming that the
Burmese army was using forced labor.
2. Brutalizing the Karen population to provide security for the Unocal Workers and
equipment.
3. A report of 1995 by Unocal also stated the human rights violation.
4. It appeared that based on the rights it was proven wrong for the Unocal to invest in yadana.
During the time period of contract the Unocal again violated the contract against the human
rights and used the forced labor.

Justice Perspective:

The justice in ethics is ensuring that all are treated fairly and equally. Unocal position can be
examined from the three types of justice.

1. Distributive justice: It is concerned with the fair distribution of benefits in the society. From
this point of view unocal made the wrong decision about the investment in yadana due to
the reports from the US, non -profit organizations and even Unocal’s own studies shows
that although the benefit of project could have in theory been distributed to all the Burma
via govt. development.
2. Retributive Justice: Punishment is morally accepted for breaking a law or rule. From this
view it appear that Unocal was not correct in its decision to invest in yadana as it was sued
both by federal and state courts in US.
3. Compensatory Justice: the just way to compensate people for what they have lost when
they were wrong by other. From this view Unocal was right in investing as Karen
population suffered as a result of the project were compensated through the out of court
settlement.

Caring Perspective

Ethics from caring point of view means the care to relations or care of people near to us.
From this perspective unocal was not right as the people of Karen were not treated in good manner
by Burmese army and they have violated the ethics of care in this way. The conditions could be
much better if the army treated the people of Karen in good manner.

Ethics is a kind of investigation and includes both the activity of investigating and the
results of that investigation - whereas morality is the subject matter that ethics investigates
(Velasquez 2006, p.8).Simply put - ethics deals with understanding and differentiating right from
wrong. The validity of Unocal activities in engaging in the Yadana field project can be discussed
from 4 (four) moral principles point of view, which are: the utilitarian, rights, justice, 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. In any situation, the “right” action or policy
is the one that will produce the greatest net benefit or the lowest net costs (Velasquez 2006, p.59
& 61). 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, we can see the costs and benefits of the project, such as: Unocal
and other companies built schools and roads along the pipeline, small businesses were also
growing, the project provided Burma citizens with employment, infant mortality along the pipeline
dropped, 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 $2.2 billion dollars throughout the life of the contract. However, the projects also
causing the costs, as follows: hundreds of Karen were used as forced labour and also forced to
relocate to accommodate the pipeline project, allegations of abuse and even murder by the
Burmese government for those who opposed the project.

Considering the above mentioned benefits and costs, a pure Utilitarian perspective would
say that it was right for Unocal to investing in the Yadana pipeline. By conducting the project,
there were a far greater number of people got benefits from the project, as opposed to the costs

Rights Perspective

In general, a right is an individual’s entitlement to something (Velasquez 2006, p.72).


When an entitlement is a result of a legal system, then it is known as a legal right. However, there
is a far greater right that encompasses all human beings or better known as moral rights.

The most famous foundation for moral rights requires that everyone be treated as a free
and equal person (Velasquez 2006, p.78), as it is stated at Imanuel Kant’s theory of Principle of
Ends, which is : never treat a person as a means to advance one’s own interest but rather as an end
in themselves. Moreover, Manuel Velasquez in his Business Ethics Concept and Case’s book also
mentioned that:

- Humans have a clear interest in being provided with work, food, clothing, housing and
medical care when they cannot provide for these themselves (Velasquez 2006, p.81);
- Humans have a clear interest in being free from injury or fraud and in being free to think,
associate, speak and live privately as they choose (Velasquez 2006, p.81);
- Humans have a clear interest in preserving the institution of contracts (Velasquez 2006,
p.81); From the case study, we find that references are made to the rights perspective of
ethics violation, including: the report that throughout 1993 to 1996, 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. Subsequently, 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 appeared that based on the rights
perspective, 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.

Justice Perspective

Justice is giving to each that which is his due. In essence, the justice approach to ethics is
ensuring that all are treated fairly, with equal distribution of benefits and risks. Taking into
consideration the information gathered under the Utilitarian and Rights perspective, it can be
examined Unocal’s position from the three different categories of justice, as follows:

- Distributive justice: distributive justice is concerned with the fair distribution of society’s
benefits and burden (Velasquez, 2006, p.88). From a distributive justice viewpoint, 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, 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, it appears
that the burden of the project has been focused on those living within the pipe line corridor;
- Retributive justice: proportionate punishment is morally acceptable for breaking a rule or
a law. From a retributive justice view point, it appears 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.
- Compensatory justice: the just way to compensate people for what they have lost when
they were wronged by other.(Velasquez, 2006, p.88). From a Compensatory Justice view
point, Unocal was right in investing in the Yadana pipe line as the Karen population who
had suffered as a result of the project were adequately compensated through the out of court
settlement.

Caring Perspective:

Ethics from a caring perspective emphasises the importance of relationships. Since caring about
other persons is the heart of the moral life and, thus ethics. It is suggested that by demanding that
we show care towards those who depend on us,be it our family, community or even country, we
as individuals run the risk of burn out and self sacrifice. Again drawing on the various reports from
the US State Department, non-profit organisations and even Unocal’s own studies, it appeared that
Unocal was not correct in investing in the Yadana project from an ethics of care perspective. This
is due to the nature of the ethics of care which emphasises compassion, kindness and the
development of relationship. Since the Karen people was treated badly or without compassion by
the Burmese army, and with the awareness of Unocal, it violated the ethics of caring perspective.

Q2 In your view, is Unocal morally responsible for the injuries inflicted on some of the Karen
people? Explain.

In ethics moral responsibility depends on 3 components. Knowledge, freedom and involvement.


Each factor contributes maximum in the moral responsibilities. Let’s see how Unocal was morally
responsible.

1. Knowledge:
 Before investment unocal conducted socio political analysis of the state of Burma
 Unocal made a contract with the consulting firm to review the 1991 Amnesty
international report, which documented abuses against the Burmese by the army
 Although it received the explanation of violation of human life in Burma as well as
risk that can occur, Unocal still continued investing in that project.
 Unocal hired consultants to investigate conditions in yadana region and again got
the report that human rights would be affected during pipeline construction.
2. Freedom:
 It was unocal’s free will to invest in the project and no one forced them to do that.
 The cleaning activity was done on behalf of the Unocal by the army which resulted
in relocation, forced labor, torture, murder, rape of the Karen’s by the Burmese
army.
3. Involvement:
 Unocal was involved in the injury held to the people of Karen by the army.
 The army was greatly involved in the project and was the main reason of causing
injury to the citizens.

To analyze whether Unocal is morally responsible for the injuries inflicted on some of the
Karen people, 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.
In his Business Ethics Concepts and Cases’ book, Velasquez showed that ethical principles
(utilitarianism, rights, justice and care), provide a systematic basis of moral standards that can be
used to determine and evaluate the moral value of a decision or assessment. In the case of Unocal,
before the investment was made, Unocal had conducted socio-political analysis of the State of
Burma. In fact, Unocal contracted a consulting firm to review the 1991 Amnesty International
report, which documented abuses against the Burmese by the army. Although it had received an
explanation of human rights violations in Burma, as well as the risks that might occur, Unocal
continued investing into the project. Subsequently, in 1995, 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. The violation of ethics or morals that obviously
occurred related to the case of Unocal in Burma, including:

 Violation of rights principle, given the reports that show the existence of human rights had
been widespread;
 Violation of justice principle, because the benefits and the costs were not evenly and
equally distributed;
 Violation of caring principle, because the loss of basic compassion for the people of Karen
by the Burmese army; 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, it was justifiable to continue. As such, Unocal should be held morally
responsible and accountable for the injuries inflicted on the Karen people.

Q3 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.

Unocal knew the conduct and track record of their local partner in Myanmar, and they
knew too that their partner had had an appalling reputation of human rights violation particularly
with regards to the Karen minority ethnic group. Notwithstanding these facts, they argued that
“engagement” instead of “isolation” is “the proper course to achieve social and political change in
developing countries with repressive governments” – to justify their venture into Myanmar, and
their partnership with the ruling military regime. Schwartz (2000) argued that Unocal’s decision
to choose engagement over isolation was founded on three reasons. First, they reasoned that their
activities were not causing any harm. They had complied with government legislations, abided by
environmental standards, and did not use slave labor. Second, they saw themselves as catalysts for
change, and therefore contended that their involvement would more likely support democratic
forces, stimulate change, increase connection with the outside world, and ensure that the military
government will not survive for long. Third, they claimed that their participation had been
legitimized by global institutions like the World Bank, the IMF, ASEAN, and other international
organizations that have been funding and supporting economic and social projects in Myanmar.
They had earlier refused to participate in a lucrative project in Afghanistan because the World
Bank, IMF, and others would not participate but Myanmar was different. Hence, they could not
see a reason for abstinence.

Engagement does not foster the much touted economic development that necessarily leads
to improvement of human rights, and a democratic government. Myanmar’s inclusion into the
ASEAN fraternity has proven that. The relationship between economic prosperity and growth and
political liberalization is complex, and there is therefore no causal link between democracy, respect
for human rights, and economic development
As the foreign investments do not translate into infrastructure or sustainable employment
for the population, it is our contention that a disengagement strategy, withdrawal, and banning
investments would not negatively affect the innocent population. It will instead achieve the goal
of cutting off the lifeline of the ruling government as it heavily relies on capital from the
investments. Taking a utilitarian view to achieve the greatest good for the greatest number, we
postulate that some arm-twisting is necessary (and justified) when the road of diplomacy has
ended.

The options between engagement and isolation became the questions that the global
community has put forth with regards to Burma. However, Unocal had consistently chosen
engagement since they believed that they could affect better social and political change than via
isolation policies. I agree with the Unocal’s preference of engagement rather than via isolation, to
affect changes in a country. Historically, 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.
For example, 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.
Nevertheless, despite continued pressure from the US, Cuban president Fidel Castro remains in
charge of the country. Likewise, sanctions against Iraq after the Persian Gulf War suggests that as
many as 567,000 Iraqi children may have died since the end of the first Persian Gulf War because
of economic sanctions imposed by the UN Security Council (Thawng hmung & Sarno 2006, p.42).
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 350,000 workers employed
in the garment industry in losing their job. Whereas, 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, regional or global interests)
allowed Vietnam to grow towards liberalisation and has become an active trading partner with the
US. The Unocal Yadana project can also be considered as an engagement policy. Among the
benefits derived were:

 Reduced infant mortality rates from 87 per 1000 to just 13 per 1000;
 Provided improving medical care, new and refurbished schools, electrical power, 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; In summary, although occasionally isolation
policies have produced point specific result, it is however usually accompanied by greater
social, political and economic fallout typically suffered by the general population. In
contrast, a policy of engagement does provide better overall outcomes socially, politically,
and economically, although sometimes it takes longer to provide visible results.