Environmental Constraints

Case 1: Environmental Constraint of Coca-Cola

In India, there exists widespread concern over how Coca-Cola is produced. In

particular, it is feared that the water used to produce Coke may contain unhealthy
levels of pesticides and other harmful chemicals. It has also been alleged that due
to the amount of water required to produce Coca-Cola, aquifers are drying up and
forcing farmers to relocate.

Pesticide use

In 2003, the Centre for Science and Environment (CSE), a non-governmental

organization in New Delhi, said aerated waters produced by soft drinks
manufacturers in India, including multinational giants Pepsico and Coca-Cola,
contained toxins
including lindane, DDT, malathion andchlorpyrifos — pesticides that can contribute
to cancer and a breakdown of the immune system. Tested products included Coke,
Pepsi, and several other soft drinks (7Up, Mirinda, Fanta, Thums Up, Limca, Sprite),
many produced by The Coca-Cola Company.

CSE found that the Indian produced Pepsi's soft drink products had 36 times the
level of pesticide residues permitted under Union regulations; Coca Cola's 30 times.
CSE said it had tested the same products in the US and found no such residues.

Coca-Cola and PepsiCo angrily denied allegations that their products manufactured
in India contained toxin levels far above the norms permitted in the developed
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world. David Cox, Coke's Hong Kong-based communications director for Asia,
accused Sunita Narain, CSE's director, of "brandjacking" — using Coke's brand
name to draw attention to her campaign against pesticides. Narain defended CSE's
actions by describing them as a natural follow-up to a previous study it did on
bottled water.

In 2004, an Indian parliamentary committee backed up CSE's findings, and a

government-appointed committee was tasked with developing the world's first
pesticide standards for soft drinks. Coke and PepsiCo oppose the move, arguing
that lab tests aren't reliable enough to detect minute traces of pesticides in
complex drinks like soda.

The Coca-Cola Company has responded that its plants filter water to remove
potential contaminants and that its products are tested for pesticides and must
meet minimum health standards before they are distributed.

Coca-Cola had registered a 11 percent drop in sales after the pesticide allegations
were made in 2003.

As of 2005, Coke and Pepsi together hold 95% market share of soft-drink sales in
India.

In 2006, the Indian state of Kerala banned the sale and production of Coca-Cola,
along with other soft drinks, due to concerns of high levels of pesticide residue On
Friday, September 22, 2006, the High Court in Kerala overturned the Kerala ban
ruling that only the federal government can ban food products.

Water Use

Environmental degradation in the form of depletion of the local ground water

table due to the utilization of natural water resources by the company poses a
serious threat to many communities.

In March 2004, local officials in Kerala shut down a $16 million Coke bottling plant
blamed for a drastic decline in both quantity and quality of water available to local
farmers and villagers.

In April 2005, Kerala's highest court rejected water use claims, noting that wells
there continued to dry up last summer, months after the local Coke plant stopped
operating. Further, a scientific study requested by the court found that while the
plant had "aggravated the water scarcity situation," the "most significant factor"
was a lack of rainfall. Critics respond that Coke shouldn't be locating bottling plants
in drought-stricken areas. In Plachimada, Coca-Cola is allegedly responsible for
creating problems for communities by creating severe water shortages and
polluting the groundwater and soil, destroying farms by draining them out
completely. The plant here used about 900,000 liters of water last year, about a

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third of it for the soft drinks, the rest to clean bottles and machinery. It is drawn
from wells at the plant but also from aquifers Coca-Cola shares with neighboring
farmers. The water is virtually free to all users. These farmers who have been
protesting say their problems began after the Coca-Cola factory arrived in 1999.

The company has been trying to regain the plant's license, fighting a case that has
gone all the way to India's Supreme Court.

Near the holy city of Varanasi in northeastern India, a local water official blames a
Coke plant — which has been the scene of many protests by NGOs and local
residents — for polluting groundwater by releasing wastewater into surrounding
land. A Coke official confirms there had been a drainage problem with treated
wastewater several years ago but says the company built a long pipeline to correct
it.

Indian environmental activist Vandana Shiva has stated that it takes nine liters of
clean water to manufacture liters of Coke though Coca-Cola says it is only an
average of 3.12 liters.

The case has been appealed and a decision is pending. Coca-Cola has set up a page
to rebut these charges at this site.

India

Coca-Cola's operations in India have come under intense scrutiny as many

communities are experiencing severe water shortages as well as contaminated
groundwater and soil that some assert are a result of Coca-Cola's bottling
operations. A massive movement has emerged across India to hold the Coca-Cola
Company accountable for its actions. The state of Kerala imposed a ban of colas
from the state only to be quashed by Coca Cola; the matter is pending in the
Supreme Court. The Plachimada plant in Kerala state, one of Coca-Cola's largest
bottling facilities in India, has remained shut for 17 months now because the village
council has refused to renew its license, blaming the company for causing water
shortages and pollution.

In Sivaganga District of Tamil Nadu state there were several protests and rallies
opposing the proposed Coca Cola bottling plant in fear of water depletion and
contamination. The president of the Gangaikondan panchayat, Mr. V. Kamson died
under mysterious circumstances two days after going back and forth in his
resentment against the upcoming Coca-cola bottling plant in the village. When
asked about the conflicting statements, he said: "I am under immense pressure
from the public, police and other quarters. So I have issued this statement." Five
other Indian states have announced partial bans on the drinks in schools, colleges
and hospitals.

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Case 2: Environmental Constraints of Wal-Mart

Wal-Mart has also faced accusations involving poor working conditions of its
employees. For example, a 2005 class action lawsuit in Missouri asserted
approximately 160,000 to 200,000 people who were forced to work off-the-clock,
were denied overtime pay, or were not allowed to take rest and lunch breaks. In
2000, Wal-Mart paid $50 million to settle a class-action suit that asserted that
69,000 current and former Wal-Mart employees in Colorado had been forced to
work off-the-clock. The company has also faced similar lawsuits in other states,
including Pennsylvania, Oregon, and Minnesota. Class-action suits were also filed in
1995 on behalf of full-time Wal-Mart pharmacists whose base salaries and working
hours were reduced as sales declined, resulting in the pharmacists being treated
like hourly employees.

Wal-Mart has also been accused of ethical problems. It is said that the Wal-Mart
employees are gender discriminated when trying to be hired and treated in the
work area. In Duke vs. Wal-Mart inc., this was a discrimination case on behalf of
more than 1.5 million current and former female employees of Wal-Mart’s 3,400
stores across the United States. (9th circuit 2007) Dr. William Bliebly who evaluated
Wal-Mart’s employment policies "against what social science research shows to be
factors that create and sustain bias and those that minimize bias” (Bliebly) and he
finished by saying, the men and women not being created equal in the workforce is
what Wal-Mart is doing and what they should essentially not be doing.

On October 16, 2006, approximately 200 workers on the morning shift at a Wal-Mart
Super Center in Hialeah Gardens, Florida walked out in protest against new store
policies and rallied outside the store, shouting "We want justice" and criticizing the
company's recent policies as "inhuman." This marks the first time that Wal-Mart has
faced a worker-led revolt of such scale, according to both employees and the
company. Reasons for the revolt included cutting full-time hours, a new attendance
policy, and pay caps that the company imposed in August 2006, compelling workers
to be available to work any shift (day, swing or night), and that shifts would be
assigned by computers at corporate headquarters and not by local managers. Wal-
Mart quickly held talks with the workers, addressing their concerns. Wal-Mart
asserts that its policy permits associates to air grievances without fear of
retaliation.

The 2004 report by U.S. Representative George Miller alleged that in ten percent of
Wal-Mart's stores, nighttime employees were locked inside, holding them
prisoner. There has been some concern that Wal-Mart's policy of locking its
nighttime employees in the building has been implicated in a longer response time
to dealing with various employee emergencies, or weather conditions such
as hurricanes in Florida. Wal-Mart said this policy was to protect the workers, and
the store's contents, in high-crime areas and acknowledges that some employees
were inconvenienced in some instances for up to an hour as they had trouble
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locating a manager with the key. However, fire officials confirm that at no time was
fire exits locked or employees blocked from escape. Wal-Mart has advised all stores
to ensure the door keys are available on site at all times.

Case 3: Coal Giant

A MINING firm has been fined £10,000 for flouting strict measures protecting one of
the nation's most important nature reserves.

In the ground-breaking ruling ATH Resources, one of the UK's largest coal
producers, was penalised after failing to alert a heritage watchdog over plans to
expand open cast mining at Grievehill, near New Cumnock, in Ayrshire.

The firm built a new road on protected peatland which is part of the Muirkirk
Uplands, a vast moorland site awarded special scientific significance in 2001.

Vehicles were already using the road, close to the Millstone Moss, by the time the
authorities were alerted.

The fine was the first to be imposed by a Scottish court under legislation to protect
such sites.

The area, one of the largest protected nature reserves in Britain, is renowned for its
huge variety of upland habitats and breeding birds.

The Yorkshire-based firm runs the Grievehill site through a subsidiary, Aardvark TMC
Limited and pled guilty at Ayr Sheriff Court to a charge of carrying out damaging
operations on the site without the prior agreement of Scottish Natural Heritage.

The court was told the company, the subject of the first corporate prosecution under
the Nature Conservation (Scotland) Act 2004, had already taken steps to repair the
damage to the "peat slip" area.

Ross Johnston, SNH area manager, said: "The Muirkirk Uplands has some of
Scotland's best peatland habitat and has high numbers of breeding birds, including
hen harriers, short-eared owl and golden plover.

"While we regret that the damage happened at all, we welcome this successful
prosecution in what was a highly complex case.

"We are committed to working constructively with developers to help find a balance
between economic and environmental objectives. But this case highlights the need
for developers to play their part if we are to deliver sustainable economic
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development on these sensitive nature sites."

Tom Dysart, area procurator-fiscal, who also leads efforts to prosecute wildlife and
environmental crime cases in Scotland, said: "The Crown Office and procurator-
fiscal service takes a robust approach to anyone caught breaking the environmental
laws which exist to protect Scotland's rich natural heritage.

"The fact that this case was placed on indictment, and would have been prosecuted
before a sheriff and jury had the company not admitted its guilt, demonstrates how
seriously these crimes are viewed by the Crown.

"This case also highlights the importance and value of joint working with other
agencies, including in this case Scottish Natural Heritage and East Ayrshire Council."

ATH, which produces more than two million tonnes of coal in the UK every year,
currently operates four mines in Ayrshire and Dumfries and Galloway.

It has run the site at Grievehill since 2005.

A spokesman for the firm said: "ATH Resources takes its environmental
responsibilities seriously.

"We worked closely with the relevant statutory authorities, and other interested
parties, to remediate the peat slip area as quickly and effectively as possible and in
process, incurred significant cost.

"We accept that we failed to inform Scottish Natural Heritage as quickly as we

should have, but this did not affect the overall outcome in terms of the slip or the
remediation works. This was acknowledged by the court, and reflected in the
penalty imposed on us."

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 Ethical Constraint

Case 1: Pfizer's Ethics Violations

"At Pfizer I was expected to increase profits at all costs, even when sales
meant endangering lives. I couldn't do that," said John Kopchinski, the sales
representative who blew the whistle on Pfizer’s illegal marketing practices of
Bextra, a now-discontinued medication approved for arthritis and menstrual pain.

Mr. Kopchinski was fired from the company in 2003. In hindsight, he won’t miss his
job. He’ll receive over $50 million from the US government for his efforts to
prosecute the $2.3 billion fraud settlement from his former employer—the largest
such settlement in US history.

Paying $2.3 billion for “fraudulent marketing" should cause every marketing
professional and salesperson to break into a nervous sweat. Why? Because murky
ethics aren't limited to Pfizer. They're amazingly common. They begin innocuously,
and then escalate. According to Mr. Kopchinski, what started as “aggressive
promotion” of Bextra mutated into illegal practices? As he put it, “the ethical line
kept moving.”

I’ve seen it over and over. Ethical risks are shrouded in code-speak: “we’re a
‘revenue-focused’ organization,” or “our company champions an ‘aggressive sales
culture.’” Sound familiar? Anyone who doesn’t take heed from Mr. Kopchinski’s
ethical-line observation faces the same risks. In Pfizer’s case, the problems didn’t
begin with stereotypical predatory salespeople and percolate upward—they began
at the top. Lies float, and so do corporate leaders who don’t set a good example--
belly up. As sales effectiveness consultant Christian Maurer wrote this week on
LinkedIn, “the fish starts rotting at the head.”

How can bright people working for well-regarded companies commit such ruthless
dishonesty, when they wouldn’t think of robbing a cabbie at gunpoint—arguably a
far less-heinous crime? By insulating the perpetrators from the victims. Here’s how
(please see the embedded links):

Sales commissions: According to the NPR health blog, a “$50 bounty (was)
paid to reps when they got doctors to add Bextra to the standard care for patients
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before and after surgery. These care protocols would direct patients to take Bextra,
often at high doses, a few days before a knee operation, for instance, and then
afterward to control pain.”

Telemarketing scripts directed to physicians: Salespeople were coached to

tout greater efficacy and safety for Bextra compared to Vioxx, a competing
painkiller from Merck. The US Food and Drug Administration never approved these
claims.

Sales culture: OK. Let’s call it by its real name—intimidation. "If you don't
aggressively sell your products . . . you're labeled a non-team player," Kopchinski
said, adding that only by promoting Bextra for unapproved uses could he achieve
management’s revenue goals.

You can see the evidence in clear black and white, and it’s all creepy. What was
Pfizer’s management thinking? Caught with its pants down, Pfizer cut a check for
$2.3 billion. Everybody—just shut up, leave the chicanery behind, and let’s move
on! Problem resolved. But is it? At the same time that jolly Pfizer managers were
gloating over PowerPoint slides showing escalating sales curves, people were
suffering or dying from taking medications for unapproved uses. Bad ethics don’t
get much worse than that, and even a $2.3 billion mea culpa won’t enable the
company to sweep its dark tactics under the rug. A plan to sell cigarettes in
elementary schools might have appeared more benign.

This brings Pfizer’s indiscretions to the everyday salesperson. We’ve all experienced
what happens when “baggage” is brought into a sales meeting. A salesperson is
often considered guilty before he or she proclaims innocence. It’s understandable.
Along with evaluating the performance and features of a product, prospects
scrutinize a salesperson’s motivations and integrity. But as Pfizer’s deceit has
shown us, prospects now need to look further, and to question whether the top
management of a vendor's company has a moral compass. The answer to that
question could reveal buyer risks that were previously unimagined.

Case 2: Citigroup (C) To Skip Severance Payments

The Wall Street Journal reports that five executives who left Citigroup (C) will not
get the balance of their severance payments which total several million dollars. The
reason behind the action is that the bank does not want to look bad to the
government and the public.

The tremendous compensation packages handed out by Wall St. firms continue to
be a source of tension for banks and Citi hopes to get the issue behind it.

The move by the financial firm raises a question about business ethics. Apparently,
each executive in question has a binding contract to be paid severance. Citi is

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gambling that none of them will sue the bank for the balance of its obligations to
them. But, why should they have to go to court in the first place?

The near-collapse of the financial system has, in many cases, put expediency ahead
of morality. It was greedy behavior that got Wall St. into its mess. Now, it is a series
of broken promises that may help it get out. By allowing Citi to withhold payments
from managers who are clearly due them, the federal government becomes an
accessory to the behavior, a full partner in walking away from contractual
obligations. If the government will aid and abet dissolution of moral codes within the
financial industry it has opened the door to making legal obligations convenient
instead of binding.

Recently, Harvard Business School students started signing ethics pledges

committing them to act ethically as they enter the business world. They may want
to avoid being recruited by Citigroup.

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 Regulatory Constraint
Case 1: Coca-Cola

Racial discrimination

In November 2000, Coca-Cola agreed to pay $192.5 million to settle a class

action racial discrimination lawsuit and promised to change the way it manages,
promotes and treats minority employees in the US. In 2003, protesters at Coca-
Cola's annual meeting claimed that black people remained underrepresented in top
management at the company, were paid less than white employees and fired more
often. In 2004, Luke Visconti, a co-founder of Diversity Inc., which rates companies
on their diversity efforts, said: "Because of the settlement decree, Coca-Cola was
forced to put in management practices that have put the company in the top 10 for
diversity.

Case 2: Google

Google Print

Google's ambitious plans to scan millions of books and make them readable through
its search engine have been criticized for copyright violations. Also, Association for
Learned and Professional Society Publishers and the Association of American
University Presses have both issued statements strongly opposing Google Print,
stating that "Google, an enormously successful company, claims a sweeping right to
appropriate the property of others for its own commercial use unless it is told, case
by case and instance by instance, not to.”

Copyright issues

Kazaa and the Church of Scientology have used the Digital Millennium Copyright
Act to demand that Google remove references to allegedly copyrighted material on
their sites. While Google potentially faces lawsuits when not removing such
links, critics argue that Google has an obligation to direct users to intended content
and not censor results based on copyright.

The New York Times has complained that the caching of their content during a web
crawl, a feature utilized by search engines including Google Web Search, violates
copyright. Google observes Internet standard mechanisms for requesting that
caching be disabled via the robots.txt file, which is another mechanism that allows
operators of a website to request that part or all of their site not be included in
search engine results, or via META tags, which allow a content editor to specify
whether a document can be crawled or archived, or whether the links on the
document can be followed. The U.S. District Court of Nevada ruled that Google's
caches do not constitute copyright infringement under American law in Field v.
Googleand Parker v. Google.
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On September 20, 2005, the Authors Guild, a group that represents 8,000 U.S.
authors, filed a class action suit in federal court in Manhattan against Google over
its unauthorized scanning and copying of books through its Google Library program.
Google states that it is in compliance with all existing and historical applications of
copyright laws regarding books. The publicized contract between Google and
the University of Michigan makes it clear that Google will provide only excerpts of
copyright text in a search. The contract says that it will comply with "fair use", an
exemption in copyright law that allows people to reproduce portions of text of
copyrighted material for research purposes.

On July 14, 2008, Viacom compromised to protect YouTube users' personal data in
their $1 billion copyright lawsuit. Google agreed it will anonymize user information
and internet protocol addresses from its YouTube subsidiary before handing the
data over to Viacom. The privacy deal also applied to other litigants including the FA
Premier League, the Rodgers & Hammerstein organization and the Scottish Premier
League. The deal however did not extend the anonymity to employees, because
Viacom wishes to prove that Google staffs are aware of the uploading of illegal
material to the site. The parties therefore will further meet on the matter lest the
data be made available to the court.

Google Watch

In 2002, the non-profit group Public Information Research launched a website

known as Google Watch, which advertised itself as "a look at Google's monopoly,
algorithms, and privacy issues.” The site raised questions relating to Google's
storage of cookies, which in 2007 had a life span of more than 32 years and
incorporated a unique ID that enabled creation of a user data log. Google Watch has
also criticized Google's Page Rank algorithms, saying that they discriminate against
new websites and favor established sites, and has made allegations about
connections between Google and the NSA and the CIA. Connection with the CIA has
been discussed by others as well. In February 2003, Google Watch nominated
Google for a Big Brother Award, describing Google as a "privacy time bomb." Google
now anonymizes its IP data after 9 months and its cookies after 18 months,
according to Google's privacy FAQ.

Case 3: VOIP business of GrameenPhone

Criticism and Penalty

GrameenPhone is a joint venture enterprise between Telenor and Grameen Telecom

Corporation, a non-profit sister concern of the internationally acclaimed
microfinance organization and community development bank Grameen Bank.
Telenor, the largest telecommunications company in Norway, owns 55.8% shares of
Grameenphone, Grameen Telecom owns 34.2% and the remaining 10% is publicly
held. GrameenPhone starts its operation in 1997 and becomes the leading Mobile
Company in Bangladesh; it has sometimes been criticized for establishing a
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monopoly market in the country, especially before Banglalink came into operation.
It also charges more for its service compared to other operators. But it claims that it
can charge higher as it gives the best value for money because only GP has the
widest and uninterrupted network coverage. It also is an advocate of a mobile
carrier oligopoly/monopoly citing apparent "consumer benefits" from a few
companies controlling the entire market. Illegal VOIP operations

October, 2007 fines: In October, 2007 the Government of Bangladesh fined

GrameenPhone USD 24.5 million for illegally depriving the government of revenue
by ignoring laws requiring private operators to use the state-owned BTTB land
phone network for international calls by its subscribers, when they used Voice over
Internet Protocol (VOIP) to receive such calls.

December, 2007 Office Raids: It soon emerged that GP was making a bigger
business out of VOIP operations than initially stated. They were providing a host of
ISPs and operators services that enabled VOIP. In December 2007, Grameenphone's
corporate office was raided by government agencies and documents were
confiscated. This was in connection to GrameenPhone providing VOIP equipment
and services to an ISP, AccessTel. This fact was not disclosed by GrameenPhone
when it was fined just two months ago. GrameenPhone representatives commented
“some additional irregularities were found” regarding GrameenPhone providing
special services to illegal VOIP operators.

January, 2008 Case Filed: In January 2008, Bangladesh Telecommunication

Regulatory Commission has filed a case against GP's two former CEO's and other
officials for involvement in illegal VOIP business.

For this illegal action, 11 top officials of GrameenPhone reigns from there job whose
are fully or partially responsible for the illegal actions.

Case 4: VOIP business of Banglalink

Banglalink pays Tk 1.25b fine for illegal VoIP business

Bangladesh Telecommunication Regulatory Commission (BTRC) has realized a part

of a compensation of Tk 1.25 billion (125 crore) from Sheba Telecom (Pvt) Ltd, the
operator of Banglalink mobile phone, for loss of government revenues due to the
company's involvement in illegal VoIP call termination activities, reports UNB.

International call termination to Bangladesh is a licensed service and is currently

reserved for state-owned telephone operator Bangladesh Telegraph and Telephone
Board (BTTB).

Law enforcing agencies and BTRC launched a crackdown on illegal VoIP operators
after the new interim government took office in January.

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During raids and investigations against illegal call termination businesses,
Banglalink's involvement was ascertained, said a BTRC press release.

It said Banglalink has already made partial payment of aforesaid amount and the
balance will be deposited to the exchequer shortly.

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