Group 9

GMBA June22
Michelin Assignment

Ayush Gupta GM22NS035

Naman Rajore GM22NS008
Prince Sharma GM22NS034
Saneep Jain GM22NS036
Smriti Mohta GM22NS002
 Allegations

In the state of Tamil Nadu Michelin was accused of damaging the

rights of the “untouchable” by construction of the largest tyre
factory in that region.
The above construction led to deforestation of 460 hectares of land
which was a source for the locals for agricultural and rural activities.

The land that Michelin had taken for lease is situated on a significant
drainage basin that provides three natural lakes with a huge amount
of the water used for local agriculture.
The NGOs Sherpa and CCFD-Terre Solidaire warned that people will lose access to its
primary source of subsistence if this source of water is lost.

Because of this construction 1500 untouchable familied will be affected and deprived of
natural resources

The NGOs asked the OECD to "condemn these violations" committed by Michelin and for a
fair review to be made in order to identify the possible impacts of the factory on the locals.

Michelin has already made a 600-million-euro investment in the factory but has not offered
any commentary on the matter. It reduced plant building in January in an effort to prevent
"any conflict with any community.“
The NGOs want Michelin to be held responsible for its conduct because they feel that the
facility violates the OECD Guidelines for Multinational Enterprises' values and standards.

The eviction of local populations from their homes without providing them with sufficient
compensation or resettlement plans or rehabilitate them appropriately.

Employees' labor rights were violated, and unsafe working conditions were provided to them.

Allegedly acquiring land from local authorities without initially consulting the people residing
there, a group made up primarily of Dalits who have lived there for more than 200 years.
 Michelin bought land without doing thorough studies.

No contact with the people present previously.

The local population's capacity to make a living was negatively

impacted.
Reasons for Michelin continued building despite pleas to pause. 
Issue
Conduction of human rights assessment neglected.

Environment's existing processes neglected.

No formal channels of consultation or community participation

were ever established.
 Effect on firm
Reputational damage Lega and financial Regulatory scrutiny
• Can lead to loss of trust among consequences • Government agencies responsible
stakeholders • Can lead to legal and financial for enforcing labor laws and
penalties environmental regulations,
resulting in increased oversight
and compliance costs.

Employee morale Ethical considerations

• Can lead to decrease productivity, • Can raise corporate responsibility
increased turnover, and difficulty and accountability
attracting new customers
 Internal • Employees
Stakeholde • Shareholder
• Management
r Factors for
internal and
external
• Local community Stakeholders
External • NGO’s
Stakeholde • Government officials
• Customers
r • Suppliers
Stakeholders

Local community members - Their livelihood has been affected by the construction of the
factory making them the most affected stakeholders.

NGOs - Considering the companies reputation and CSR, NGOs are important stakeholders
since they are the ones advocating for the local communities and have raised the
complaint.
Government officials – Being the regulators, they have a important role to play.

Employees - Considering Michelin's internal operations and productivity the reputation of

the company has an impact on their morale and conscience.
Shareholders – Having invested in the company they have an interest in the financial performance
of the firm and are concerned about the impact of the complaint on Michelin's stock price.

Management - they are responsible for making decisions that affect the company and its
stakeholders.

Customers - Negative publicity can impact the purchase decisions thereby affecting revenue and
market share of the company.

Suppliers - They would not be willing to be associated with a company that is involved in a scandal
as their ethics would come into question.
Stakeholder prioritization
The company's
shareholders, have a
The local community in Michelin's employees
financial stake in the
Thervoy and the should be given special
business and hence are
surrounding villages consideration since they
highly sensitive to any
should be given first are stuck between their
threats to its image or
priority, since they will be duty towards the firm and
bottom line. Michelin
affected the most by the their own personal ethics.
needs to be very
new Michelin facility. Michelin needs to make
transparent with its
Michelin should have an sure that have access to
shareholders about the
open discussion with the real time information.
problems it is facing, and
locals, listen to their Their concerns should be
the steps being taken to
concerns, and work to addressed, and efforts
address them. There
mitigate any harm that should be made to ensure
should be complete
could be done to their that their values and
transparency and it should
lifestyle and living personal ethics do not get
be ensured that no false
environment. questioned in any way.
claims or assurances are
made.
 Non-Governmental
Michelin's suppliers
Organizations: Groups
and customers: In case
To address the like the CCFD and
the matter is not
government's Sangam are working to
handled, Michelin's
concerns, Michelin get Michelin to modify
suppliers and
needs to have an open its ways since they're
customers would not
communication with worried about the
be willing to continue
them to work plant's effect on the
doing business with the
collaboratively towards environment and
company out of worry
resolving the matter human rights. An open
for its reputation.
and come up with a dialogue with these
Michelin needs to be
solution that benefits groups to address their
honest with its vendors
all the affected parties. concerns and find a
and customers and
solution that benefits
listen to their feedback.
everyone.
Leroy's team perspective

Conduct thorough assessment Engage with complaints

• Work with Dupont and with his team • Listen to their concerns
• Assessment of Plant’s impact • Understanding their perspective
• Identify ways to mitigate negative • Finding the common ground
impacts
Reviewing the Policies Transparency
and procedures • Top-down communication
• Identifying weakness and gaps • Reviewing updates Review of CSR initiatives
• Make necessary
improvements

Develop Communication Conducting site visits, Seek external expertise

Strategy meetings and guidance
 Michelin may have faced pressure to build the factory due to economic

Fraud reasons. The company may have been under pressure to generate
profits, which could have led to a lack of attention being paid to the

Triangle impact on local communities.

Michelin had the opportunity Michelin may have

to purchase the land from the rationalized their actions
Tamil Nadu government by arguing that the
without adequately factory would create jobs
consulting the local villagers, and provide economic
who had lived there for over benefits for the region.
two hundred years. The lack However, the company
of consultation provided the failed to consider the
company with the negative impact of their
opportunity to build the actions on the local
factory, which has resulted in community and the
several issues for the local environment.
community.
 Triple Bottom Line
TBL
Dimensions Social/People Environmental/Planet Economic/Prosperity

Cost savings through efficient

Employee safety and well-being,
Examples Community engagement and
development, Human rights
Energy efficiency, Waste
resource use, Increased revenue
reduction and recycling, Carbon through sustainable practices,
footprint reduction
Positive impact on the local economy

Employee satisfaction and turnover Carbon emissions, Water usage Revenue, Profit margins, Resource
Metrics rate, Community development and conservation, Pollution usage efficiency, Social impact and
indicators, Human rights violations levels return on investment

Employee retention rate, Energy consumption and Return on investment (ROI),

Key Performance Community outreach programs, renewable energy usage, Waste Economic value added (EVA), Market
Indicators (KPIs) Human rights due diligence and reduction rate, Environmental share growth, Local job creation and
remediation compliance and certifications economic development
Thank You