Issue #43
Last Update December 24, 2005
International Corporate Murder? by David Katz Philosophy majors are often considered by others to be impractical students of a discipline that leads to no jobs. Philosophers, however, are badly needed to make sense of a complex world and give guidance to the perplexed. Unlike priests, ministers, rabbis and imams, they can be a source of non-doctrinal ethical guidance. Nowhere is this more needed than in the business world.
Traditionally, the responsibilities of a corporate executive have been limited to the bottom line, and to a lesser degree, to the employees of the corporation. Ethical guidelines in business are mostly restricted to ensuring the fulfillment of legal requirements. Being a good corporate citizen is viewed more as voluntary exercise in community relations than as a fundamental requirement of management. When businesses were local, community pressure acted to some extent as a barrier to corporate acts that were egregiously damaging, although laws were required (and passed, in the last century) to prevent the sale of tainted foods and the employment of workers in unsafe conditions. The growth of powerful international corporations, and their expansion into and control of areas of the economy vital to life and health has raised new issues of corporate responsibility.
At what point does a company and its executives acquire responsibility for the lives of others? This is not an academic question. Bhopal, in India, where chemical plant effluent killed, injured and deformed thousands, is an obvious case. A Bhopal situation in the US would have destroyed the company; civil lawsuits and criminal responsibility for negligent homicide would have drained the company and jailed its leadership. Other situations, however, are not as clear. Here are two real situations where moral guidelines and legal responsibility part company:
-AIDS medication: The pharmaceutical companies that manufacture AIDS medications sell their products in the US at very high prices. AIDS patients in poor nations can't afford the thousands of dollars a month that would be required to keep them alive. Do these pharmaceutical companies have any responsibility in this case? Withholding the drugs dooms thousand of people to an early death. As an ethical matter, should the pharmaceutical companies donate or sell at minimal prices the drugs that are so lucrative here? If this causes a loss to the companies, does their responsibility to shareholders and concern for corporate survival force management to ignore the plight of the sick? A further complication: companies exist in the third world that could manufacture these drugs at a price affordable to third world AIDS patients, but are prevented by patents from doing so. Granting manufacturing licenses to these companies to satisfy their domestic needs would eliminate any production losses that might occur by the patent-holder selling below cost. No lost sales would be involved, since the market to be served by third-world manufacturers can't afford the full-priced drugs anyway, and small licensing revenues would be created that would be a plus to the patent-holder. Does a company and its management have an ethical responsibility to make these drugs available and save lives under these circumstances? Does withholding licensing under these circumstances constitute murder?
-Water supply: Worldwide, there is a trend toward privatization of potable water. Three major international companies control most of this business: Vivendi, Suez and Thames Water. With pressure from the World Bank, African and South American countries have been placing their water supplies and services in private hands. These companies charge each household for supplying potable water. (Leaving aside issues such as poor water quality and arrest of householders for “water theft” for collecting rain runoff, complaints have arisen that good water is supplied only to wealthier areas, while poorer areas are left unserved.) Consider the following situation: the company has responsibility for supplying water to a township. The township of 40,000 people falls in arrears on its payments. Does the company shut off supplies of potable water to the township, requiring 40,000 people to drink unsafe water? This would condemn these people to illness and death from water-borne diseases. Having accepted a water monopoly, does the company have a responsibility to supply water to those who cannot afford its rates? Are deaths from cutting off the water supply murder?
There are many other situations sharing the same life-and-death characteristics: marketing products overseas that are forbidden for reasons of health and safety domestically is common situation.
The above cases are real. In the case of AIDS, the companies have opted not to license in-patent drugs to generic producers; instead, they are providing a limited amount of drugs for a limited period of time at low prices. This is clearly a PR move; deaths will result. In the case of water privatization, the township cutoff example has happened, and hundreds of deaths resulted.
When a company acquires power in a life or death situation, an ethicist might argue that it has also accepted responsibilities beyond the bottom line. If broad agreement can be achieved on this point, than it is possible to create legal structures that buttress the responsibilities acquired. Until this happens, corporate management will be free to get away with murder.
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