SOUTH AFRICA'S DE BEERS: THE MOST UNETHICAL
CORPORATION IN THE WORLD
St. Antoninus Institute
Social conservatives may be criticized for being more concerned by the actions of
corporations which transgress doctrinal Christian no-nos, like supporting abortion
(the Saint Antoninus Pro-Life Shopping Guide, as well as the Pro-Life Mutual fund
project are casting a glaring light on those) or homosexuality (see our past feature
article on Levi-Strauss, the blue-jeans company, which has positioned itself as the
international champion of the homosexual cult). What about old-fashioned business
immorality? Are we, social conservatives but also economic conservatives, blind to
their transgressions?
Not at all. But we do have to make the difference between absolute, collectivized
and/or institutionalized evil (as was the case for communism) which need be fought
with priority and/or collectively and relative, individual and random evil which must
be considered on a case by case basis.
However, we present here the example of one company which really defies all
standards of business conduct on a grand scale. Its case was interestingly presented
by the PBS TV program "Front Line" with contributions made by Edward Epstein,
author of "The Rise and Fall of Diamonds" and Duncan Innes, author of "Anglo-
American and the Rise of Modern South Africa."
DeBeers is a corporation which was set-up by Cecil Rhodes, the British explorer and
adventurer who gave his name to the African country of Rhodesia (now Zimbabwe)
and to Rhodes scholarships (the darker side of these scholarships will be made
evident with the presentation of the elitist bent of Rhodes and DeBeers).
The purpose of DeBeers was the exploitation of diamond mines in South Africa. The
challenge was that, according to Epstein, while diamonds were a rare resources only
a couple of centuries ago, the discovery of extremely rich mines in South Africa and
other countries of Africa was threatening to drive the prices down. The establishment
of DeBeers consisted therefore, in a parallel effort, of setting up a cartel with other
producers in order to control international prices of diamonds.
A cartel is a loosely, but effective, agreement between producers of a resource,
product or service to agree on minimum levels of prices offered for these resources,
products and services to the general public. A cartel is usually also structured in such
a fashion that its members follow the marching orders given by the cartel leader.
The whole concept of a cartel is exactly what was the reason for the passing into US
law the Sherman Act. Cartels are immoral because they overcharge the buying public
by artificially propping up prices. They victimize the general buying public. They are
also against the freedom of enterprise for they force possible competitors to obey the
cartel directives, often under financial or even physical threats; they are victimizing
their co-producers or suppliers.
Naturally the issues of the quality of products and truth in advertising are all rolled
together into the issue of the victimization of the buying public. Products of a given
quality are much too expensive for what they could be if the prices were allowed to
be set by the market forces. Any advertising claims are relying on the concept that
the products are attractive at their offered prices, and attractive for different
psychological reasons for the buyers. It the prices are not morally set, the whole
advertising exercise is an effort in deceit.
The DeBeers diamonds are extracted from the South African mines and marketed in
London, at the address of the Diamond Trading company, a DeBeers subsidiary.
There buyers, including retail and wholesale buyers from the New York city
diamond district, come to look what DeBeers has to offer them to keep them in
business. The DeBeers employee takes the diamond distributor in a small room and
present him with a bag of diamonds. The retailer cannot buy diamonds one by one.
He has to take the whole bag or leave it. Further the retailer makes an offer for the
bag and the negotiation proceeds on this base. Retailers are very afraid of crossing
the DeBeers operation because if they refuse the bag, or make too little an offer or
behave like poor citizens in the diamond trade DeBeers will either not offer them any
new bags of diamonds to purchase or will offer them bags with only poor grade
diamonds which are difficult to distribute.
The DeBeers operation is therefore unethical not only towards the end buyers, the
public which buys diamonds but also to all distributors and retailers of diamonds in
the whole world.
US authorities are keenly interested in the whereabouts of the DeBeers operatives
and have subpoenas against any DeBeers executives for transgressing at least the
spirit of the Sherman Act and its anti-cartel intent. The fact that DeBeers can freely
advertise and distribute in the US market, its largest market in the world is witness
that something else is going on.
To begin with British authorities are very supportive of DeBeers and are not happy
with the US justice system's statutory mandate to pursue such a bad corporate citizen
as DeBeers. DeBeers incorporates a special mentality within establishment British
circles which has not disappeared with the colonial era. The behind the door control
of the world, instituted by Rhodes is very much in the liking of great interests in
England. These interests are supporting the Rhodes scholarship to sanction the
excellence of US students with studies at Oxford, but it also helps selection
individuals who will be groomed to contribute to their elitist efforts.
The day this article is being written, an article in the paper announces that the US
justice department convicted General Electric Co and DeBeers for conspiracy to raise
prices in the $500 millions-a-year industrial diamond industry. "The indictment
charges GE and DeBeers, which account for 80 percent of the industrial diamond
market, with conspiring to fix and raise prices worldwide." The industrial diamond
industry, naturally, is a very small part of DeBeers diamond operation.
DeBeers, which has been managed by Harry Oppenheimer for years out of its offices
in Johannesburg is therefore guilty of unethical conduct towards its customers, co-
producers/suppliers, towards foreign governments. But that is not all.
DeBeers is also guilty of about the worse type of conduct towards its employees,
namely poor blacks of South Africa. Duncan Innes, the author mentioned above,
explains how Rhodes, with others, had realized that the mining operations required a
lot of cheap labor. They manufactured that labor. They contributed to the
establishment of numerous taxes, including a poll tax, so that the larger black
population would have to get some cash to pay those taxes. Most of the blacks who
lived in their villages did not belong to a cash economy had to find a job to get this
cash. They walked to the DeBeers mines, with the purpose of hopefully raise that
money in a short period of time and return to their villages. These thousands of
"migrant workers" were victimized by the living conditions and the DeBeers
company stores for decades, always suspect of stealing diamonds and fed with some
bread and cold tea for hours of work, according to Innes.
DeBeers officially and through the mouth of its leader Oppenheimer, always took the
position that it was opposed to Apartheid. However, Innes is surprised for DeBeers
clearly took advantage of all of the mechanisms of Apartheid to provide the company
with cheap and docile labor for its mines. Also, the political troubles in South Africa,
charges Innes, re-enforced DeBeers business position. When countless of smaller
companies either went into bankruptcy because of the social unrest within their labor
forces, or more simply left camp as foreign companies did under the pressure of
liberal/socialist groups abroad, DeBeers bought them out. By so doing DeBeers
bought cheaply good businesses but also it supported the Apartheid regime,
according again to Innes, which could have been made to give up should the
economic consequences of these numerous companies going into bankruptcy be felt
to its full extent. DeBeers propped up Apartheid and ended up with owning a
multitude of corporations to the tune of 4O% of all corporations listed on the
Johannesburg stock exchange.
DeBeers is therefore also guilty of corrupting, or at least of aiding and abetting the
evil operations of a whole political system, South Africa's Apartheid system. Out of
this system DeBeers has drawn two advantages: one with its labor force which had to
comply to its harsh managerial policies and two by unwarranted enrichment when it
took over corporations which were driven out of business through no managerial
errors of their own.
DeBeers is guilty of more than all that. It is an integral part of the old-boy network
instituted by the British and encompassing different US operations and interests for
the purpose of controlling international governments and population for the good and
in the interest of a number of corporations, especially banks. The American version
of this international network is called the Council of Foreign Relations (CFR).
Anyone drawing attention to the dark side of the objectives of this outfit is branded
and derided as giving credence to the "conspiracy theory".
CFR is essentially a very elitist club of people in different professional occupations.
To be invited to become member of CFR is indeed an honor. It may be true that most
of these members are not aware of the purpose of the organization which is to ensure
that its members, by following a party line, protect the interests of their financial
sponsors. Most of the people thus honored genuinely have excelled in their
profession but they can be said to be also strongly motivated by personal ambition
because they know that belonging to CFR is a very effective ladder for social and
professional climbing.
DeBeers supports CFR and its other international version as they are means to
protect the integrity of its cartel. The other major members of CFR, the banks,
support the group because it allows them to introduce their people in all different
types of governments and political parties so that these government will never
consider commandeering or nationalizing the assets of the banks (bankers are
paranoia about collaterals but how do you enforce a collateral against a sovereign
government?).
Through CFR, DeBeers undermines the political process of several countries,
including the US.
What is worse, and we are now closing the loop, through CFR and its many efforts,
not only members of the political profession are recruited but also members of
academia, the press and the very powerful foundations (because they all have an
impact on politics). These bodies have developed different social agendas on which
they agree (which explains the relatively very little difference in many countries of
the world between the politics of the conservative or leftist party when in power). On
their agenda are most of the social developments which are against the teachings of
the Church, including the worldwide promotion of abortion, for example through the
personal efforts of Chase Manhattan Bank's David Rockefeller who also was bold
enough to publicize openly his anti-Catholic sympathies.
DeBeers has also undermined the government of other diamond rich African nations
and helped enrich their presidents to the tune of several billions of dollars while their
population had to beg money from the UN and the World Bank to survive (the
relationship with Soviet Russia is also quite interesting).
The highly unethical corporate conduct of DeBeers requires restitution to the whole
world. However, let us limit ourselves first to the interest of the most needy: the
blacks of South Africa who for so long labored under its yoke. They should be made
beneficiary of DeBeers' wealth. But what is more likely is that Mandela's Communist
African National Congress (ANC) will shamefully protect DeBeers against the
population in exchange for massive financing for its operations. The broader
population of South Africa, black and white, will again suffer twice because of
DeBeers, the most unethical corporation in the world.
Overview of Nestlé’s Unethical Business Practices
Nestlé is accused by experts of unethical business practices such as:
Promoting infant formula with misleading and harmful strategies that violate the
International Code of Marketing of Breastmilk Substitutes and put babies at risk (see
Baby Milk Action’s Briefing on Nestle Updated July 2010 and the Boycott Nestle – and
other action to protect infant health blog);
Using suppliers that violate human rights (e.g purchasing milk from Mugabe, buying
cocoa from suppliers that use child slaves) and destroy the environment (e.g. palm oil
from rainforest);
Controlling and abusing of water sources in its bottled water operations (e.g. in United
States and in Brazil);
Promoting unhealthy food, especially for young children;
Trade union busting activities and denying the rights of workers to collectively bargain;
Nike Unethical Business Practices Case
Most people could easily define Nike and are familiar with the products offered, like the
customized options available in the Nike store online, Nike Sportswear, Nike Women, Nike
Basketball, and Nike Football. This could be due to the successful branding and marketing
strategies that Nike implement (refer to Nike Sportswear Business : What Does the Word Nike
Mean, Business Identity : Nike Swoosh Logo and Sportswear Business : Motivational Quotes by
Nike)
However, when it comes to issues related to unethical business practices, it always refers to
concerns such as child labor laws, wages, sweatshops and outsourcing’s effect on sales.
Nike sweatshop labor case had stirred up a large amount of controversy over ethical business
practices, and even though Nike has attempted to recover from the bad press it received about the
sweatshops, it struggles to defeat the negative feelings from people across the United States.
A summary of the Nike unethical business practices case, the legal, cultural and ethical
challenges, an understanding of the roles the host governments play, and the strategic and
operational challenges faced are important to gain a thorough understanding of the issues and
case.
Nike Unethical Business Practices and CSR
When we want to know how should companies best disclose social responsibility information to
the public, it is very important to know these 2 words: Corporate Citizens and Corporate social
responsibility (CSR).
1.Corporate Citizens
Corporate citizens are companies acting in behalf of a social interest, which may or may not
affect revenues. These socially beneficial actions raise the ethical standard for such companies
because of purportedly altruistic intentions, which is entirely different from the sole profit-
generating purpose of a corporation. The ethical expectation of corporate citizenz are thus more
demanding than those for businesses without social interest, especially in the way corporate
citizens communicate their philanthropic practices.
2. Corporate social responsibility (CSR)
Also known as corporate responsibility, corporate citizenship, responsible business, sustainable
responsible business (SRB), or corporate social performance, CSR is a form of corporate self-
regulation integrated into a business model. Ideally, CSR policy would function as a built-in,
self-regulating mechanism whereby business would monitor and ensure its adherence to law,
ethical standards, and international norms. Business would embrace responsibility for the impact
of their activities on the environment, consumers, employees, communities, stakeholders and all
other members of the public sphere. Furthermore, business would proactively promote the public
interest by encouraging community growth and development, and voluntarily eliminating
practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate
inclusion of public interest into corporate decision-making, and the honoring of a triple bottom
line: People, Planet, Profit. ~Wikipedia
Nike, as a global company, is getting more expectation from the people as a corporate citizen,
and not just a profit-making company. When such companies are engaging in public dialogue, it
is important to know how to ethically, legally, and effectively disclose information while
maintaining a positive image.
While there may be differences when giving a definition for business ethics, when it comes to
ethical issues associated with CSR disclosure and traditional advertising, companies have an
obligation to stakeholders to initiate and engage in genuine dialogue regarding corporate social
responsibility. Increased CSR disclosure in itself is a form of socially responsible behavior, and
that by offering more information to the public, companies better meet their responsibilities to
stakeholders. This must be done consistently with CSR promises and not for the sole purpose of
improving revenue in CSR reporting.
In summary, the fact that the case of Nike unethical business practices has brought these ethical
and legal issues to light, provides us a definitive example to reference when assessing the risks
involved with corporate communication.
Ethical questions surrounding the BP Oil Spill
Published June 29, 2010 | By Stephanie Malik
Largest oil spill in U.S. history continues to devastate
Gulf wildlife while the press and independent scientists are continually denied access to
spill site and surrounding beaches.
by Stephanie Malik
On April 20 a wellhead on the Deepwater Horizon oil drilling
platform blew out in the Gulf of Mexico approximately 40 miles southeast of the
Louisiana coastline. What BP had initially claimed would be a spill with
“minimal impact”, 69 days later now constitutes the largest offshore oil spill
in U.S. history. Today the well is conservatively estimated to be leaking at a
rate of 1,900,000–3,000,000 litres per day—though several expert estimates
based on footage of the spill suggest the actual rate is more likely to be 3 to
5 times higher than this. The unusually wide disparity in expert estimates is
due to the fact that BP has continually denied the requests of a number of independent
scientists to set up instruments on the ocean floorthat could measure the rate
of the leak more accurately. “The answer is ‘no’ to that,” a BP spokesman, Tom
Mueller, said earlier this month. “We’re not going to take any extra efforts
now to calculate flow there at this point. It’s not relevant to the response
effort, and it might even detract from the response effort.”
Mueller’s remarks continue to be a source of serious
controversy: just how is it that measuring the rate at which oil is gushing
from the well would serve as a hindrance to the response effort? Even more
baffling is how one could possibly construe the measurement as irrelevant. If
we don’t know how big the mess is, how exactly are we to adequately prepare for
cleaning it up?
One would think the U.S. government would want to ensure
that the press and scientists had access to the spill site in order to provide
public visibility of the effects of the spill and a source of reliable
empirical information about the rate of leakage etc., but unfortunately just
the opposite has been the standard. Earlier this month the New York Times
reportedan entire survey of incidents of the press being denied access to the
site and surrounding areas earlier this month, including one reporter even
being threatened with arrest by the U.S. Coastguard for attempting to gain
access to the site.
The Obama administration has failed to acknowledge the
continual denial of press access publicly. Following President Obama’s first
address to the nation concerning the oil spill (which was roughly two months
after the spill began), the White House Press Secretary, Robert Gibbs, fielded
questions about the spill and the government’s response, and when Gibbs was
questioned about the issue of media access only offered vague comments about
President Obama’s commitment to transparency in government and how the press
are only denied access to “safety zones”—though the NYT article cited above
suggests this is patently false.
The U.S. Government could of course have legitimate reasons
for restricting press access, but one would hope that a government that claims
to value transparency would also be transparent about their reasons for
restricting this access. This raises important ethical questions about what
circumstances justify a government or private company in restricting what
information is made available to the public. How much access should the press
have to the spill site? Is BP justified in restricting press access in order to
preserve its image? Is BP justified in restricting access for independent
scientists and engineers? At what point is the government obligated to
intervene in order to ensure the public is getting the information it is
entitled to? In fact, what information exactly is the public entitled to?
Some
of the other major ethical questions surrounding the spill involve moral and legal obligations
we might have to wildlife and the environment.
Conspicuously absent from Obama’s address was genuine
acknowledgment of the sheer magnitude of the damage the spill will have for
years to come on the wildlife in the Gulf and the ecosystem generally. Some of
the immediate effects of a spill are obvious – there is no shortage of
gut-wrenching images of wildlife doused in oil and seabirds suffocating while
frantically and frivolously preening themselves. But some types of ecological
damage are hard to measure and can take years to document. The miles long
underwater plumes of oil will likely poison and suffocate life across the food
chain, with damage that according to scientists could endure for a decade or
more. Many of the creatures that die will sink to the bottom, making mortality
estimates difficult. Damage to the reproduction rate of sea turtles may take
years to play out.
Unique to the Deepwater Horizon spill is not only how deep
it is, but also the huge quantity of chemical dispersants sprayed on the
surface and at the leak on the seafloor. The problem with dispersants is
two-fold in that oil is not only directly toxic to many of the creatures in the
Gulf like pelicans, sea turtles, fish, and dolphins, but also microbes in the
water that eat the oil suck oxygen out of the water at a massive rate, with
levels of oxygen depletion that could be lethal to many other creatures in the
water. Moreover the dispersants that are used to fight the oil are also
consumed by the microbes—speeding up the rate of oxygen depletion in the Gulf
even further. What is especially worrying is that on top of this dangerously
low levels of oxygen are already a concern as, according the U.S. Fish and
Wildlife Service, huge numbers of fish, dolphins, and even sharks, are already
crowding into exceptionally shallow waters near the shores of Alabama and
Florida in order to escape the oil. There's also little scientific
understanding of how the dispersants might affect the deep-water ecosystem.
Legal
protection of wildlife in the Gulf is thin. There are no laws that exist simply
to protect animal interests. U.S. law protects animals as property. That means
laws designed to protect animals exist only to protect the interests of their
owners or the public “Most of the
wild animals affected by the BP spill do not have any legal protections at all,
and there is no penalty that can be imposed for suffocating them with oil,
destroying their habitats and otherwise harming them,” said Justin Goodman, a
representative of PETA.
"The
Endangered Species Act and the Marine Mammal Protection Act have protections in
place for the dolphins, whales and sea turtles that live in the Gulf. But the
Minerals Management Service has approved oil exploration without the permits
required by the two acts.
The Obama administration is the target of lawsuits
over this."
Environmental
disasters of this magnitude certainly raise the question whether we ought to
have stricter laws for the protection of the environment not only for the sake of wildlife and the
ecological system, but also for the people whose livelihood depends on the health of the Gulf.
Another question to raise here is whether some wild animals
ought to have more robust legal protections of their interests—legal
protections motivated apart from human interest in the enjoyment of wild animals as “property”.
So
far the death toll with respect to wildlife does not have shockingly high
numbers, As of June 25, there had been 1,539 dead animals found in the spill zone
including 1074 dead birds, 417 sea turtles, and 48 dolphins and other
mammals—but these numbers likely do not even come close to reflecting the
actual number of deaths.
As
NWF senior scientist Dr. Doug Inkley explains, these numbers tell only part of
the story as the effect of the oil on marine life remains hidden beneath the massive
plumes of oil that are hundreds of feet deep, making it impossible to capture
the full scope of the spill’s impact. “We know we are only seeing the tip of the iceberg with
those that have been washed up onshore and tested.”
Of
course the timing also couldn’t have been much worse as now is the time of year
when most nesting occurs: "Right now is nesting season for brown pelicans,
roseate spoonbills and a host of other birds," said Inkley. "Knowing that it only takes a drop or
two of oil to
kill the developing chick in an egg, I could not help but feel a
great sense of loss…It is going to take years, maybe decades
for the fish and wildlife in this region to recover."
"Words
like 'tragedy' and 'disaster' do not do justice to what is happening”, he
added.
Clearly
it couldn’t be more urgent that we clean this up as soon as possible, but as
the lateness of Obama’s address might suggest, the response has been slow….
Very slow. According to the President of the Plaquemines Parish in Louisiana,
Billy Nungesser, the government’s actual response to this catastrophe has been
“embarrassing”. In an interview
earlier this month President Nungesser spoke about how the government has no master
plan for coping with this disaster and that federal officials, including
Admiral Thad Allen, consistently refuse to accept clean up plans developed by local
and state governments, despite their experience, and moreover lack any
alternative plan. He also expressed frustration about the fact that the
government seems more concerned with emphasizing the fact that this is BP’s
fault than with actually assisting in the clean up.
“What
you’ve seen in pictures in minimal compared to what’s ahead. It’s just starting
to get into the breeding grounds and you will see much more death and
devastation amongst the wildlife in south Louisiana in the weeks to come and
today we’re doing absolutely nothing but redeploying the same boom and doing
some minimal skimming. There is no plan, there is no master plan, there’s
nobody taking charge. The President of the United States has got to step up to
the plate. We’re begging him… We’ve given him several plans that will work.
Either do our plan or come up with one better, but quit threatening back and
forth between BP and the coast guard. It’s like a bunch of kids pointing the
finger at each other. Step up to the plate. We need leadership now, not a blame
game. ”
When
asked if he believed the U.S. Government had been criminal, Pres Nungesser
responded, “Well, absolutely.”
Has
the Obama administration lived up to its moral obligations with respect to the
spill? More generally, at what point might other countries have a right to
intervene when it comes to the handling of environmental disasters and
environmental safety regulations? Certainly climate change issues of
international reach, like the regulation of fossil fuel emissions, are also
relevant to these sorts of questions
