Business and the Environment “Clean, Green, and Rich”
MNCs and the EnvironmentThe Chemical Industry • Union Carbide: Bhopal, India, 1984 • Toxic gas leak • 3,000 + 2,000 deaths • 578,000 people affected • Poor safety procedure and maintenance • Poor compensation ($500!) • Poor medical facilitates • Long term damage • No one accountable
MNCs and the EnvironmentThe Greener Chemical Industry • The Responsible Care Program Under Responsible Care ®, the worldwide chemical industry is committed to continual improvement in all aspects of health, safety and environmental performance and to open communication about its activities and achievements. • Started by the Canadian Chemical Industry Association, 1985 • After the Rio Summit (1992) the number of RC member associations grew from 6 to 47 • Components: • Commitment by each company to a set of guiding principles • codes, guidance notes and checklists to help companies to fulfill their commitment (Emergency Response, Research and Development, Manufacturing, Transportation , Distribution, Hazardous Waste Management ) • Indicators against which improvements in performance can be measured. • Open communication on health, safety and environmental matters
The Chemical Industry: Exporting Environmentalism • Level playing field • Gain a competitive advantage • Community and government relations • Pre-empt regulations • Reduce transaction costs • Examples: Latin America, Eastern Europe
MNCs and the EnvironmentSHELL • Shell in Nigeria • Development • Corruption/lack of transparency • Few benefits for the local community (1.5% to 3% to 13%) • Environmental impacts • Human rights violations • Similar record in Louisiana (US) and South Africa
Demand rights, social, economic, and evironmental justice Lead by Ken Saro-Wiwa Shell “persona nongrata” in Ogoniland Ken Saro-Wiwa sentenced to death and excuted Shell sued in NY court by Saro-Wiwa widow and human rights organizations Movement for the Survival of the Ogoni People (MOSOP
MNCs and the EnvironmentShell • Triple Bottom Line reporting • Industry leader in social policy • Industry leader in mitigating environmental impacts • Climate friendly policies and technology • GHG emission 5% below 1990 levels by 2010 • Solar panels • Hydrogen fuels cells • Partnerships with IOs and NGOs
MNCs and the Environment Which is the true face of SHELL or the Chemical Industry?
Why does business adopt environmentally friendly policies and practices?
Becoming and environmental leader • Improve public relations • Respond to public pressure • Preempt regulation • Set the terms of debate/regulations • Improve profits through eco-efficiency • Product and price differentiation • Claim new niche in the market • Visionary leadership and management
Business Council for Sustainable Development • Ecoefficiency and waste minimization • Corporate responsibility • Technological innovation • Information sharing • Partners in SD governance: Why do companies become members? -135 companies, $4,000bn turnover, 11mn employees, affect 2bn people daily.