Corporate Irresponsibility of Multinational Corporations - Essay Example

Corporate Irresponsibility of Multinational Corporations Introduction Multinational corporations (MNCs) are expected to conduct their core businesses in ways that they give back to the society that they operate. There many stakeholders who the activities of any business have impact on. Multinational corporations therefore are expected to be responsible for the impact that their activities cause to the environment. Being socially responsible is not the core business of the multinational corporations, but it is an ethical requirement that they integrate environmental and social concerns in their interactions with the different stakeholders and in carrying out their business operations. The areas of corporate social responsibility are such as management of the environment, maintaining labour standards and good working conditions, engagement of stakeholders, observance of human rights and practicing good governance. A multinational corporation will show corporate irresponsibility on failure to take the social responsibility measures (Adeyeye, 2012). Corporate irresponsibility incident of multinational corporations According to McIntyre et al (2009) one of the corporate irresponsibility incidents of multinational corporations is the violation of human rights by these corporations, and another one is environmental mismanagement. For instance the MCNs in oil extracting countries have been observed over the years to have violated the rights of the oil bearing communities. The violation usually arises from the conflicts between the two groups concerning land rights and compensation for the ecological damages that are caused by these corporations during oil extraction. The extraction mainly causes negative effects on the environment and the MNCs show corporate irresponsibility by not finding the appropriate measures of managing the effects caused. The multinational corporations further fail to meet the expectations of these communities concerning compensation as well as environmental management. The result of this corporate irresponsibility is frustration of the communities arising from unfulfilled expectations as well as violence as form of response. The operations of these multinational corporations have been attributed to the cases of underdevelopment in the countries (Sornarajah, 2010). The efforts of free trade markets to better the global economy and making sure that multinationals are accountable for their effects on the environments and stakeholders, have failed since the multinational corporations are making more efforts to cover their abuses on the environment as well as the human rights instead of preventing them. Among the multinational corporations that have exhibited these instances isAlpha Natural Resources which is a mining company that practices mountaintop removal, a practice that exposes coal and leaving behind coal debris and toxic wastes which later causes pollution to rivers and groundwater. The practices of the company also cause air pollution and health effects to the community. The right of good health to the community is therefore violated. Another multinational corporation that shows violation of human rights and environmental mismanagement is Ghirardelli Chocolate Company. The company produces chocolates and its production is dependent on cocoa farms and their production has been connected to violation of human rights in that they use human trafficking, forced child labour and slavery for their production. The company fails to observe the work rights of the labour force and it does not provide information of its cocoa suppliers. The company’s production is not fair trade certified and therefore there is uncertainty concerning its observance of the environmental standards. The incidents of violation of human rights and environmental mismanagement are forms of corporate irresponsibility by MNCs since they are against the requirements for corporate social responsibility. They affect the community which offers stakeholders to the multinational corporations such as the employees and suppliers of inputs and raw material. These are among the groups that affected by the operations of any business entity.They violate the employees by failing to offer good working conditions, considerable wages and going against the human rights by enforcing forced labour to the minors. They also violate the rights of the community by failing to meet the demands of the suppliers. Suppliers are stakeholders of businesses and require a fair compensation for the inputs that they offer to the companies. The companies therefore act irresponsibly by not providing this fair compensation. The multinationals also show corporate irresponsibility by not taking care of the environment in which they operate. The environment is important to any business since it gives them a place to conduct their business practices (Global exchange, 2014). How the multinational corporations could have prevented the incidents from occurring The multinationals operating in the oil extraction countries could have prevented the violation of human rights and environmental mismanagement by ensuring that there are no conflicts between them and the communities bearing the oil. The multinationals could have prevented these conflicts by making appropriate contracts with these communities concerning the right of the lands considering that these lands are the communities’ property. They could have made contracts that give them the rights to extract the oil and at the same time treating the communities fairly. The multinationals could have as well ensured that their activities are friendly to the environment thus preventing hazardous effects. Alpha natural resources on the other hand could have prevented violation of right to good health to the community and from environmental pollution by finding ways in which their waste products could have been made less toxic before their emission so as to ensure that they do not result to pollution of water and air. Ghirardelli Chocolate Company could as well have prevented their violation of human rights that is caused by their engagement of minors into forced labour, failing to offer the right remuneration for the workers, failure to ensure a good working environment, and unfair compensation to their cocoa suppliers. The company could have prevented this by ensuring that it employs individuals of the right age, providing a good working environment and ensuring that it offer the right and fair remuneration and ensuring that they offer the right compensation to the suppliers of cocoa, that they obtain it legally and that they keep the right documentation in regard to the supplies (Adeyeye, 2012). What the multinationals should do to prevent further occurrence of the incidents The multinationals discussed are all observed to have violated the human rights of the community and to have failed to manage the environment thereby causing pollution in different ways. Therefore, the oil extracting multinationals can prevent the further occurrence of this irresponsibility by ensuring that they enter into clear contracts with the communities that own the oil farms before the start of their business. These contracts should be aimed at treating the communities fairly as the corporations benefit from the right to extract oil. They should also come up with programmes that are aimed at conserving the environment and preventing pollution from their activities. Alpha Natural Resources Company can also change the way it carries out business so as to minimize the pollution caused by their waste products in the future. It can do this by ensuring that it makes the wastes products to be less toxic before they are finally emitted. This will reduce the chances of water pollution as well as air pollution and will ensure that it does not violate the human right to good health. Ghirardelli Chocolate Company in addition can change the way it carries out business to ensure that is shows corporate responsibility in the future. The company should focus on observing human rights to ensure that it avoids vices such as child labour and ensuring that it employs people of the right age and that it compensates them appropriately. It should engage in practices that ensure the observance of employees’ welfare. The company should also ensure that it acquires fair trade certification by ensuring that it maintains fair deals with the suppliers of its inputs and ensuring that it offers them the right compensation and that it holds the right documentation in their regard (Global exchange, 2014). References Adeyeye, A. (2012). Corporate social responsibility of multinational corporations in developing countries: Perspectives on anti-corruption. Cambridge: Cambridge University Press. Sornarajah, M. (2010). The international law on foreign investment. Cambridge: Cambridge University Press. McIntyre, J. R., Ivanaj, S., & Ivanaj, V. (2009). Multinational enterprises and the challenge of sustainable development. Cheltenham, UK: Edward Elgar. Global exchange. (2014). Top ten corporate criminal list. Retrieved on 18th March from http://www.globalexchange.org/corporateHRviolators Read More