Personal and organizational ethics investment in South Africa

¶ … investment in South Africa and the moral rights and justice of that investment. The case study involves two U.S. corporations, Texaco and Standard Oil (now Chevron), who operated an oil refinery in South Africa called the Caltex plant. It involves shareholder decisions on operations in the country due to concerns about the South African government's treatment of their black citizens.

The utilitarian benefits of building the Caltex plant in 1977 included their treatment of black workers as equals with the whites, and their additions to the South African economy. On the other hand, Caltex was supporting the South African's government in their treatment of blacks by doing business with them and in their country, sending part of their profits to the government who continued to oppress blacks in their country. While the government was clearly violating human and moral rights, the company treated its black employees fairly and equally, something they might not have received with another employer. The benefits of building the plant and adding new positions outweighed the violations that took place by the government. That is because Caltex tried to be a responsible employer, and they did not violate rights inside the plant. The text notes, "What Kant means by 'treating humanity as an end' is that everyone should treat each human being as a being whose existence as a free rational person should be promoted" (Velasquez, 2006). The plant did employ human rights inside the plant, but they could not control what went on outside the plant. Shutting down would have sent a message to the government, but it also would have put hundreds of workers out of work, and affected the South African economy. Shutting down might have been the most ethical and moral thing to do, but hundreds of families would have been affected, and it is doubtful that many of them could have found equal employment in that case. As the case study notes, "In management's opinion, if Caltex were to withdraw from South Africa in an attempt to achieve political changes in that country, as the proposal directs, . . . such withdrawal would endanger prospects for the future of all Caltex employees in South Africa regardless of race" (Author, date not available). While this may not be the most moral decision, it does take into account the people who work at the plant and depend on it for their livelihood and the health of their families.

If I were a stockholder in Texaco or Chevron at the time, I believe I would have voted to keep the plant open. Most stockholders hold their shares as an investment to make money, and closing the plant would probably have affected the share value. That is not the most moral or ethical decision, but it is the reality of the situation. Closing the plant would have changed the workers' lives, and not it a positive way, and it would have affected the companies, too. How I ought to vote is entirely different. Those stakeholders who voted to close the plant and send a referendum to the government made the ethically and morally sound choice, even though they were not the majority.

The second option of not selling to the government and military seems like a very workable option, because it keeps the plant open but does have consequences for the government, which clearly needed to change its policies regarding black citizens. That however is a "safe" option for the stakeholders. They send a message to the government, but still keep their profits. Finally, adopting the Tutu principles sends a very strong message to the government, even more than not selling oil to them, and shows that the company respects its black workers and wants them treated fairly in society. However, it gives a deadline of 24 months, and that seems like a threat to the government, which could backfire on the company. Since the shareholders did not approve any of these measures, it is a moot point, but it would have been good for the company to implement one of them to show their commitment to their workers and their principles/

The managers should have recognized that a group of the investors really wanted to send a clear message to South Africa to stop its racist policies, and they should have done more to show they supported the lifting of the sanctions against the blacks. It was not enough to implement policies inside the refinery; they could have done much more to put pressure on the government to end their policies. As it was, when more companies sanctioned the government, they made it more difficult for companies to leave the country, which resulted in more hardships instead of fewer.

The managers should have implemented the second solution immediately, because it would not adversely affect the refinery, and it would still send a message to the government that the companies did not support their policies. It would have been essentially a win/win situation for the company, while it still stood its moral ground. The first solution would have extremely negative consequences on the companies and the employees, so they should not act on closing the plant, but that it was proposed at all shows how serious many people were about the situation and the morals surrounding it. The final solution, adopting Tutu's principles, also should have at least been considered. The principles sent a strong message to the government while attempting to make the situation better and the managers should have done something stronger to show the government they were serious and committed to social change.

All of the solutions had some kind of merit, but they would have affected both oil companies and how they did business. Ultimately, they chose not to implement any of them because of votes, but if they had been truly concerned about the welfare and stability of their workforce, they should have implemented at least one to show their support for reform and acceptance for their black workers. The managers could have fought stronger for the lifting of sanctions on blacks, because government regulations can affect the bottom line of a company. The text notes, "Many economists now advocate retaining the market system and private property while modifying their workings through government regulation, a mixed economy that attempts to remedy the deficiencies of a free market system" (Velasquez, 2006). The people responsible for those decisions could have done much more than they did, which shows that while they did things ethically, it was not their primary concern. A business that does not value ethics, such as Enron, for example, seems to be destined for failure, and a company that ignores this does not seem like a workplace to be valued or recommended.

Yes, the management does have moral and ethical responsibilities if they want to be taken seriously. The bottom line of a company is making money for its stockholders, but that does not mean it has no other responsibilities. Companies have a responsibility to provide safe workplaces, pay their workers a livable salary, and to not negatively impact the environment or their surroundings. They have a responsibility to behave ethically and morally, and to promote those values in society. Companies are not above the law, and they should not be above ethical values, either. They have to behave morally and responsibly because many consumers and other businesses demand that now. However, a company has a moral obligation to society to act ethically and morally, too. It is really in their own best interest, as well.

Caltex could have developed a much better reputation on civil rights if they had taken a bigger stand, and they could have gained worldwide support, especially from others that were fighting to end apartheid in South Africa. That could have earned them more business, especially from black-owned businesses around the world. People knew the South African government was wrong for not ending apartheid sooner and public sentiment was clearly growing against the government. The oil companies could have really made a statement by supporting ending the practices in South Africa. For example, Starbucks is known for their campaign to make their products sustainable and for working with the coffee farmers to make their businesses "greener" and sustainable at the same time. It gives them a good reputation, and many of their patrons go to Starbucks because they know of their involvement in these areas, and they support them. For them, it is not just about profits, but also being an ethical member of the community. If more businesses recognized this, they might develop better reputations, but gain new conscious customers, as well.