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There are two major categories of ethical theories including Consequentialist theory and Non-Consequentialist theory. According to the consequentialist theory, it becomes important to evaluate the consequences of an action in order to determine whether the action is right or wrong. Therefore, according to this theory an action can be perceived as a right action if it can generate good results for the maximum number of people. Whereas, according to the Non-Consequentialist theory it is important to identify and evaluate the intrinsic properties of that action in order to determine whether the action is right or wrong. The Non-Consequentialist unlike the Consequentialist theory does not gives importance to the consequences of the action.
While analyzing the case through the perspective of Consequentialist theory, it can be understood that Barnett government that gave approval for demolishing ancient rocks at Juukan Gorge should have considered the consequences of the action before giving the approval to Rio Tinto organization. Also, it could be evaluated from the case that the landowners did not proper action as they could have stood against the work as Section 18 allows them to prohibit any kind of work that neglect the interests of the Aboriginal people.
According to the Consequentialist theory, the action of demolishing the ancient rocks at Juukan Gorge is wrong because it had significant adverse consequences associated to it. The rocks were an important part of history of Aboriginal people and by destroying it the organization has stolen a part of history education from the future generation. Also, many of the ancestors of Aboriginal people still lived in the region which also led to the habitat loss. Therefore, it can be clearly evaluated that the organization of Rio Tinto and the government did not evaluate the consequences of the action before actually applying it.
While analyzing the case through the perspective of Non- Consequentialist theory, it can be understood that the organization Rio Tinto took the official steps to get the approval to start the work. They did not do anything against the will of the government; they took the approval and then started the work. So, it can be easily evaluated that they took the necessary legal actions in order to start the work. However, it can be evaluated that the decision is not ethically correct because the organization did not consider the aspect of cultural heritage while taking the decision. The organization should have considered that the action may negatively impact the sentiments of the Aboriginals and the organization may have to face resentment from the public in future which may also lead to loss of reputation of the organization. Therefore, it can be said after evaluated all the intrinsic properties of the action that it was neither a well informed decision and nor an ethically correct action.
According to the perspective of Corporate Governance, it is the responsibility of the Board of directors of the organization to examine the business performance and also to ensure that the all the employees of the organization are complying by the rules and regulations. The main role of the board of the directors is to maintain balance between the job performance and compliance. The boards of directors are expected to appoint an efficient CEO for the organization that will look after the overall functioning of the organization. The Board of Directors are also expected to identify the possible risks that may impact the performance of the organization and draft risk mitigation strategies in order to ensure effective internal functioning of the organization.
The shareholders are the individuals that actually own shares of the organization. They own stock in the firm and have direct control over the organization. The Board of Directors are expected to ensure direct and regular communication with the shareholders of the organization. The Board of Directors of the organization is directly accountable for their actions to the shareholders. Also, the shareholders can also propose nominees for the role of the board of directors in the organization.
In order to improve the culture of the organization, the Board of directors can arrange regular meetings with the executives and the CEO along with the shareholders in order to ensure that all the important decisions taken are only implemented after taking the approval of all the important members of the organization. In this way, the CEO and the other employees of the organization would develop loyalty and would think that they are important for the management of the organization. In order to ensure that nothing like this happens again, it is important that board of directors conduct risk oversight before taking a decision. It is very important for the board of directors along with the shareholders to develop procedures and policies for evaluating the consequences of an action before implementing it. Regular meetings and communication with important members can help in improving the culture of the organization and development of policies and procedures will help in ensuring that nothing like this happens again in the organization.
If the WTO is committed to the Paris agreement, it can pressurize the MNCs and countries to reduce the global warming with the mode of drafting regulations for the organizations. With the method of regulations, the government tries to control the extent of pollution generated in the manufacturing processes undertaken by the organization. The government applies certain limits to the pollutants generated by the organization. If an organization is able to produce pollutants less than the set limit then the government provides incentives to the organization and if the organization generates pollutants more than the set limit then the government penalizes the organization. In this manner, the government motivates the organization to control global warming.
Another method that is used by the government to reduce the global warming emissions done by the organizations is by carbon price to the amount of greenhouse gases emitted. Under this mechanism, the organization has to pay carbon tax if they generate carbon pollution more than the acceptable range. In this manner, the government plays it role for encouraging the nations to reduce pollution in the atmosphere.
The government can also adopt a combined approach of carbon tax, incentives, penalties and regulations in order to effectively control the greenhouse gas emissions in order to ensure controlled global warming.
The international organizations like WHO and United States maintains the power to focus attention to the Paris agreement and ensure that the outcomes as stated in the agreement are achieved.
Rio Tinto is a multi national organization. A multinational organization has been operating in different parts of the world and therefore they bring a lot of benefits to the host country. The benefits are in the form of upgraded technology, expertise and skills. Multinational organizations are surely technologically ahead of the native organizations. The other benefits includes up gradation in the capital quality and knowledge with the human resource of the host country. The existence of MNC helps in up gradation of the skills and knowledge of the human resource because when they work with these MNCs they get a chance to work with the employees who have already gained a wide experience. There is a knowledge transfer between the human resource of host country and the experienced employees of the MNC.
However, there are certain disadvantages as well. These MNCs have better skills and are technologically upgraded but they obtain greater economic power than the host country. It has been said that the MNCs can even misuse their power for their own benefit.
While evaluating the case keeping in consideration the advantages and disadvantages of MNC it can be easily interpreted that it becomes important for the government to set out standards of governmental and environmental sustainability in the form of social contract that needs to be adhered by the multinational companies in order to avoid misuse of power by the MNCs in host country.
The mining activity can further contribute to the carbon emissions in the atmosphere which will actually hinder the achievement of the targets of Paris agreement. Therefore, it can be said that the decision of giving mining permission to Rio Tinto was not an ethical action. Every nation including Western Australia guides the organization regarding the emission limit that cannot be exceeded and if in case it is exceeded, the penalties are to be born by the organization. The government approving the mining proposal of Rio Tinto gives an indication that the decision was taken under the powerful influence of the MNC. Otherwise, the decision would not have been granted as it can further add to the global warming concern. Therefore, it can further be evaluated that the decision was a misuse of power by MNC and it was not ethical.
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