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Ethics

How does the issue of adequacy of regulatory compliance intersect a multi or transnational corporation with global operations?

An example of a case in which a corporate entity was responsible for an environmental disaster, despite adhering to various regulations on state, local and federal levels, is that of the so-called Seveso disaster, which occurred in 1976 near the town of Seveso in Northern Italy. As a result of the disaster, the residents of Seveso were exposed to 2, 3, 7, 8-tetrachlorodibenzo-pidioxin at the highest levels in human history.

The accident itself was caused by a decision within the corporate entity ICMESA and its parent Givaudan to engender the required chemical reactions using improvised means related to exhaust steam. The company followed Italian law, for example, shutting down the plant over the weekend. However, as a result of shutting down the plant, the process was interrupted, thus releasing 2, 3, 7, 8-tetrachlorodibenzo-pidioxin into the immediate surroundings, resulting in various catastrophic results, such as the death of 3,300 animals, the deliberate slaughter of 80,000 animals, 447 human beings suffering from various side effects, such as lesions and many pregnant women choosing abortions for their unborn fetuses.

What makes this case compelling from an ethical perspective is that the attempt to reach the desired chemical reactions resulted in an ultimately dangerous ad hoc decision, however the latter’s success was complicated by the very regulation laws itself that required plant shutdown over the weekend. This confluence of two separate causes for the event led to some confusion in Italian court of law, as the initial sentencing of three of five employees was overturned by a court of appeal. In this case, the ethical question of responsibility thus became ambiguous.

However, it would seem that regulatory compliance cannot be deemed the cause of the accident. For the solution sought out by ICMESA did not consider the effects the regulations would have on this same solution. Whereas it was the necessity to shut the plant down that caused the ad hoc solution to fail, on the other hand, the ad hoc solution should only have been proposed within the framework of the legal regulations. Accordingly, legal compliance to regulations must be central to any multi-national or transnational company’s strategies, in so far as this is the only way to maintain both a clean slate in the light of the law and also uphold general ethical responsibilities. Business operations cannot operate in ignorance of the law in not only how they function on a day-to-day basis but also in regards to the sudden decisions that are required in the business setting.

 

 

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