W2/W1: Ethics and Globalisation

1. Business Ethics and CSR in a Globalised World

Learning Outcomes

By the end of this workshop, you should be able to:

  1. Understand ethical dilemmas in global business practices (e.g., outsourcing).

  2. Analyse risks linked to palm oil production and its global impact.

2. Module Overview & Assessment Structure

The module consists of two main assessments:

  1. Group Presentation (20 minutes) – Stakeholder & CSR Analysis of a company (excluding Primark).

  2. Portfolio (Poster + 1,200-word narrative + Sulitest task) – Examining ethical challenges of AI & technology.

✔ Key skills required: Critical analysis, research, ethical evaluation, sustainability assessment.

3. Ethical Dilemmas in Industrial Relocation

Case Study: Electrocorp – Should the Company Relocate?

You are the CEO of Electrocorp, an electronics manufacturer, facing rising costs in the US. You must decide whether to:

  1. Relocate to Mexico, the Philippines, or South Africa.

  2. Keep operations in the United States.

✔ Considerations for Decision-Making:

Factor

Ethical Considerations

Labour Costs

Lower wages in Mexico & Philippines may lead to exploitation.

Worker Rights

South Africa has stronger labour protections but higher costs.

Child Labour

Some countries lack strict child labour laws.

Environmental Impact

Pollution laws may be less strict in developing nations.

Corporate Image

Ethical decisions affect brand reputation & customer loyalty.

🔹 Example: Nike was criticised for sweatshop labour in outsourced factories.

4. The Ethics of Palm Oil Production

What is Palm Oil?

  • Extracted from the oil palm tree (Elaeis guineensis).

  • 35% of global vegetable oil supply from only 10% of land used for oil crops.

  • Key Producers: Indonesia & Malaysia (88% of global production).

✔ Uses of Palm Oil:

  • Food: Found in processed foods (chocolate, margarine).

  • Cosmetics: Used in lotions, shampoos.

  • Detergents: Key ingredient in cleaning products.

  • Biofuels: 45% of European palm oil imports used in biofuels.

5. Global Palm Oil Trade

Year

Global Palm Oil Production (Million Tonnes)

1980

4.5 million

2014

70 million

2023-2024

85 million (estimated)

✔ Key Importers: India (19.4%), China (13.0%), Netherlands (6.1%), Pakistan (5.8%), Italy (4.3%).

🔹 Example: Indonesia & Malaysia account for 88% of global production.

6. Ethical Issues with Palm Oil Production

Issue

Ethical Concerns

Deforestation

Destruction of rainforests & habitats (e.g., orangutans).

Carbon Emissions

Slash-and-burn clearing releases CO₂.

Labour Exploitation

Low wages, child labour concerns.

Greenwashing

Some companies claim sustainability but continue harmful practices.

🔹 Example: Nestlé & Unilever have faced backlash for unsustainable palm oil sourcing.

7. Case Study: Iceland’s Palm Oil Ban

✔ In 2018, UK supermarket Iceland banned palm oil from its products.
✔ Used Greenpeace’s anti-palm oil ad, which was banned in the UK for being “too political”.
✔ Reintroduced palm oil in 2022 due to Ukraine war disrupting sunflower oil supply.

Was Iceland’s Ban Ethical or Greenwashing?

Arguments For the Ban

Arguments Against the Ban

Raised consumer awareness.

Did not promote sustainable palm oil.

Pressured suppliers to change.

Economic crisis led to policy reversal.

🔹 Example: A better approach may have been to support RSPO-certified palm oil.

8. Sustainable Palm Oil: RSPO Certification

Roundtable on Sustainable Palm Oil (RSPO)

  • Established in 2004 to promote ethical palm oil production.

  • Ensures deforestation-free & fair labour practices.

  • Used by Nestlé, Unilever, Mondelez.

✔ Key Certification Criteria:

  1. No deforestation of primary forests.

  2. No forced or child labour.

  3. Protects biodiversity.

🔹 Example: Ferrero uses 100% RSPO-certified palm oil.

Criticism of RSPO

  1. Weak enforcement – Some certified producers still violate sustainability laws.

  2. Lack of transparency – RSPO audits lack independent verification.

  3. Corporate Greenwashing – Some brands use RSPO labels without real change.

🔹 Example: Wilmar (largest palm oil trader) faced deforestation allegations despite RSPO certification.

9. Key Ethical Theories for Decision-Making

(A) Utilitarianism – “Greatest Good for the Greatest Number”

✔ Pro: Palm oil provides jobs & economic growth.
❌ Con: Deforestation harms ecosystems & indigenous communities.

(B) Deontology – “Duty & Rights-Based Ethics”

✔ Pro: Companies must follow ethical labour & environmental laws.
❌ Con: Can be hard to enforce across global supply chains.

(C) Stakeholder Theory – “Balance All Stakeholders”

✔ Pro: Companies must consider both economic & environmental impact.
❌ Con: Difficult to satisfy all stakeholders equally.

🔹 Example: Unilever balances profit & sustainability by committing to 100% sustainable palm oil.

10. Ethical Solutions for Palm Oil Industry

✔ Ban unsustainable palm oil, NOT all palm oil.
✔ Use RSPO-certified suppliers & improve third-party audits.
✔ Increase consumer awareness about ethical palm oil.
✔ Encourage alternative oils (e.g., algae-based biofuels).

🔹 Example: Nestlé & Mondelez committed to zero-deforestation palm oil by 2025.

11. Summary & Key Takeaways

✔ Global business ethics involve balancing cost efficiency, labour rights, and environmental impact.
✔ Relocating factories requires ethical consideration of wages, worker safety & environment.
✔ Palm oil is crucial for global trade, but its production causes deforestation & labour issues.
✔ RSPO certification helps, but faces greenwashing & enforcement problems.
✔ Companies must use ethical frameworks to navigate global sustainability challenges.