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:

🔹 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

✔ 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

🔹 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?

🔹 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.