If we would like to answer to the question in consideration of what is generally accepted as ethical, the answer would be a categorical No; however the clamour generated, the legal implications and the fact itself that the episode has actually happened means that the answer is not so straightforward. It does deserve a much broader discussion.
The Trafigura case is particular because of the recent headlines that it has received all over the world, despite the facts date back to August 2006. The wide coverage of the incident given in the press and then amplified by the blogosphere has certainly contributed to a diffused revulsion of the public opinion towards the behaviour of the company; indeed, bumping toxic waste in a third world country with the potential environmental and human disaster surely hurts the sensibilities of many people.
If the act would have been the sole work of an individual, there is no doubt that he/she would be legally been held responsible for the damage; however the fact that we are discussing the activity of an organisation requires a different analysis. We may arrive to the same conclusions, though it is worth contextualising the fact to understand why this case may be different or to some extent be justified.
The UK legislation recognises the “duty of care” of an organisation, a proposition that implies accountability and therefore social responsibilities. Responsibilities are defined by laws; however in such case the law seems to have not been enough to bring a strong case against Trafigura, despite the objectionable events.
Indeed, according to Milton Friedman, an organisation’s responsibility does not go beyond the abiding to the rule of law; its social action, says the American economist, is realised in the mere creation of wealth.
Nowadays, we are obviously not satisfied with the neo-classical assumption; however Milton’s view represents the basis of our socio-economic framework, profiting is not banned and Governments are in charge of the distribution of the social wealth. So, why do we need organisations to act ethically?
The answer may lies in the definition that we give to wealth. The rational approach indicates in the economic maximisation of the resources the road to the happiness, the individual thrives to do better and seeks perfection. However, no individual is perfect and as we have recently seen, the implications for irrational exuberance are shared by the society as whole. The individual may aspire to be better; indeed our society rewards a place in the history to people that have most contributed to the welfare of many, not certainly to themselves.
The forms of contribution are subjective. They can be economically rational, legal, democratic and reverential of the host-culture; however organisations as entities that reflects individuals actions, have to nevertheless act in respect of the principle of inviolability of the human being, always and everywhere. A test that Trafigura has blatantly failed.
The actions of Trafigura in Ivory Coast are the consequences of specific decisions made by individuals that are part of our society, hence people that refer to a general accepted morality code. However, what has probably played a big role in this decision making process is the culture of the organisation and to some extent of the industry.
Trafigura is an Anglo-Dutch commodity trading company that aims, according to his mission statement, to be a major player in the market by spotting opportunities and profiting from the volatility of the commodities’ prices. It is not a listed public company, though it still operates in a legal framework and it is committed to the interests of its owners, investors and employees. Moreover, it is also involved in charity works through its Trafigura Foundation.
The financial industry has certainly contributed to the global growth of the past twenty years, though the recent events have highlighted that very often the motivation behind the industry performances was the size of bonuses. The industry is frequently characterised as very masculine, hence rational, calculating, where power and politics are big determinants.
If we consider Trafigura behaviour within this context, we should accept the relational view of power or rather the fourth dimension of power theorised by Foucault and critically developed in Linstead et al (2009).
According to this perspective power is not seen as held by individuals but rather it is implicitly accepted as the normal state of the things. Hence, specific practices, techniques and procedure are developed in attempts to shape the conduct of the others (Linstead, 2009 p.281) that unconsciously understand them as the constructed reality.
Indeed, if we look at the emails that the Trafigura people were sending each other during the negotiations to get rid of the toxic waste, we fail to individuate a person or a group that force the hand. Instead we assist to a shared removal of any potential regret for the known consequences of their actions, as this is the way things are and they were acting consequently.
In fact, for the Probo-Koala incident, the company has defended itself vigorously denying that the environmental damage on the coast of Abidjan has been caused by its activities, despite an UN report says otherwise.
Another important factor that the Trafigura case has highlighted is the globalisation of the response to the company’s behaviour. In fact, in finding a place where to bump the caustic soda, Trafigura has consulted different government and agencies, each ones holding different rules.
The fact that the company has not been able to discard of the toxic waste in Netherlands is the consequence of the Dutch law conforming to an ethical value of not harming their people and their environment. Indeed, the company finally found in an Ivorian contractor a person able to discard the waste without causing too much noise; that is not to say that Ivory Coast’s laws are not ethical but surely in a semi-dictatorial country very often the ethical values corresponds to the personal interests of few.
The fact that organisations may encounter different ethical standards and the fact itself that organisation are influenced by an own national culture has been theorised by G. Hofstede. According to his perspective, national cultures are dominant in an organisation; hence the organisation culture reflects the shared values and practices of a particular nation or region.
There is no doubt that Trafigura behaviour reflects an indiscriminate form of Capitalism typical of Anglo-Saxon socio-economic models; however it still represents an abjuration of the shared ethical values of the culture that it stands for.
Indeed, the massive reaction of the social-community to the episode has signified that the defence of the inviolability of the human rights is not circumvented to national boundaries but it is instead projected wherever any abuse may happen, regardless of the legal framework in which it takes place. Globalisation has enlarged the stake holding to which an organisation responds.
As a man of faith I wish the world were otherwise, Mr. Obama said, but as president I must treat it as it is.