Unethical Activity of Rio Tinto at Hunter Valley

Question: Discuss about theUnethical Activity of Rio Tinto at Hunter Valley. Answer: Introduction Ethics involves carrying out activities that govern the moral beliefs and principles of a person or a group. It also involves the activities and principles that govern the course of action, of an organization.Rio Tinto is a corporate organization, and it has its own ethical principles that govern its operations. The company is currently engaged in utilizing the aboriginal land of Australia. This is without seeking consent from the traditional owners of these lands, resulting to a conflict between the company and the owners of these lands.Some of the activities of Rio Tinto are found in the Kakadu National Park and the Hunter Valley, and they have led to the destruction of the environment. Based on the utilitarian approach, with the application of the OECD principles of governance, Rio Tinto has engaged in unethical behavior. The OECD principles aim at promoting the welfare of the society and that of the company[1]. The principles aim at creating a balance between satisfying the needs of a company and that of the community the company operates in.Creating a balance between the satisfactions of various stakeholders in an ethical issue is one of the provisions of utilitarianism theory. According to utilitarianism theory, the action of an organization is ethical, if it results to the benefit of the majority[2]. From this definition, it is possible to denote that the actions of an organization should not concentrate on satisfying only its needs, but also the needs of the community. In fact, it is the needs of the community that must be under priority. The OECD principles aim at ensuring that the actions of a company satisfy the needs of the community. However, Rio Tinto is unethical and breaches the principles of OECD. For instance, in relation to the Hunter Valley, the expansion initiative of Rio Tinto endangers the 113 aboriginal sites that are found in the Hunter Valley. Furthermore, the members of the community are concerned that the continued expansion of the Workworth mine will result to the destruction of the ecosystem of the community[3]; depicted, through the destruction of the Warkworth Sands Woodland. Additionally, the members of the community argue that the continued expansion of the Workworth mine will also result to the destruction of the natural habitats of animals; hence, destroying the environment. It is on this basis, that the members of the community appealed to Rio Tinto to halt its operations, to no avail. By continuing to pursue its expansion activities at the Hunters Valley, Rio Tinto was breaking the fourth principle of the OECD principles of governance.According to the fourth principle of the OECD, the governance structure of a corporate organization should recognize the rights of the stakeholders of the organization[4]. These rights can either be established by law, or through the process of mutual agreement.Furthermore, the principle encourages active cooperation and engagement between the organization and the stakeholders of the organization. This cooperation should lead to the creation of jobs, wealth, and the development of sustainable financial practices. However, the expansion activities by Rio Tinto were breaching this fourth principle, because it did not consult with the traditional communities in the region[5]. These traditional communities are stakeholders of the organization through mutual consent. Porter and Kramer therefore belief that the solution to this problem, is for a company such as Rio Tinto need to redefine their objectives, and come up with strategies aimed at creating a shared value[6]. This is a process that involves engaging in their economic activities, in a manner that will also benefit the traditional societies that are living in the region. Through a consultative process, chances are high that the company will come up with strategies that will satisfy the needs of the community, without compromising its objectives of making profits.Therefore, chances are high of coming up with a solution that will satisfy all the stakeholders of the organization; hence, satisfying the fourth principle of the OECD. Finally,failure by Rio Tinto to consult the traditional communities of the Hunter Valley was unethical, and a violation of the fourth principle of the OECD code of governance. Under this principle, a corporate organization must enact polices that satisfies and meets the needs of all its stakeholders. Therefore, failure to meet these needs is unethical. Rio Tinto does not concern itself with satisfying the needs of the local communities at the Hunter Valley. It is engaged in an expansion activity that threatens the environment of the region. Therefore, Rio Tinto must follow the principles of Porter and Kramer that will help to create a shared value, for the benefit of the society. Bibliography Books, Journals and Articles Du Plessis, J. J, James McConvill and Mirko Bagaric, Principles Of Contemporary Corporate Governance (Cambridge University Press, 2005) French, Robert E, Ethical Decision-Making From A Consequentialist Perspective (Edwin Mellen Press, 2008) G20/OECD Principles Of Corporate Governance (Organization for Economic Cooperation Development, 2015) Oecd., G20/Oecd Principles Of Corporate Governance (Russian Version) (Organization For Economic, 2016) Porter, Michael E and Mark R Kramer, Creating Shared Value (Harvard University, Graduate School of Business Administration, 2011) Tarantino, Anthony, Manager's Guide To Compliance (John Wiley Sons, 2006)