Business Ethics and the Crisis in Japan

A couple of people have asked me recently about what business ethics issues arise in the wake of the Japanese earthquake, tsunami, and nuclear crisis. As far as I’ve seen, the media hasn’t paid much attention to business ethics issues, or even on businesses at all, in their coverage of the disaster(s). But certainly there are a number of relevant issues within which appropriate business behaviour is going to be a significant question. Here are a few suggestion of areas in which the study of business ethics might be relevant:

1) The nuclear crisis. Although their role has not been front-and-centre (unlike, for example, the BP oil spill), at least a couple of companies have played a significant role in the crisis at the Fukushima I Nuclear Power Plant. The reactors there were designed by General Electric, who surely face questions about the adequacy of that design and the relevant safeguards. And the plant is owned by the Tokyo Electric Power Company (TEPCO). TEPCO has been criticized for its handling of the disaster, including its notable lack of transparency. TEPCO also faces a difficult set of questions with regard to the ongoing risks to employees, including those who have vowed “to die if necessary” in order to protect the public from further risk. (For more information, see the wikipedia page about the Fukushima I nuclear accidents.)

2) Disaster relief. There is clearly an opportunity for many companies, both Japanese and foreign, to participate in the disaster relief effort. Whether they have an obligation to do so (i.e., a true corporate social responsibility) is an interesting question, as is the question of the terms on which they should participate. I’ve blogged before about the essential role that credit card companies play in disaster relief by facilitating donations; do credit card companies (and other companies) have an obligation to help out on a not-for-profit basis, or is it OK to make a profit in such situations?

3) Pricing. The topic of price-gouging often arises during and after a natural disaster, though I haven’t heard any reports of this in the wake of the earthquake in Japan. It’s a difficult ethical question. On one hand, companies that engage in true price gouging — preying on the vulnerable in a truly cynical and opportunistic way — are rightly singled out for moral criticism. On the other hand, prices naturally go up in the wake of disaster: picture the additional costs and risks that any company is going to face in trying to get their product into an area affected by an earthquake, a tsunami, and/or a nuclear meltdown.

4) Investment and trade. A major part of Japan’s recovery will depend on investment, both investment by foreign companies in Japan and investment by Japanese companies in the stricken areas of that country. This is clearly less of a concern than it would be in a less-economically developed country (like Haiti, for instance), but it’s still relevant. So the question arises: do companies have an obligation to help Japan rebuild by investing? If a company is, for example, deciding whether to build a new factory in either Japan or another country, should that decision be influenced by the desire to help Japan rebuild?

5) Consumer behaviour. Just as companies have to decide whether to invest in disaster-stricken nations or regions, so do consumers. Do you, as an individual, have any obligation to “buy Japanese,” in order to help rebuild the Japanese economy? Does it matter that Japan is a modern industrialized nation, as opposed to a developing one?

3 comments so far

  1. Romy on

    Good point raise..I’m really interested about you opinion on disaster relief..either its a CSR or for profit motive it hard to define it goes back to the Company(human that make decision) itself. Another one just my thought regarding investment in Japan. If companies investing in Japan for the sake of helping Japan to rebuild back their economy..how about the others countries where they are in developing and least developed countries..why not before this investment are direct to them?..It all goes back to the company corporate motive…not to say we should not help Japan..we should because Japan itself is one of the top player in world economic..

    It just that other than helping country to recover their economy..investors should also look at the countries that been struggling looking for FDI..least develop one

    thanks for the articles..have a nice day
    ~just my thought~

  2. Chris, you only scratched the iceberg on the appalling lack of ethics on the nuclear front.

    What are the ethics of…
    * Building multiple reactors on earthquake faults (Japan is known for decades as extremely seismically active, and has had quakes in the past that were of comparable strength)
    * Building reactors near faults, anywhere in the world–this was in issue I wrote two articles about back in 1979 or 1980, from easily available information, specifically about the Indian Point reactor that sits a shudderingly close 24 miles from New York City)
    * Building reactors at all, when we have no permanent waste solution, high risk of accidents, a terrible safety record from the get-go, little or no actual net energy gain, and in the US, an insurance system that protects, for all practical purposes, only the plant owners when things go wrong (see http://greenandprofitable.com/category/energy-sustainability/ – three out of the four most recent posts explore aspects of this)
    * In the case of Tokyo Electric Power, emitting flat-out lies about safe radiation levels and other complete claptrap, as well as having totally inadequate plans not only to operate the reactor but to deal with a crisis–and yes, my choice of “emitting” was quite deliberate.

    • John M on

      Shel, it was the first bit of your third bullet — no permanent waste solution — which seems the most ethically problematical.

      Co-locating temporary storage pools, aka zircon bombs, full of immediate post-production fuel assemblies outside of containment, but right above the reactors in the same building seems beyond irresponsible.

      Fukushima I’s 90% full common storage pool, with 60 percent of all the nuclear waste ever generated in the 40 year history of this 6-reactor station is sitting right behind what’s left of reactor building No. 4. It’s certainly not ethical to let this situation develop, before long-term storage technology is even perfected, at this plant and at most power stations like it everywhere.

      Insiders have known about these problems for a long time. In December 1952 a serious meltdown occurred at a plutonium reactor at Chalk River, and the “Fukushima 50″ team which dealt with the crisis was led by, of all people, Jimmie Carter. That experience got him to do some ethical things about nuclear policy when he was president, but he’s one bright spot in 60 years of willful blindness.


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