The Business Ethics Blog

Merck (the pharmaceutical company) has apparently decided to stop lobbying state legislatures in the US to make their new HPV / Cervical Cancer vaccine mandatory for young girls.

(I blogged about this last May: Merck’s Cancer Vaccine & the Religious Right)

Here’s the recent story, via ABC News: Drug Giant Merck Suspends Campaign for HPV Vaccines

Drug manufacturer Merck & Co. announced Tuesday that it would suspend its campaign urging states to implement mandatory vaccination programs for preteen girls with Gardasil, its human papillomavirus vaccine .

According to the company, Merck made the move to avoid having its campaign take attention away from the bills being drafted in many U.S. states that would make the vaccine mandatory for preteen girls.

So, essentially the folks ar Merck are stopping their lobbying campaing because they’ve realized that it’s actually counterproductive. Corporate lobbying generally is a really great business ethics topic: it seems perfectly legitimate for companies large and small to try to influence public policy, but with great power comes great responsibility.

Of course, Merck hasn’t stopped promoting Gardisil altogether. If you haven’t already, you’ll soon bump into an ad like this, which I ran into while reading the news this morning:
What’s interesting about the ad campaign is the focus on parents protecting their daughters. I assume this campaign is going to result in some serious soul-searching for a lot of parents — parents who love and want to protect their daughters, but who don’t want to admit (or foresee) their daughters being sexually active. It’s going to make for some rather complicated parent-daughter conversations, I’d say…

Oil execs must wake up every day and thank their lucky stars that there are tobacco companies out their making oil companies look good in comparison.

Yesterday, I blogged about a plan by RJ Reynolds to spend a lot of money to promote a new brand aimed specifically at women.

Now comes news that 3 tobacco companies will challenge a Canadian law that restricts cigarette advertising in various ways, including forcing companies to place graphic health warnings (like the one above) on cigarette packages.

Here’s the story, as told by the Halifax Chronicle Herald’s Christopher Maughan: Tobacco industry challenges ad laws

Canada’s three major tobacco companies are at the Supreme Court arguing for looser restrictions on tobacco advertising, saying the current law is so vague it amounts to a total ban and violates the companies’ constitutional right to advertise.
Under the current federal Tobacco Act, cigarette manufacturers can advertise in adult-only public places, in certain magazines, and through direct mail. But few companies have actually bothered because of what they say is a vague section of the Tobacco Act aimed at forbidding advertising aimed at kids.

The debate over freedom of commercial speech is a complicated one. Freedom of speech is a dearly-held freedom in all civilized parts of the world. But does that right extend to corporations? When you limit the free speech of a corporation, are you effectively limiting the free speech of the people who collectively make up the corporation? What kinds of ill effects must be anticipated from commercial speech before we’re justified in restricting it. Or are restrictions never justified?

I’ll just add one further thought, specific to the current case: It’s hard to square the tobacco companies’ opposition to limits on advertising with their claim (which they often make) that their ads are only aimed at converting people who currently smoke to their brand. The limit on advertising affect all firms equally (well, except that it’s tougher on new firms, firms that don’t have well-established brands). So, generally, big tobacco can only complain if it sees the limit on advertising as preventing them from expanding the total number of smokers, something they have claimed not to be trying to do.
So, evern IF they’re right that the limit on advertising is a wrongful restriction of commercial speech…why exactly are they bothering to fight it? Please don’t try to tell me that they’re doing it on principle.
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Thanks to Lorraine for alerting me to this story!

It’s almost as if, with increasing attention being paid to breast cancer lately, the folks at R.J. Reynolds figured they could afford to help a few more women get lung cancer, and maybe no one would notice. Never mind that lung cancer already kills a lot more women than breast cancer does.

R.J. Reynolds, the tobacco company, is about to start a new advertising campaign, at an estimated cost of $25 to $50 million, the foreseeable consequence of which will be the deaths of a lot of women.

That’s the estimated cost of the ad campaign to introduce Camel’s latest sub-brand, “Camel No. 9,” which is aimed at women. Apparently Joe Camel has been a guy’s guy for too long. As of this year, he’s got an equal helping of love for the ladies.

See the New York Times story here:
A New Camel Brand Is Dressed to the Nines

THE next time R. J. Reynolds Tobacco asks smokers to walk a mile for a Camel, watch how many of them are in high heels.
Reynolds, eager to increase the sales of its fast-growing Camel brand among women, is introducing a variety aimed at female smokers. The new variation, Camel No. 9, has a name that evokes women’s fragrances like Chanel No. 19, as well as a song about romance, “Love Potion No. 9.”

What can I say that’s not obvious? Yeah, cigarettes are legal, but not everything that’s legal is ethical. Sure, people choose to smoke…well, sort of. Most people start due to peer pressure (and advertising?), and keep smoking because nicotine is addictive. But hey, everyone’s got a right to make a living, right? And sure, RJR says it’s only trying to attract women who already smoke to switch to their brand. But that’s neither plausible nor exculpatory. All of that is obvious.

So, here’s the discussion question for the day. How much individual, personal responsibility falls on each and every employee at R.J. Reynolds, for selling a deadly, addictive product? The industry, as a whole, doesn’t care about the ethics of selling their product, and from a legal point of view, their huge profits allow them to survive even enormous lawsuits. But don’t the people who work for these companies deserve some blame? (Clearly, the blame can’t be too specific, and can’t be shared equally. A janitor mopping the floors at RJR’s corporate headquarters is indeed an employee, but he can’t reasonably be blamed for the death of some specific individual smoker, even though he’s contributing to the success of the business that made the product that contributed to her death. But just as clearly, senior executives can’t escape personal moral responsibility for statistical increases in deaths associated with their products. Right?)
But I’ve said enough. Discuss among yourselves.

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Tip of the hat to Andrew potter, who appropriately labelled Camel the “evil brand of the day.”

The CRO (Corporate Responsibility Officer) Magazine has just announced its 8th annual list of the “100 Best Corporate Citizens 2007”. As always, the list itself and the article that accompanies it both make for interesting reading.

Topping the list are:

1. Green Mountain Coffee Roasters, Inc.
2. Advanced Micro Devices, Inc.
3. NIKE, Inc.
4. Motorola Inc., and
5. Intel Corp

Here’s a bit of the article that accompanies the list:

Environmental responsibility. Corporate governance and ethics. Fairness toward employees. Accountability to local communities. Providing responsible products and service to customers. Maintaining a healthy rate of return for investors.

Those are just some of the challenges of responsible business in the 21st century, challenges that are being met head-on by the 100 companies listed. These are the 100 Best Corporate Citizens for 2007—companies that are proving that good corporate citizenship and good business go hand in hand.

The 100 Best Corporate Citizens list takes a systematic approach to assessing the social and environmental characteristics of a good corporate citizen. The list is drawn from approximately 1,100 publicly held U.S. companies in the Russell 1000, S&P 500 and Domini 400 indices, relying on extensive data collected by KLD Research & Analytics, an independent investment research firm in Boston.

A couple of comments….

My first comment is about size. It’s interesting that the list seems to be dominated by big companies. This means one of two things. It could be that the evaluative criteria used are biased in favour of big firms (in which case they ought to be fixed). The other possibility is that, on average, big firms make better corporate citizens, a thesis that is strongly at odds with many people’s perceptions (though that doesn’t make if false). (FYI, there’s a small but useful literature about the various ethically-significant ways in which small-and-medium enterprises — SME’s — differ from big firms. See, for example, Laura Spence, “Does size matter? The state of the art in small business ethics,” Business Ethics, A European Review, Volume 8, Number 3, July 1999.)

My second comment is about aggregation of indicators. As regular readers will know, one of the criticisms that Wayne Norman and I aim at the so-called Triple Bottom Line is that it’s impossible, even in principle, to meaninfully aggregate various measures of social performance to generate a social “bottom line.” But of course, CRO does reach a sort of “bottom line” of corporate citizenship for each company it studies, upon which it bases its ranking. In particular, it does so by averaging the scores that a company attains in each of 8 categories (Community, Diversity, Environment, etc.). And this method probably does a decent job of indicating social performance. But please do take note of the method used: mathematical averaging. Averaging implies that each of the factors averaged is exactly equally important. So, for example, it implies that Employee Relations is no more important than Community (an ethical perspective which is at the very least debatable). It also means that lousy performance in any area (even a really crucial area) can be hidden. Doing poorly on environment? That’s OK, you did great on Employee Relations, so it ‘all averages out.’ Now, I’m not actually trying to criticize the methodology here. It actually seems pretty reasonable, for the purpose at hand. I just want everyone to be aware of the value assumptions that go into the design of such a ranking.
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(p.s. Here’s a curious question. I saw a press release today from Motorola, touting the fact that they were #4 on the Top 100. Given that thousands of companies are eligible, ranking ANYWHERE in the top 100 is an accomplishment. But rhetorically, it might sound funny to brag about being #92 or something. I wonder, of all the companies that issued press releases about their ranking, what was the LOWEST ranked company?)

This is a messy posting about a messy topic. It’s about an unflattering review of an unflattering book about a whistleblower.

Here’s the brief version of the long, messy story, for those unfamiliar with it:
Dr. Nancy Olivieri is a specialist in the treatment of thalassemia, an inherited blood disease. She works at the Hospital for Sick Children in Toronto. In 1996 she came to believe that the experimental drug she was studying, called deferiprone, was having serious side effects on the children she was treating. She decided to inform patients and their families. Apotex, the copmany that makes deferiprone, didn’t like that. They stopped the trials, withdrew funding for the research, and reminded Dr. Olivieri that she had signed a confidentiality agreement. Then, basically, everybody sued everybody. The Hospital and the University of Toronto (with which the hospital is affiliated) didn’t back Olivieri, and some think that had something to do with a large donation the university was expecting from Apotex. Olivieri was hailed as a hero, a whistleblower, protecting her patients by standing up to powerful corporate interests. A report was commissioned by the hospital; it was critical of Olivieri, but this report was itself later demonstrated to be based on misinformation. An indepedent inquiry sponsored by the Canadian Association of University Teachers exhonerated Olivieri, but was highly critical of Apotex, the University, and the Hospital.

OK, fast-forward a few years.

Miriam Shuchman (a psychiatrist and medical journalist) publishes a book called The Drug Trial: Nancy Olivieri and the Science Scandal that Rocked the Hospital for Sick Children. The book is highly critical of Olivieri.

Fast forward another year or two. Philosopher Arthur Schafer publishes a review of Schuchman’s book in the scholarly journal, Bioethics, called “Science Scandal or Ethics Scandal: Olivieri Redux” (subscription required) The review is devastating. According to Schafer, the book manifests a clear bias against Olivieri: it focuses on the woman’s alleged character flaws, and papers over those of her critics. It also unfairly (and unrealistically) blames Olivieri for the deaths of patients who didn’t get access to deferiprone. Further, Schuchman relies extensively on quotations from anonymous sources — nothing wrong with the odd anonymous source, of course, but it’s a dodgy way to build a case. And some of the sources she does cite explicitly are people who have already been thoroughly discredited. Finally, Schafer notes a number of serious factual inaccuracies in Schuchman’s book, including at least one instance in which a quotation is wrongly attributed to Schafer himself.

I haven’t read the book myself (nor do I plan to), but if even half of Schafer’s criticisms are valid (and he’s a thorough scholar, so I suspect it’s all valid), there’s a serious problem with the book having been published at all (by Random House Canada…).

But what concerns me most about the book, and about the decade-long controversy, is the focus on one person, on Olivieri. For Shuchman to focus on a single individual might have been good from the point of view of selling books, but from the point of view of understanding the ethics of the case, it was a mistake. It might even be a mistake to lionize Olivieri as a hero. This shouldn’t be a story about heroism. Personally, I have great respect for Olivieri (though I know her only by reputation), but the point is that this case isn’t about her. It’s about sick children, the institutions that are supposed to be dedicated to helping them, and the standards and procedures that smart, well-intentioned, compassionate people put in place for reviewing novel medical treatments.
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Update: Arthur Schafer says that people who want to see his article may feel free to contact him by email. Schafer asked me to add that — as he notes in his review — Shuchman also accuses Olivieri of being wrong about the science in this case, but that Shuchman does a poor job of defending that claim.

The web makes it easier to do lots of things, including bad social science. This time, it’s bad social science in aid of evaluating corporate social impact.

dotherightthing.com

dotherightthing is a place online where you can get unfiltered information about the impacts of companies on people and the world and make it worth their while to “do the right thing.”

Basically, it’s a place where people cite news stories (or gossip) about various companies, indicate just how well or badly they think the story (or gossip) reflects upon the company, and then a net score is eventually produced to tell you how socially responsible the companies are. Or, as the site’s owners put it, the site lets you “Track the ‘social performance’ of companies in real time”. (That, of course, is false. The site does no such thing. What it does is lets you track reports of social performance in real time. Big difference.)

The flaws, here, are mostly too obvious to state. When an accusation counts as data, where the contributors of data are self-selected, and when anonymity is encouraged, you’re pretty much toast as far as methodology goes.

Here’s a nice commentary about this site, courtesy of blogger Marginal Revolution: Measuring the social impact of corporate behavior
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Thanks Andrew!

(Sorry for the long break, blog fans. Just been busy…)

So apparently a handful of Senators are sponsoring this new bill to help deter US companies from using foreign sweatshops.

Here’s the story, as reported in the Contra Costa Times: Senate sweatshop bill gains bipartisan support

A bipartisan group of senators introduced legislation Tuesday aimed at preventing American companies from profiting from the use of foreign sweatshops and other unfair labor practices abroad.

Sen. Lindsey Graham, a South Carolina Republican, joined four Democrats and independent Sen. Bernard Sanders of Vermont in sponsoring a bill that would allow U.S. firms to sue competitors that they believe are selling imported products made in overseas sweatshops.

A couple of points to consider, here (particularly for those of you who haven’t thought/read a lot about sweatshops…):

1) There’s no question the worst sweatshops out there are truly awful. Conditions are often inhuman. Some people figure “sweatshop” just means “less nice than North American Factories.” Not true. Of course, there’s bound to be a whole range of conditions, depending on the brutality of a factory’s owners/operators, degree of effective local regulation, and the level of desperation among the workers. (I sometimes hear people say, “Yeah, they get paid less, but 20 cents an hour is a pretty good wage over there!” True, local cost of living matters. But you can’t just assume…you’ve got to get the facts.)

2) Yes, for many countries, sweatshops to supply North American retailers are an important source of investment and employment. So it’s foolish just to say “shut ’em all down!” In this regard, I’ll be curious to see what test they’ll use to determine if a particular factory is a “Sweatshop.” Most of us have the luxury of judging such things from our armchairs, because we don’t have to justify (and enforce) our views. And reputable retailers can focus on making things better rather than focusing on which factories are “really” sweatshops vs which ones are just a little sub-standard. But if this bill goes through, someone will have to define, clearly, what counts as a sweatshop. Lawyers: on your marks, get set…

3) I read in another version of this story that the proposed fine is $10,000 per offcne. Is that some sort of joke? Unless that’s the fine per day or something, it’s not going to impress any of the big retailers (Wal-Mart, Target, etc.)

4) Sometimes it’s not just about immediate consequences. Sometimes symbolic gestures matter. So it may be that this bill has some moral value — as a public condemnation of certain labour practices — even if the mechanism is complicated and the fine too small.

This is Day 4 of Sin Week, the Business Ethics Blog’s examination of various “sin industries.” Today’s focus is the arms industry. (To reiterate a warning from Day 1: take the term “sin” with a grain of salt. I’ve got nothing against national defence, but because of its less-noble uses, the arms industry is typically included on the list of so-called “sin industries.”)

As it happens, one of the top headlines in Canadian news today is about a Canadian defence contractor, Bell Helicopter (a subsidiary of Bell Helicopter Textron Inc., of Texas). Here’s the CBC’s version of the story: Montreal workers forced off contract over U.S. security concern, and here’s Harper calls U.S. security demands ‘big worries’.

The basics of the story are this: U.S. regulations forbid citizens from certain countries (including Syria, Cuba, Haiti, and others) from being involved in the construction of strategic military weapons. Bell Helicopters in Montreal is making choppers for the US Army, and some of its employees — all Canadian citizens — are also citizens of countries on the US government’s black-list. So, Bell has to either get rid of the employees or lose the contract. That would be a tough problem for any company, but it gets worse: Section 15 of Canada’s Charter of Rights & Freedoms forbids discrimination based on “national or ethnic origin.” Now technically (per s. 32), the Charter only applies to actions taken by government, not by private companies, but such fundamental constitutional documents can reasonably be taken as providing ethical guidance for Canadians more generally and for Canadian companies in particular. So, if Bell Helicopter discriminates against (whether by firing or arguably even by reassigning) some of its employees on the basis of national origin, it does so in contravention of core Canadian moral values.

This is a new twist on a standard business ethics issue, namely the question of how international businesses should behave in the face of differing ethical standards in different countries. (Standard examples are things like: should a Canadian company operating a factory in Mexico apply Mexican environmental standards or higher, Canadian standards? Should an American firm operating in Saudi Arabia work according to Saudi standards of gender (in)equality, or American standards?) In the present case, we see a conflict of values between two similar countries: both the US and Canada are Western nations with advanced economies, stable, demoncratic, governments and well-functioning legal systems with strong (but not unwavering) traditions of protecting individual rights.

What’s Bell to do? For some people, rights are sacrosanct. For others, rights merely produce a presumption against certain behaviour, a presumption which is defeasible under extenuating circumstances. Let’s assume the latter, more permissive, view, for the sake of argument. Clearly, even on this view, violation of rights can’t be taken lightly. But perhaps minor infringement (such as reassigning these workers to different projects) might be justifiable, if the end being sought by the US government (presumably national security) is sufficiently compelling. The trouble here is, it’s hard to see how this particular rights violation — discrimination based on national origin — accomplishes anything. It’s just not reasonable to think that retaining citizenship in one’s country of origin implies sympathy for that country’s current government, let alone a willingness to commit criminal acts on behalf of that government. So, as important as national security is, and even if it’s plausible that some forms of discrimination might be reasonable in defence of national security, it just doesn’t seemt o make sense here. Sometimes the ends do justify the means, but there at least has to be good reason to think that the means will be effective.

Today is Day 3 of our examination of “sin industries.” (I know…yesterday should have been day 3. Feel free to assume that I was unable to blog yesterday because I was recovering from the previous night’s debauchery. I’m not saying that’s what happened, but feel free to assume.)

Today’s posting is about pornography (a.k.a. smut, “adult” entertainment, etc.). As it happens, this story is about the end of the porn industry that almost no one is willing to defend, namely child porn. This story is from a Swiss website:
Credit card checks for child porn welcomed

Earlier this week German police used customer details provided by credit card companies to track down suspected subscribers to an illegal child porn website.
…
…as part of the German raid the prosecutors had demanded all transactions for a specific account as well as a specific sum of money which were connected to products involving child pornography.
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“The companies sifted through all their customers according to these two parameters and were able to say which of their customers had paid this amount of money to that account…”

This story could be seen as involving a couple of ethical issues, for the credit card companies involved. On one hand (and this is the issue flagged by the author of the story), the companies allowed authorities to sift through information on millions of customers — most of whom had done nothing wrong. So, their privacy was invaded. That’s not to say that the invasion was not warranted, but privacy (especially vis-a-vis the state) is pretty important to most of us, so there has to be some compelling countervailing value to justify such an invasion. Fighting child pornography is a pretty significant countervailing value, so for many people this one will be a no-brainer.

The other ethical issue, of course, is the credit card industry’s implicit support of the porn industry in general, and the child porn sub-industry in particular. I suspect that credit card companies (like banks generally) try their best NOT to know what business their corporate clients are in, and to be agnostic about what sorts of business is legitimate. Their child-porn customers are likely the “sacrificial lamb,” here (though the “lamb” metaphor probably wrongly implies innocence, here). Rolling over so readily when authorities come knocking for THOSE records may well be what helps credit card companies justify their general attitude that they’re merely helping companies do business, rather than being in the porn business themselves.

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A related news item, just FYI:
Unique Video Glasses Offer Privacy To Porn Lovers

A Taiwanese company has unveiled its collection of sleek video glasses that turn film viewing into a private affair, at the world’s biggest porn show on Wednesday.
The video glasses are a boon for porn lovers as they offer high level of privacy with complete viewing session in an inbuilt screen with audio through an ear piece.

OK, sure, so people won’t be able to see what you’re watching. But don’t you think maybe if you’re watching porn on your video-glasses at the laundromat or while waiting in line at the grocery store, those around you will notice the, um, heavy breathing, etc.?

I couldn’t choose between gambling and porn (ahem!), so I flipped a coin: it came up “heads”, so today we’re talking about gambling.

As is the case with many of the so-called “sin industries,” gambling seems like one of those things that’s entirely harmless, when enjoyed in moderation. (We did a lot of gambling — playing cars for dimes — at my parent’s house over the holidays.) But gambling, as an activity and as an industry, still has a pretty nasty rep. There seem to be two reasons. One is gambling’s association with other vices, and indeed with organized crime. That association isn’t a necessary one, of course: there’s nothing about gambling itself that says that the Mob (or other dodgy organizations) have to be involved. But historically, some pretty organizations dubious organizations have been involved in running gambling operations. Secondly, gambling has a nasty tendency to ruin the lives of a certain percentage of participants. See, for example, this story about gambling addictions:

Gambling treatment program won’t cure addiction
and…
Pull ‘misleading’ scratch tickets, gambling watchdog group urges

(For a depressing look at what happens to those who win at gambling, check this story: 8 lottery winners who lost their millions)