Simone De Beauvoir Ethics Essay Award

SIMONE DE BEAUVOIR ETHICS ESSAY Sustainable Ethics in the Context of Local Community Development Team Members: Debbie Asirvatham, Cecile Dupin de Saint Cyr, Tiffany Uman

Introduction In today’s globalized world, there is a trend for corporations to focus on a triple bottom-line that encompasses economic, environmental and social responsibilities, as opposed to using profitability as the sole indicator of success. These considerations are further magnified in industries where multiple stakeholders are involved and where ethical complexities are predominantly found. The mining industry is one that typifies this situation, and local community development is one major ethical concern that companies operating in this line of business must consider. When engaging in mining activities around the world, what is a company’s obligation, if any, towards the development of the local community? Rio Tinto Alcan (RTA), a global leader in the mining industry, recognizes that they are obligated to act as an agent of local development in the countries in which they operate. In addition, they acknowledge that they are not the only party involved in this development process and, as such, must determine the extent of their ethical responsibilities with respect to other stakeholders. This is further supported by the company’s shift in strategic framework to one that is now focused on being a co-facilitator, co-initiator and supporter of sustainability. Therefore, the question then becomes, how should RTA develop boundaries to ensure the sustainability of their ethical obligations?

Current Situation In order to effectively address this question, we have narrowed our focus to RTA’s Ghanaian operations. This represents a key pilot location on which to test sustainable practices that would likely be conducive to other regions. Having operated in Ghana for over sixty years, RTA has established strong relationships with local stakeholders as well as a better understanding of their needs and environment. In response to its recognition of giving back to local communities, RTA set up a medical centre open to the entire local community, contributed annually US $500,000

1 towards the maintenance of the hospital and pledged $300,000 over three years towards the achievement of the Millennium Development Goals set out by the United Nations. However, they have not established a means to track the allocation and usage of these funds, and hence are not able to measure the sufficiency nor the sustainability of these actions for all stakeholders involved.

Stakeholder Analysis While all stakeholders (i.e. RTA, District Assembly, NGOs, local community and employees) share a common objective towards achieving local community development, they must balance these desires with other respective interests. For instance, RTA must satisfy their fiduciary responsibility to generate profit for shareholders, while the District Assembly must minimize dependence on a foreign corporation. NGOs, communities and employees would surely benefit from the improvement in any local development plan put in place. In order to assure sufficiency and sustainability in RTA’s ethical obligations in Ghana, it is essential to outline boundaries surrounding their efforts.

Defining Boundaries We have developed three boundaries from which mutual benefits can be realized, namely local development, financial feasibility and value optimization. With respect to local development, the ethical contributions must be relevant to RTA’s core business and competencies. With respect to financial feasibility, clear objectives and evaluation measures must be laid out for the allocation and usage of funds. With respect to value optimization, RTA must leverage its modified strategic framework in order to outline the roles and goals of all stakeholders involved, while minimizing dependency.

Recommendation Despite incurring successive losses in Ghana, RTA continues to conduct mining operations there as they believe other benefits can be accrued. Moreover, their actions stem from a genuine desire to better the local community as opposed to boosting their image back home. Though sincere, the sustainability of such actions is questionable. Therefore, we have created a customized development plan for the Awaso operations

2 which are in fact sustainable when benchmarked against the boundaries outlined and also take into account the major local community priorities. Our plan encompasses these very priorities as well as represents the shift in strategic framework that the company has undergone. In doing so, our proposed model addresses benefits of Support, Health, Infrastructure, Financing and Training (S.H.I.F.T.). S.H.I.F.T. is comprised of three components, namely, the building of a local community centre, improved educational programs and micro-credit financing. The first initiative entails the construction of a community centre in order to address lacking infrastructure and provide a resource for multi-purpose activities. Next, the educational programs would be a three-fold approach. First, given that the RTA hospital is the only one to have an ultrasound machine, further development of a maternity specialization would help combat the high mortality rate among new mothers and children. Second, an alliance with the Ghana Health and Education Institute would improve the quality of programs targeting HIV/Aids, vocational training and literacy. Third, employee-specific certifications would build stronger affiliations with RTA, raise overall morale and create a sense of continual achievement. Finally, upon the expiration of current RTA donation plans, offering micro-credit would stimulate entrepreneurship and help lift the local economy out of the poverty cycle. The ethicality of this solution lies in the fact that it satisfies the three boundaries outlined earlier. With respect to local development, all initiatives are based on the local community priorities. Moreover, the recommendation is financially feasible and sustainable given that all costs are allocated wisely while encouraging continual flows into the RTA funding pool. Lastly, value is optimized as not only do these initiatives benefit all stakeholders, but they also delegate responsibilities among the parties, thus, minimizing dependence. In creating a model that respects the stated boundaries, we have constructed a framework that addresses the needs of the local community in Ghana, but one that RTA can also extrapolate to other operational regions that require complex development plans. Essentially, the concept of sustainable ethics lies on one fundamental principle: without ensuring that ethical practices are sustainable, at some point in time ethical behaviour will undoubtedly be compromised. Applying our model to their operations

3 worldwide will enable RTA to continue in their pursuit for sustainability, while staying true to their recognition of their ethical obligations towards local community development.