Law and Ethics

This paper presents a discussion regarding various issues of law, ethics, and corporate governance concerning PharmaCARE’s activities. The company ranks among the most successful pharmaceutical companies across the globe. It also enjoys a reputation of being a caring, well-run, and ethical company. PharmaCARE produces high-quality products intended to enhance the quality of life and save millions of people from health-related problems. It is further reported that the company offers free and discounted drugs to low-income customers. Besides, it operates a foundation that sponsors healthcare educational programs and scholarships.

PharmaCARE recently launched a program We CARE about Your World, pledging its commitment to the environment through initiatives that reduce environmental pollution. However, the company is said to be behind all the lobbying that prevented passing of environmental conservation laws in the past. Some of them include extension of the Superfund Tax, Compensation, and Liability Act. The company’s operation activities in Colberia also are contrary to fair environmental practices of conservation and sustainability. The residents are exploited in the name of being employed. They work for $1.00 a day, forced to carry heavy luggage and walk for long distances as they deliver supplies to the company. The population in Colberia is said to live in abject poverty. Notwithstanding the deplorable conditions of the natives, the executives of PharmaCARE live in luxurious compounds with golf courses, swimming pools and other amenities.

1. A stakeholder is a person or party who could be affected by activities of another (Lane, 2013). They gain or lose something depending on the outcome of the operations of a particular party. In this case, PharmaCARE has a duty to care for various parties who have an interest in its activities. These are its stakeholders. They include its customers or those who purchase products from the company outlets, its external environment including the residents of Colberia, and its employees. Customers rely on the company’s products as they use them to treat ailments. The produced drugs should be of appropriate quality in order to meet customer expectations. The locals of Colberia have a stake in the activities of the company too. Production operations that contribute to environmental degradation lead to harmful health and economic consequences to the populace. The employees of the company would benefit from sustainable and fair working conditions and remuneration.

2. Several human rights issues arise in the treatment of Colberia indigenous residents by PharmaCARE. The company merely exploits the residents. Those who offer their services of labor to the organization are paid $1.00 per day as remuneration. The workers walk long distances through the jungle to harvest plants. It is said to be a distance of approximately 5 miles. The luggage they carry during those journeys weighs 50 pounds. The combination of the three presented facts indicates flagrant injustice experienced by the innocent citizens of Colberia. The living conditions in Colberia are deplorable; there is no electricity and no running water. In sharp contrast, the executives of PharmaCARE live in fully serviced luxurious homes. The company’s extensive activities in the region are also said to have destroyed the habitat and endangered native species.

The above scenario represents a case of negligence from the pharmaceutical company. The rights of the indigenous population have been violated. To address the foregoing, PharmaCARE is advised to implement the following in a bid to have ethical practices. In the first place, the company should pay fair compensation in wages and salaries for the services of labor provided by the indigenous people. The company should also initiate operations that take into consideration environmental conservation efforts. Lastly, corporate social responsibility should be embraced. PharmaCARE can afford to supply the area with water and electricity as an activity aimed at enhancing the lives of the Colberia residents.

3. PharmaCARE’s environmental initiatives include a pledge to commitment towards environmental conservation through recycling, packaging changes and other green initiatives. The commitment on paper seems to be a noble idea. It is commendable that the company realizes the need to conserve the environment. Where the efforts as presented are implemented, the community would gain collectively. The welfare of the society improves with reduced pollution (Lane, 2013). A good rapport between the company and its external environment would also lower the chances of the former being exposed to legal disputes with other parties.

The above presented initiatives seem to be just a public relations exercise. PharmaCARE does not practice what it says are its commitments. Due to the company’s influence, it has successfully lobbied for the failure in several environmental laws and regulations being passed. Its activities in Colberia have promoted the degradation of the environment. They have destroyed the habitat and endangered the indigenous species. Such is disappointing given that the CEO of the pharmaceutical company sits on the PhRMA board.

PharmaCARE’s aim is to depict itself as an ethical company when it does not act ethically. It seeks to gain profits without any due regard to the welfare of the local communities. Such a strategy is intended to defeat justice. In good corporate governance, such a position compromises ethical considerations involved. The plight of other stakeholders is sacrificed for the selfish gain of the few. PharmaCARE ought to embrace ethics and good corporate governance in its quest to offer drugs all across the globe.

4. In this chapter, the ethics of PharmaCARE’s actions with respect to the Colberian people are discussed. The analysis is done based on the following ethical theories: utilitarianism, deontology, virtue ethics, and ethics of care. Utilitarianism is a theory that holds that identifying an act as being right or wrong is based on the utility gained by the greatest number of people where negative effects are minimized. The activities of PharmaCARE benefit only a few owners. The majority of Colberian people suffer. Based on this theory, the activities of the company are unethical.

Deontology is another theory of normative ethics. An action is judged as being ethical or contrary based on adherence to laid down laws and regulations (Harris, 2010). PharmaCARE is said to have influenced the failure in passing of environmental laws. Nowhere has it been reported that the company failed to adhere to the established procedures of law. Based on this normative theory, the actions of PharmaCARE would be considered ethical.

Virtue ethics holds that an individual’s character plays a role in the determination of ethical actions or unethical behaviors. The company portrays itself as being sensitive to the needs of the community through its initiatives for environmental conservation. However, the Colberian habitat is said to have been destroyed by the activities of PharmaCARE. Therefore, based on the theory, its actions are unethical.

Ethics of care is another theory concerned with identifying actions as either being ethical or unethical. It places emphasis on the kind of response that is undertaken in a bid to cope with a crisis (Mill,2009). In the case of PharmaCARE and the residents of Colberia, despite the suffering of the latter, the company has neglected them and instead enhanced their efforts of exploitation. In normal circumstances, it is expected that the company would take reasonable steps to address the plight of such external environment. Based on the theory, the actions of PharmaCARE are considered unethical.

There is no doubt that the company exploits the residents of Colberia. They are paid meager wages and forced to walk long distances carrying heavy supplies. These are huge human rights violations. The living conditions are unfit for human habitation. The habitat is also degraded and native species are endangered. These actions are an injustice to the Colberian people. Such unfair practices are understood to be unethical.

5. In this chapter, the actions of PharmaCARE are compared and contrasted with those of another company whose corporate activities led to environmental/workplace safety issues, ethical issues and financial losses. The other company that has been selected for comparison is BP. It extracts, processes, refines and sells petroleum products. In April 2010, a wellhead blowout occurred on the Deepwater Horizon oil drilling platform in the Gulf of Mexico. BP indicated that the spill would have minimal impact. However, it turned out to be the greatest in the history of the United States of America. Several questions have remained unanswered. Surprisingly, the extent of the spill remains unclear. BP by then refused to allow the media and independent experts to access the site to assess the effects of the spill.

Based on the events surrounding the oil spill, legal questions concerning the rights of wildlife and aquatic life arise. There are also many parties whose livelihood depends on the life in the coastline. How would their rights be considered? How about the destruction of the ecosystem? The actions of BP in response to the crisis bring out certain ethical issues in their corporate governance. Denying the media and independent experts the access required to gauge the extent of the spill illuminates the unethical decisions that the company took. Below is a discussion on the similarities and differences between BP and PharmaCARE.

Both companies seem to be keen on maintaining a favorable public image. They deny any accusations of breach of duty of care to the society. They refuse to allow an objective analysis of the true state of affairs that pertains to their operations. Both companies strive to maintain their profit streams or even scale them to higher levels. Nonetheless, there are differences between the two companies. While BP is involved in oil and petroleum processing, PharmaCARE deals with drugs (Mill, 2009). The case involving the former was an instance that can be assumed an ‘accident’ while the other case entails a continuous exercise where the rights of the indigenous community are constantly infringed. The activities of both companies have a negative impact on their operations.

Operations that cause environmental degradation would face opposition from various quarters. Stakeholders would abstain from trading or partnering with such entities, which would result in lower revenues accrued by the companies. Ethics, law and good corporate governance are important aspects for success of a corporate body’s operations. A balanced undertaking of social corporate responsibility serves to enhance the welfare of the society and improves the rapport between the company and society. Compliance to the law minimizes the prospects or instances where the company would be in disputes with the authorities (Harris, 2010). Fewer resources would be used to fend off legal challenges. Therefore, embracing ethics, legal considerations, and good corporate governance would improve the environment for undertaking business operations.

References

Harris, S. (2010). The moral landscape: How science can determine human values. New York, NY: Free Press.

Lane, S. (2013). American privacy: The 400-year history of our most contested right. Boston, MA: Beacon Press.

Mill, J. (2009). Utilitarianism. London: Oxford University Press.