UNIT 2
Management of Ethics
Management of Ethics
Organizational ethics is the ethics of an organization, and it is how an organization responds to an internal or external stimulus. Organizational ethics is interdependent with the organizational culture. Although, it is akin to both organizational behavior (OB) and industrial and organizational psychology as well as business ethics on the micro and macro levels, organizational ethics is neither OB or I/O psychology, nor is it solely business ethics (which includes corporate governance and corporate ethics). Organizational ethics express the values of an organization to its employees and/or other entities irrespective of governmental and/or regulatory laws.
The Foreign Corrupt Practices Act (FCPA) restricts the United States business firms from engaging in bribery and other illegal practices internationally. There are laws that have the same type of prohibition for European companies which create a disadvantage competitively for both European and U.S. firms. Such laws are not a restricting element to organizations that have highly elevated ethical behavior as part of their values.Organizations that lack ethical practices as a mandatory basis of their business structure and corporate culture, have commonly been found to fail due to the absence of business ethics. Corporate downfalls would include, but are not limited to, the recent Enron and WorldCom scandals, are two primary examples of unethical business practices concerning questionable accounting transactions.
Employees,the community, and corresponding industries. Ethical business practices of organizations has resulted in a solid financial bottom-line. This has been seen through greater sales and increased revenue by companies retaining talented personnel and attracting newly skilled employees. More importantly, an ethical organization will have the ability to retain employees that are experienced and knowledgeable (generally referred to as human capital). This human capital results in less employee turnover, less training time for new employees, and greater output regarding services (or production of goods)
Ethics Analysis (Hosmer Model)
The view is that a manager should always act in accordance with either a single principle of behavior or a single statement of belief that is "right" and "proper" and "just" in and by itself. This is "moral reasoning": logically working from a first principle through to a decision on the duties we owe to others.
7 HOSMER’S PRINCIPLE OF ETHICAL DECISION MAKING
1) Principle of Long-term self-interest
Never take any action not in your organization's long-term self-interest
2) Principle of Personal Virtue
Never do anything that is not honest, open, and truthful and that you would never be glad to see reported in the newspapers or on TV
3) Principle of Religious injunction
Never take any action that is not kind and that does not build a sense of community.
4) Principle of Government Requirements
Never take any action that violates the law, for the law represents the minimal moral standard
5) Principle of Utilitarian benefit
Never take any action that does not result in greater good for society
6) Principle of Individual rights
Never take any actions that infringes on others agreed-upon rights
7) Principle of Distributive Justice
Never take any action that harms the least among us: the poor, the uneducated, the unemployed
Ethical dilemma:
An ethical dilemma (moral dilemma) is a problem in the decision-making process between two possible options, neither of which is absolutely acceptable from an ethical perspective. Ethical dilemmas can be solved in various ways, for example by showing that the claimed situation is only apparent and does not really exist, or that the solution to the ethical dilemma involves choosing the greater good and lesser evil, or that the whole framing of the problem omits creative alternatives that situational ethics or situated ethics must apply because the case cannot be removed from context and still be understood.
A popular ethical conflict is that between an imperative or injunction not to steal and one to care for a family that you cannot afford to feed without stolen money. Debates on this often revolve around the availability of alternate means of income or support such as a social safety net, charity, etc. The debate is in its starkest form when framed as stealing food. Under an ethical system in which stealing is always wrong and letting one's family die from starvation is always wrong, a person in such a situation would be forced to commit one wrong to avoid committing another, and be in constant conflict with those whose view of the acts varied
However, there are no legitimate ethical systems in which stealing is more wrong than letting one's family die. Ethical systems do in fact allow for, and sometimes outline, trade-offs or priorities in decisions. Resolving ethical dilemmas is rarely simple or clear cut and very often involves revisiting similar dilemmas that recur within societies.
How to solve an ethical dilemma
The biggest challenge of an ethical dilemma is that it does not offer a solution that would comply with ethical norms. Throughout the history of humanity, people have faced such dilemmas and philosophers aimed and worked to find solution
The following approaches to solve an ethical dilemma were deducted:
1) Refute the paradox (dilemma): The situation must be carefully analysed. In some cases, the existence of the dilemma can be logically refuted.
2) Value theory approach: Choose the alternative that offers the greater good or the lesser evil.
3) Find alternative solutions: In some cases, the problem can be reconsidered and new alternative solutions may arise.
Ethics in practice- ethics for managers
1) Human dignity, human rights and justice, which refers to the duty to promote universal respect for the human person. In the context of fisheries, this principle relates, for example, to fishers' self-determination, access to fishing resources and the right to food. It is best represented by a rights-based approach in ethics that emphasizes the protection of the personal domain of each individual. It may require, however, the establishment of individual or community rights, the exact nature of which will depend on local conditions
2) Beneficence, which concerns human welfare, reducing the harms and optimizing the benefits of social practices. In the context of fisheries, this principle needs to be observed when the effects of policies and practices upon the livelihoods of fishing communities are evaluated. The principle relates to working conditions (safety on board), as well as food quality and safety. The issue of genetically modified organisms should also be addressed in this context (FAO, 2001b). This principle invites an ethical approach to fisheries that puts consequences to general welfare in focus.
3) Cultural diversity, pluralism and tolerance, which relates to the need to take different value systems into account within the limits of other moral principles. The pressing moral issues in fisheries take different shapes across different cultures, and it is an important moral demand that people themselves define how their interests are best served in a particular cultural setting. This principle squares well with dialogical ethics, which stresses the actual participation of those concerned.
4) Solidarity, equity and cooperation, which refers to the importance of collaborative action, sharing scientific and other forms of knowledge, and non-discrimination. In the context of fisheries, this principle underpins the moral imperative to eradicate poverty in developing countries and ensure equity within fisheries and between sectors. It also requires transparent policies and stresses the need to reduce the gap between producers and consumers. This principle is relevant at the level of policy as well as at the individual level of virtues and professional duties to further trust and tolerance among stakeholders.
5) Responsibility for the biosphere, which concerns the interconnections of all life forms and the protection of biodiversity. This principle stresses that ecosystem well-being is a sine qua non condition of sustainable fisheries providing for the needs of future generations, as well as for the lives of those who currently rely on the natural environment and are responsible for its use. This principle combines ethical reasoning based on rights and on consequences for human welfare, as well as on individual virtues and duties to respect the environment.
Ethics for manager:
In a broad construction of the ethical role of the manager, managing and leading can be said to be inherently ethics-laden tasks because every managerial decision affects either people or the natural environment in some way—and those effects or impacts need to be taken into consideration as decisions are made. A narrower construction of the ethical role of the manager is that managers should serve only the interests of the shareholder; that is, their sole ethical task is to meet the fiduciary obligation to maximize shareholder wealth that is embedded in the law, predominantly that of the United States, although this point of view is increasingly accepted in other parts of the world. Even in this narrow view, however, although not always recognized explicitly, ethics are at the core of management practice.
The ethical role of managers is broadened beyond fiduciary responsibility when consideration is given to the multiple stakeholders who constitute the organization being managed and to nature, on which human civilization depends for its survival. Business decisions affect both stakeholders and nature; therefore, a logical conclusion is that those decisions have ethical content inherently and that managerial decisions, behaviors, and actions are therefore inherently ethical in nature. Whenever there are impacts due to a decision, behavior, or action that a leader or manager makes, there are ethical aspects to that decision or situation. While some skeptics claim that business ethics is an oxymoron, the reality is that decisions and actions have consequences, and that reality implies some degree of ethics, high or low. Thus, ethics and the managerial role cannot realistically be teased apart.
Role and function of ethical managers- the Comparative ethical behaviour of managers
The role managers must play in implementing internal ethical standards and aligning the organization with external standards-
How to be an ethical manager-
Ethical managers are those who continuously practice the following behaviors. Remaining committed to honesty, fairness, and excellent work ethics. Valuing employees as individuals as well as workers. Knowing that how objectives are met is just as important as meeting objectives. Modeling ethical behavior like not shifting blame, not playing favorites, and not trying to outdo the deeds of others. Looking out for others, and always taking their interests and needs into account.
Managers and Ethics in Organizations-
Many managers find it difficult to speak about and sometimes even recognize ethical issues, a difficulty that the management theorists James Waters and Frederick Bird called the moral muteness of managers. Recognizing that management is an inherently ethical task and that the practices of the company embody a set of values or ethics, the management scholar Jeanne Liedtka suggests that there does exist a set of ethically based management practices that can help managers lead their companies effectively and so that they are competitive. By examining numerous organizational improvement initiatives, she determined that they shared common practices and common sets of values that could help an organization achieve its goals most effectively.
The ethics of effective and competitive business practices identified by Jeanne Liedtka include creating a shared sense of meaning, vision, and purpose that connect the employees to the organization and are underpinned by valuing the community without subordinating the individual and seeing the community's purpose as flowing from the individuals involved. A second characteristic that ethical leadership can provide is developing in employees a systems perspective, which is linked to the post conventional stages of cognitive and moral reasoning discussed above, so that a value of serving other community members and related entities in the broader ecosystem emerges. Another theme is that of emphasizing business processes rather than hierarchy and structure, which is based on valuing work itself intrinsically and focusing on both ends and means in decision making, not just the ends. Localized decision making, particularly around work processes, provides a value of responsibility for individual actions, and using information within the system is supported by values of truth telling, integrity, and honesty, the characteristics of moral persons, as well as transparency about and access to needed information.
Code of ethics-
A code of ethics is a guide of principles designed to help professionals conduct business honestly and with integrity.
Compliance-based codes of ethics
Compliance-based codes of ethics not only set guidelines for conduct but also determine penalties for violations.
This type of code of ethics is based on clear-cut rules and well-defined consequences rather than individual monitoring of personal behavior
Value Base Code of Ethics
A value-based code of ethics addresses a company's core value system.
Value-based ethical codes may require a greater degree of self-regulation than compliance-based codes.
Competitiveness
Any organization, public or private, large or small, faces internal and external uncertainties that affect its ability to achieve its objectives. The effect of uncertainty on an organization's objectives is "risk." Risk management, commonly known in the business community as enterprise risk management (ERM), can provide for the structured and explicit consideration of all forms of uncertainty in making any decision. The overarching principle of ERM is that it must produce value for the organization. It is the culture, processes and structures that is directed towards taking advantage of potential opportunities while managing potential adverse effects
Corporations face the task of managing their risk exposures while remaining profitable and competitive at the same time. Managing risks is not a new challenge, yet it may get overlooked due to several reasons. The challenges and demands of contemporary markets, customer expectations, regulatory authorities, employees and shareholders present organizations with an interesting array of contradictions
Risk management can enhance the environment for identifying and capitalizing on opportunities to create value and protect established value. Efficient managers who undertake risk, use a variety of risk management solutions that transcends through traditional insurance risk transfer products.
Risk basically refers to the variations in the outcomes that could occur over a specified period in a given situation. If only one outcome is possible, the variation and hence the risk is zero. If many outcomes are possible, the risk is not zero. The greater the variation, the greater the risk. Risk may also be defined as the possibility that an event will occur and adversely affect the achievement of the Company's objectives and goals. A business risk is the threat that an event or action will adversely affect an organization‘s ability to achieve its business objectives/targets.
Risks may be broadly classified under the following heads:
(a) Industry & Services Risks:
These risks can be broadly categorized as follows, namely:
1) Economic risks such as dependence on one product, one process, one client, one industry, etc. in the short and long term.
2) Services risks
3) Market structure
→ Business dynamics
4) Competition risks affecting tariffs prices, costs, revenues and customer preferences
5) Customer relations risks
6) Reputational risk
(b) Management and Operations Risks:
These risks relate broadly to the company's organisation and management such as planning, monitoring, and reporting systems in the day to day management process namely:
1) Risks to Property
2) Clear and well defined work processes
3) Changes in Technology/upgradation
4) R&D risks
5) Agency Network Risks
6) Personnel risks such as labour turnover risks involving replacement risks, training risks, cost risks, skill risks etc. There are also unrest risks due to strikes and lockouts. These risks affect the company's business and earnings.
7) Environmental and Pollution Control regulations, etc.
8) Locational benefits near metros, railway stations, ports, cities, etc.
(c) Market Risks:
These risks relate to market conditions namely:
1) Raw material rates
2) Quantities, quality, suppliers, lead time, interest rates risks and forex risks namely, fluctuation risks and interest rate risk in respect of foreign exchange transactions.
(d) Political Risks:
These risks relate to political uncertainties namely:
1) Elections
2) War risks
3) Country/Area risks
4) Insurance risks like fire, strikes, riots and civil commotion, marine risks, cargo risks, etc.
5) Fiscal/Monetary Policy Risks including Taxation risks.
(e) Credit Risks:
These risks relate to commercial operations namely:
1) Creditworthiness risks
2) Risks in settlement of dues by clients
3) Provisions for doubtful and bad debts
(f) Liquidity Risks:
These are financial risk factors namely:
1) Financial solvency and liquidity risks
2) Borrowing limits, delays
3) Cash/Reserve management risks
4) Tax risks.
(g) Disaster Risks:
These risks relate to disasters from following factors:
1) Natural risks like fires, floods, earthquakes, etc.
2) Man-made risks arising under the Factories Act, Mines Act, etc.
3) Risk of failure of effective Disaster Management plans formulated by the company.
(h) Systems Risks:
These risks relate to the company's systems namely:
1) System capacities
2) System reliability
3) Obsolescence risks
4) Data Integrity risks
Organizational size-
An organization's structure is important to the study of business ethics. In a Centralized organization, decision-making authority is concentrated in the hands of top- level managers, and little authority is delegated to lower levels. Responsibility, both internal and external, rests with top management. This structure is especially suited for organizations that make high-risk decisions and whose lower- level managers are not highly skilled in decision making. It is also suitable for organizations in which production processes are routine and efficiency is of primary importance.
These organizations are usually extremely bureaucratic, and the division of labour is typically very well defined. Each worker knows his or her job and what is specifically expected, and each has a clear understanding of how to carry out assigned tasks. Centralized organizations stress formal rules, policies, and procedures, backed up with elaborate control systems. Their codes of ethics may specify the techniques to be used for decision making
Because of their top-down approach and the distance between employee and decision maker, centralized organizational structures can lead to unethical acts. If the centralized organization is very bureaucratic, some employees may behave according to "the letter of the law" rather than the spirit.
In a decentralized organization, decision-making authority is delegated as far down the chain of command as possible. Such organizations have relatively few formal rules, and coordination and control are usually informal and personal. They focus instead on increasing the flow of information. As a result, one of the main strengths of decentralized organizations is their adaptability and early recognition of external change. With greater flexibility, managers can react quickly to changes in their ethical environment
Weakness of decentralized organizations is the difficulty they have in responding quickly to changes in policy and procedures established by top management. In addition, independent profit centers within a decentralized organization may deviate from organizational objectives.
Profitability and ethics-
In the fallout from Enron and others, many investors are paying closer attention to a company's ethics, as well as their profits. These investors realize that a corporate focus on profits alone with little regard to ethical standards, conduct and enforcement—may result in short-term revenue gain, but long-term profitability may be limited. In cases like Enron, long-term viability is limited too.
Consider this balance between profits and ethics to be "ethical profitability." Well-balanced companies not only consistently reward owners, investors and employees with profitable performance, they also genuinely focus on these five key areas:
1) Leadership by example
The chasm between managing and managing well is wide and deep. To manage is to merely lead employees. To manage well is to lead employees effectively, ethically and without arrogance. Company owners, executives and managers must set the highest examples of attitude and conduct for their employees. "Do what I say, not what I do," is a parental anachronism with no value in management.
2) Company-wide ethical awareness
Most employees, when not at work, practice personal ethics in areas such as caring for others, being kind and honest, and not harming others. In-the-office ethical behavior includes demonstrating trustworthiness to managers and coworkers, respecting privacy and avoiding conflicts of interest. Ethics knows no time clock.
Occasional classes can help, by reminding employees of the simplicity of determining ethical behavior. In a nutshell, examine questionable action and speech, and determine if it's harmful to yourself or another. If it is, avoid that behavior. Employees with any sort of religious background will recognize this ethic of reciprocity as familiar. The Bible's Golden Rule is a good example
3) Strong management of revenue generation and reporting
Corporate temptation to stretch ethical behavior in revenue generation and reporting is universal. From excessive cost-cutting to expand short-term market-share, to outright lies about revenue to positively affect stock price, it's easy to see why an otherwise intelligent, educated corporate officer can end up behind bars for condoning such behavior. To overcome these temptations, revenue-related managers must establish and maintain a firm stance on ethical marketing, advertising, selling and reporting. This requires regular dissemination and enforcement of codes of conduct.
4) High level of internal trust
The level of trust within a company should reflect the level of trust the company solicits from customers. If customers are encouraged to put their complete trust in the product or service, then company teams must do the same with each other. Management must guide this internal process. An increase in trust is a reduction in risk and uncertainty, which in turn will keep the revenue generation process flowing smoothly. Another advantage of running a high-trust organization is improved internal flexibility and creativity. Instead of being constantly monitored, the person to whom a task is assigned can accomplish it the best way possible. The outcome is never in doubt because of the trust the team shares.
5) Formal and active compliance program
Ethical profitability is far more than merely operating within the boundaries of the law. Legal compliance limits unethical behavior, but it does not define ethical behavior. An organizational ethics doctrine does have legal benefits. Properly written, published and disseminated ethical codes will reduce corporate risk if an employee creates a criminal or civil problem because of poor ethical behavior. (Even federal sentencing guidelines recommend lower fines if such violations occur contrary to the existence and enforcement of compliance codes.)
The true test of ethical profitability is whether or not the company is a positive example to its employees, to its customers and even to other companies. Such companies practice the truest form of leadership-by-example.
Cost of ethics in Corporate ethics evaluation
Operating in an ethical way may incur additional costs to a business when compared with other retailers and companies who may not do business in the same way. For example, Primark bears the cost of carrying out all audits. Then there are its costs associated with working with ethical partners.
Cost-benefit analysis (CBA) involves the practical application of modern welfare economics to public policy. It aims to account for the positive and negative consequences (benefits and costs) of economic activities by converting them into monetary flow to determine which activity yields the greatest gain for society. The focus is on cost-benefit analysis as applied to environmental, safety, and health regulation.
Issues that limit with pricing decisions
1) Unfair trade practices
a) Laws that prohibit wholesalers and retailers from selling below cost.
2) Price Fixing
a) Price Fixing An agreement between business competitors to sell the same product or service at the same price.
3) Price Discrimination
a) A seller price discriminates when it charges different prices to different buyers. The Legality and Ethics of Price Strategy
Transparency in business-
Transparency is an important part of this process. Transparency means the business is open to people seeing how it manages its relationships with suppliers. In turn, suppliers‖ practices also need to be transparent. The alternative would be for an organization to ignore ethical behaviour. However, this would rapidly lead to a decline in brand reputation and consumers could move to purchasing from competing retailers behaving more ethically. Operating in the 'right way' is therefore not just appropriate for ethical reasons, but is also good business practice.
ETHICS EVALUATION
Ethical — Evaluation should not reflect personal or sectoral interests.
Evaluators must have professional integrity, respect the rights of institutions and individuals to provide information in confidence, and be sensitive to the beliefs and customs of local social and cultural environments.
When considering an ethical issues it is advised that you follow a stepwise approach in your decision-making process-
a) Recognize there is an issue.
b) Identify the problem and who is involved.
c) Consider the relevant facts, laws and principles.
d) Analyze and determine possible courses of action.
e) Implement the solution.
f) Evaluate and follow up.
Key takeaways –
A satellite picture, taken in 2004, shows thick haze and smoke along the Ganges Basin in northern India. Major sources of aerosols in this area are believed to be smoke from biomass burning in the northwest part of India, and air pollution from large cities in northern India. Dust from deserts in Pakistan and the Middle East may also contribute to the mix of aerosols.
There are many environmental issues in India. Air pollution, water pollution, garbage, and pollution of the natural environment are all challenges for India. The situation was worse between 1947 through 1995. According to data collection and environment assessment studies of World Bank experts, between 1995 through 2010, India has made one of the fastest progresses in the world, in addressing its environmental issues and improving its environmental quality. Still, India has a long way to go to reach environmental quality similar to those enjoyed in de veloped economies. Pollution remains a major challenge and opportunity for India.
Environmental issues are one of the primary causes of disease, health issues and long term livelihood impact for India.
Major issues-
Floods are a significant environmental issue for India. It causes soil erosion, destruction of wetlands and wide migration of solid wastes
Major environmental issues are forest and agricultural degradation of land, resource depletion (water, mineral, forest, sand, rocks etc.), environmental degradation, public health, loss of biodiversity, loss of resilience in ecosystems, livelihood security for the poor.
The major sources of pollution in India include the rampant burning of fuel wood and biomass such as dried waste from livestock as the primary source of energy, lack of organized garbage and waste removal services, lack of sewage treatment operations, lack of flood control and monsoon water drainage system, diversion of consumer waste into rivers, cremation practices near major rivers, government mandated protection of highly polluting old public transport, and continued operation by Indian government of government owned, high emission plants built between 1950 to 1980.
Air pollution, poor management of waste, growing water scarcity, falling groundwater tables, water pollution, preservation and quality of forests, biodiversity loss, and land/soil degradation are some of the major environmental issues India faces today. India's population growth adds pressure to environmental issues and its resources.
Population growth and environmental quality-
There is a long history of study and debate about the interactions between population growth and the environment. According to a British thinker Malthus, for example, a growing population exerts pressure on agricultural land, causing environmental degradation, and forcing the cultivation of land of poorer as well as poorer quality. This environmental degradation ultimately reduces agricultural yields and food availability, causes famines and diseases and death, thereby reducing the rate of population growth.
Population growth, because it can place increased pressure on the assimilative capacity of the environment, is also seen as a major cause of air, water, and solid-waste pollution. The result, Malthus theorized, is an equilibrium population that enjoys low levels of both income and environmental quality. Malthus suggested positive and preventative forced control of human population, along with abolition of poor laws.
Malthus theory, published between 1798 and 1826, has been analyzed and criticized ever since. The American thinker Henry George, for example, observed with his characteristic piquancy in dismissing Malthus: "Both the jay hawk and the man eat chickens; but the more Jayhawks, the fewer chickens, while the more men, the more chickens." Similarly, the American economist Julian Lincoln Simon criticized Malthus's theory. He noted that the facts of human history have proven the predictions of Malthus and of the Neo-Malthusians to be flawed. Massive geometric population growth in the 20th century did not result in a Malthusian catastrophe. The possible reasons include: increase in human knowledge, rapid increases in productivity, innovation and application of knowledge, general improvements in farming methods (industrial agriculture), mechanization of work (tractors), the introduction of high-yield varieties of wheat and other plants (Green Revolution), the use of pesticides to control crop pests.
More recent scholarly articles concede that whilst there is no question that population growth may contribute to environmental degradation, its effects can be modified by economic growth and modern technology. Research in environmental economics has uncovered a relationship between environmental quality, measured by ambient concentrations of air pollutants and per capita income. This so-called environmental Kuznets curve shows environmental quality worsening up until about $5,000 of per capita income on purchasing parity basis, and improving thereafter. The key requirement, for this to be true, is continued adoption of technology and scientific management of resources, continued increases in productivity in every economic sector, entrepreneurial innovation and economic expansion.
Case study
VISAKHAPATNAM GAS LEAK CASE STUDY
A gas leak has affected five villages in Visakhapatnam in Andhra Pradesh.
1) The source of the gas leak was a styrene plant owned by South Korean electronics giant LG located in the area.
2) The possible reason for gas leak is stagnation and changes in temperature inside the storage tank that could have resulted in auto polymerization (chemical reaction) and vapourisation of the styrene.
Styrene-
a) Description: Styrene is an organic compound with the formula C8H8.
b) It is a derivative of benzene (C6H6).
c) It is stored in factories as a liquid, but evaporates easily, and has to be kept at temperatures under 20°C.
d) Sources: Styrene is found in vehicle exhaust, cigarette smoke, and in natural foods like fruits and vegetables.
e) Uses: It is a flammable liquid that is used in the manufacturing of polystyrene plastics, fiberglass, rubber, and latex.
f) Risk of Exposure: Short Term Exposure: It can result in respiratory problems, irritation in the eyes, irritation in the mucous membrane, and gastrointestinal issues.
1) According to the National Disaster Management Authority (NDMA), in the recent past, over 130 significant chemical accidents have been reported in the country.
2) Further, there are thousands of registered hazardous factories and unorganised sectors dealing with numerous ranges of hazardous material posing serious and complex levels of disaster risks.
Laws to Protect Against Chemical Disasters in India-
Laws Before and During Bhopal Gas Tragedy (1984): At the time of the Bhopal gas tragedy, the Indian Penal Code (IPC) was the only relevant law specifying criminal liability for such incidents.
Laws After Bhopal Gas Tragedy (1984): Bhopal Gas Leak (Processing of Claims) Act, 1985 : It gives powers to the central government to secure the claims arising out of or connected with the Bhopal gas tragedy.Under the provisions of this Act, such claims are dealt with speedily and equitably.
The Environment Protection Act, 1986: It gives powers to the central government to undertake measures for improving the environment and set standards and inspect industrial units
The Public Liability Insurance Act, 1991: It is an insurance meant to provide relief to persons affected by accidents that occur while handling hazardous substances
The National Environment Appellate Authority Act, 1997: Under this Act, the National Environment Appellate Authority can hear appeals regarding the restriction of areas in which any industries, operations or processes or class of industries shall not be carried out or shall be carried out subject to certain safeguards under the Environment (Protection) Act, 1986.
National Green Tribunal, 2010: It provided for the establishment of the National Green Tribunal for effective and expeditious disposal of cases related to environmental protection and conservation of forests
According to PRS legislative, any incident similar to the Bhopal gas tragedy will be tried in the National Green Tribunal and most likely under the provisions of the Environment (Protection) Act, 1986.
If an offence is committed by a company then every person directly in charge and responsible will be deemed guilty, unless he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such an offence.
Key takeaways - Air pollution, water pollution, garbage domestically prohibited goods and pollution of the natural environment are all challenges for India.
Sources-
1) Business Ethics and Corporate Governance: B.N.Gosh, TMH.
2) Governance & Business Ethics: Bimal Jaiswal & Deepak Verma.
