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GSOE9510-无代写
时间：2024-04-01
Never Stand Still Faculty of Engineering School of Electrical Engineering and Telecommunications
GSOE9510 STRATEGIC
LEADERSHIP AND ETHICS
Topics:
• Global Issues: Multinational Companies
• International Perspectives
• Australian Context
Ethics lecture slides based on slides of Prof. Prof.
K.M. Passino , Ohio State University
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• Global issues:
– World-wide impacts (the world is shrinking)
– Long time periods (we are learning about this)
– Cross-cultural, multi-national (real impacts; is
doing engineering the same here as
everywhere else?)
• Relevance to engineering?
– Broad thinking in engineering design
process is essential!
– Engineering is naturally cross-cultural
– Globalization is happening!
– Impact on engineering profession is unfolding
What are “global issues”?
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• Technology transfer: “moving technology
to a new location and implementing it
there” (hardware or software)
• Engineers need to be “cross-cultural social
experimenters”
• Appropriate technology: “identification,
transfer, and implementation of the most
suitable technology” (social, cultural, value
factors play a key role)
Multinational corporations
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• Scale (too big, start small...)
• Technical/managerial skills (e.g., for
safety).
• Bhopal disaster
• Materials and energy (availability, cost)
• Physical environment (temperature,
humidity, salinity, water)
• Human values (acceptability to end users)
• Sustainable development
• Impact on local jobs and economy
Appropriate technology
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• Week 1 – (slide 58)
• Union Carbide, based in US, operated in 37 host
countries
• Dec. 3, 1984, a leak and overheating in a storage
tank methyl isocyanate (MIC) used in agricultural
pesticide, in Bhopal, India (pop: 900,000)
• Plant was operated UCIL – 50.9% owned by UC
• MIC burns any moist part of the body, scalding
throats, nasal passages, blinding eyes and
destroying lungs
• Within an hour the leak exploded in a gush that
sent 40 tons of MIC into the atmosphere
• One of he worst industrial accident in history!
Revisiting Bhopal Disaster
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Laying the Groundwork for a
Disaster
• Consequence of the financial ill health of the Bhopal
plant was that operating staff was cut to a minimum,
training programs were reduced, and equipment was
allowed to deteriorate
• Instrumentation at Bhopal was so unreliable that it was
common for gas leaks of various types to be detected by
workers reporting tearing and burning sensations in their eyes
• Report by UCC inspectors in 1982 indicated many
serious problems, but there was no follow-up inspection
to verify that these had been cleared up.
• reliance was placed on paper assurances that the observed
defects had been remedied
• system of pipes and valves at the plant was very complex, and
the valves were poorly marked
• Valve maintenance was minimal and failures common
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Safety - Watchdogs
• Where were the government officials whose
responsibility it was to safeguard worker and public
safety?
• Both national and state governments repeatedly overlooked
serious deficiencies at the facility
• People were permitted to live in the neighbourhood despite
the obvious potential for disaster
• Inspectors did not inspect, regulators failed to regulate
• Most of the engineers were mechanical engineers, not
knowledgeable about chemical processes.
• While the crisis was in full swing, the local government
did a poor job in assisting people to escape from the
afflicted area and in organizing medical treatment for
the victims
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500,000 persons exposed
• The toll
– 2500-3000 deaths within a few days
– 10,000 personally disabled
– 100,000-200,000 injured (exact figures disputed)
• Statics ten years later
– 12,000 death claims
– 870,000 personal injury claims
• 2001 victims/families received
compensation from Union Carbide of $600
each
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Observations (1)
• Greater sensitivity to social factors was needed in
transferring chemical technology
• Extent of disaster would have been lessened if Union
Carbide had used smaller tanks to store MIC (as required
in France)
• Govt of India required Bhopal to be operated entirely by
Indian workers
– Union Carbide in the beginning spent much training Indian
workers
– Union Carbide initially had U.S. engineers make site visits for
safety inspections
– BUT, in 1982, financial pressures led Union Carbide to relinquish
its supervision of safety at Bhopal
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Observations (2)
• In the following two years safety practices eroded
• High turnover of employees
• Failure to properly train new employees
• Low technical preparedness of the local labour pool
• Plant moved from US safety standards to lower Indian
standards
• By 1984, several extreme hazards, and many smaller
ones, were present
• Possible Lesson:
• Be very careful in dealing with transfer of dangerous
technologies to other countries.
• It requires years of diligence and financial commitment.
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Some Additional Facts
• Issue of the handling of MIC.
• The questions of how much MIC should be kept on hand
and how it should be stored ?
• Since it was a key factor in the production of Sevin,
manufacturing it in quantity and keeping large stocks on
hand was economically advantageous.
• However, due to its instability and toxicity, this was a
dangerous course of action, particularly where the
competence of the organization was questionable.
• This point is underscored in a post-accident affidavit filed
by Edward Munoz, an American who had previously been a
managing director of UCIL. He stated that UCIL had
opposed storing large quantities of MIC but had been
overruled by UCC.
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Questions (Legal)
• How should the victims of the catastrophe be
compensated?
• How should the blame be assigned?
• Legal
• The first issue that had to be resolved in the Bhopal case
was one of jurisdiction. The disaster occurred in India, but
the corporation involved, UCIL, is controlled by an
American company.
• Should the case be tried in India under Indian law or should
it be tried in the United States under American law?
• What is the engineer's role?
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• When we leave home and cross national
boundaries, moral clarity often blurs
• No shared attitudes, familiar laws and judicial procedures
that define standards of ethical conduct
• What are the principles that can help them work
through the maze of cultural differences and
establish codes of conduct for globally ethical
business practice? (Ethical leadership)
• How can companies answer the toughest question
in global business ethics
• What happens when a host country’s ethical standards
seem lower than the home country’s?
Mangers/Engineers moral
responsibilities at a global scale?
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What is Ethical Absolutism
• Ethical absolutism
• One detailed world-wide set of rules
• Concept that ethical rules are the same everywhere.
• Consider that the United Nations unanimously passed the
Universal Declaration of Human Rights, from which some
of those rights are:
• Everyone has the right to life, liberty, and security of person
• No one shall be held in slavery or servitude.
• No one shall be subjected to arbitrary arrest, detention, or exile.
• No one shall be arbitrarily deprived of his property.
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What is Ethical Absolutism
• Any system of ethical thought that focuses
strongly on one’s rights and duties is likely founded
upon the concept of ethical absolutism
• Many religions promulgate a set of “thou shalt not”
rules that do not allow for varying interpretations
under any circumstances - these rules are all based
on ethical absolutism
• Different cultural traditions must be respected
• People must express moral truth using only one
set of concepts
• Belief in a global standard of ethical behaviour
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Balancing the Extremes
• Companies must help managers distinguish
between practices that are merely different and
those that are wrong.
• Relativists:
• Nothing is sacred, and nothing is wrong.
• Absolutists:
• Many things that are different are wrong.
• Neither extreme illuminates the real world of
business decision making.
• The answer lies somewhere in between.
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Balancing the Extremes
Three Guiding Principles
• Three guiding principles:
• Respect for core human values, which
determine the absolute moral threshold for
all business activities
• Respect for local traditions
• Take context into account when deciding
what is right and what is wrong
• Other Principles
• Ethical responsibilities and obligations do not stop at a border
• Wherever engineers practice, they should protect the health,
safety, and welfare of the public!
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1. Right to freedom of physical movement
2. Right to ownership of property
3. Right to freedom from torture
4. Right to a fair trial
5. Right to nondiscriminatory treatment
6. Right to physical security
7. Right to freedom of speech and association
8. Right to minimal education
9. Right to political participation
10. Right to subsistence
Corresponding duties/obligations?
Example: Women
engineers’ rights and
nondiscrimination
Question: Does
Australia valways
follow these?
Any of them,
fully?
International Human Rights
(see also UN Universal Declaration on Human Rights)
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Cultural Relativism
• The view that ethical and social standards reflect the cultural
context from which they are derived from
• Cultural relativists uphold
• Cultures differ fundamentally from one another, and
• So do the moral frameworks that structure relations within different
societies.
• In international relations, cultural relativists determine
whether an action is 'right' or 'wrong' by evaluating it
according to the ethical standards of the society within which
the action occurs.
• There is a debate in the field on whether value judgements
can be made across cultures.
• Cultural relativism should not be confused with moral
relativism, which holds that moral absolutes guiding
individual behaviour do not exist as a matter of principle.
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Competing Answers
• If the people of Sri Lanka tolerate the bribery of
their public officials, so what?
• Their attitude is no better or worse than that of people in
Denmark or Singapore who refuse to offer or accept bribes.
• Belgians fail to find insider trading morally
repugnant, who cares?
• Not enforcing insider-trading laws is no more or less ethical
than enforcing such laws
*Values in Tension: Ethics Away from Home by Thomas Donaldson, HBR (From the
Magazine, 1996) (next few slides)
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• The cultural relativist’s creed
• When in Rome, do as the Romans do (“ethical
relativism”)
• Failing to do as the locals do means forfeiting
business opportunities
• Inadequacy of cultural relativism,
• when the practices in question are more
damaging than petty bribery or insider trading
Mangers/Engineers moral
responsibilities at a global scale?
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• Example: Statistics on Software Piracy (1996):
• In the United States, pirated software is estimated to be
35% of the total software market, and industry losses are
estimated at $2.3 billion per year. The piracy rate is 57% in
Germany and 80% in Italy and Japan; the rates in most
Asian countries are estimated to be nearly 100%.
• There are similar laws against software piracy in
those countries. What, then, accounts for the
differences?
• A country’s level of economic development
• Culture, including ethical attitudes, may be a more crucial
factor
Mangers/Engineers moral
responsibilities at a global scale?
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Consequences
• What happens if ethical attitudes around
the world permit large-scale software
piracy?
• Companies won’t want to invest as much in
developing new products, because they cannot
expect any return on their investment in certain
parts of the world.
• Ethics fail to support technological creativity,
there are consequences that go beyond statistics
• Jobs are lost and livelihoods jeopardized.
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Another Example
• A group of investors became interested in
restoring the SS United States, once a luxurious
ocean liner.
• Before the actual restoration could begin, the
ship had to be stripped of its asbestos lining.
• A bid from a U.S. company, based on U.S. standards
for asbestos removal, priced the job at more
than $100 million.
• A company in the Ukranian city of Sevastopol offered
to do the work for less than $2 million.
• The ship was towed to Sevastopol
• What is your opinion?
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Opposing Views
• Cultural Relativist
• Would have no problem – good deal.
• A country has the right to establish its own health and safety
regulations
• Ethical Absolutism
• The standards and the terms of the contract could not
possibly have protected workers in Sevastopol from known
health risks.
• Even if the contract met Ukranian standards, ethical
businesspeople must object.
• Cultural relativism is morally blind
• There are fundamental values that cross cultures, and
companies must uphold them
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AWB oil-for-wheat scandal
(Non Engineering)
• Involves the payment of kickbacks to the regime of Saddam Hussein
in contravention of the United Nations Oil-for-Food Humanitarian
Program
• AWB was the Australian Government entity operating a single desk
regime over Australian wheat (export monopoly for Australian wheat,
paid a single price)
• In the mid-2000s, it was found to have been, through middlemen,
paying kickbacks to the regime of Saddam Hussein, in exchange for
lucrative wheat contracts
• This was in direct contradiction of United Nations Sanctions, and of
Australian law
• AWB delivered 90% of the Iraqi wheat market, before its practices
were questioned in 2005
• The Australian Government also launched a Royal Commission
• Criminal proceedings commence against 12 people
• Ultimately, criminal charges were dropped by the Australian Federal Police
https://en.wikipedia.org/wiki/AWB_oil-for-wheat_scandal
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Analysis
• Example of how poor management of so-called
"soft" business ethics issues can rapidly translate
into hard outcomes for share owners.
• In 2006 AWB lost more than a third of its market
capitalisation
• May lose up to two-thirds of its value should it lose its
wheat export monopoly as a consequence of the massive
damage to reputation it has brought upon itself
• At the time, the scandal was described in dollar
terms as the biggest corruption of its kind in the
nation's history.
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Legal Implications
• The Supreme Court of Victoria has found that Trevor
Flugge, the former chairman and director of AWB
Limited (AWB)
• Breached his duties as a director by failing to make inquiries
and prevent conduct by AWB that contravened United
Nation’s sanctions.
• Despite court finding that Mr Flugge did not participate in, or did
not have any direct knowledge about, the contravening conduct
• The Court dismissed similar allegations against Mr
Geary, a former senior executive of AWB.
• When irregularities are, or should be, suspected,
directors have a duty to investigate.
• A failure to do so was sufficient to result in a breach of
the Corporations Act
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Cyber Security Ethics
• Aim of Cybersecurity
• Securing (keeping safe) data, computer systems and networks
(software and hardware)
• Ethical issues are at the core of cybersecurity practices
• Increasingly required to secure and shield the ability of human
individuals and groups to live well
• Example
• Kent, requested that copies of his university transcript be sent
to the ten graduate schools
• Kent does not know that he was recently the victim of a
malicious and undetected intruder into his university’s
network
• The intruder changed a random selection of students’ course
grades to an ‘F.’
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Important Issues
• Harms To Privacy
• Identity theft
• Hacking: to obtain sensitive information about individuals
and their activities
• Global data ecosystem that does not provide individuals
the ability to personally curate, delete, correct, or control
the storage or release of their private information
• Is not just about our online activities,
• Facial, gait, and voice-recognition algorithms, geocoded mobile data
• Sensitive data rarely stays confined to the digital context
in which it was originally created or shared
• Through associations medical provider, law firm, friends
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• Harms to Property
• property can be indirectly threatened by
• violations of data privacy, extortion etc.
• Professionals tasked with cybersecurity have a default
ethical obligation to protect their organization’s networks,
or those of their clients, from any and all property-targeting
intrusions and attacks.
• Cybersecurity Resource Allocation
• Resource allocation can be an ethical issue
• Consider the stakes involved in getting the right balance
between security and other competing resource needs.
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• Data Transparency and Disclosure
• General but limited obligations of transparency
• There are some general transparency and disclosure
guidelines
• Each cybersecurity scenario involves different facts, and
places different goods and interests at stake: no ‘one-size-
fits-all’ rule
• Each case requires careful ethical reflection
• Cybersecurity Roles, Duties and Interests
• A number of distinct roles and interests
• Some of which are in tension with one another
• to whom we owe the greatest ethical concern
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Equifax Data Breach
• Data Breach Notification is a grey area in terms of
business ethics due to lenient laws
• Exemplified by the Equifax’s Data Breach Scandal
in 2017 and the organisation's response to the
public in terms of their duties, stakeholder rights
and the law.
• Ethics and the Law:
• “the minimum level of expected conduct that
everyone is expected to observe (Boatright 2007)
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Data Projection
• UK
• The Data Protection at 1998 Controls how your personal
information is used by organisations
• Australia
• The Privacy Act 1988 (Privacy Act) is the principal piece of
Australian legislation protecting the handling of personal
information about individuals. This includes the collection,
use, storage and disclosure of personal information in the
federal public sector and in the private sector
• US
• Does not have a specific data protection act, but Privacy
and Data is protected by the United States Privacy Act
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Equifax
• Equifax was a company who offers a
comprehensive solution for credit ratings and
protect against fraud
• They offered their services to over 800 million
people and 88 million businesses world wide
• Equifax revealed on 18 September 2017 that 143
million customers in the US and UK has had their
data stolen
• Names, addresses, Dates of Birth and also credit and debit
cards and even possibly passport numbers
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Problem
• The breach occurred 6 weeks before in May/July
2017
• Equifax found out about attack in May 2017 and
prevented further attacks
• They failed to disclose to the stakeholders as soon
as they became aware.
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Magnitude
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Timeline
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Equifax’s Code of Ethics
• Equifax had just prior to the attack had updated
their Ethics code
• The CEO of Equifax
• An important step in meeting our data-to-day ethics and
compliance responsibilities is to be mindful of our
commitments to each other, to our customers, to our
business partners and the communities where we work
and live
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Equifax Repose to the Breach
• They did not react quickly enough and take down
the web portal
• There no comprehensive disaster recovery plan
and displayed poor decision making
• Insider trading – After the breach, before it was
disclosed to the public, executive sold nearly $2
million in shares
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Response to Customers
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Why
• Poor management
• Was the decision driven by self interest?
• Was there a genuine reason for not disclosing the
breach?
• Equifax has not disclosed why they chose not to disclose
the breach
• Does the law come into question?
• Business ethics should act in the best interests of all
stakeholders (de George 2006)
• Equifax filed to follow their own code of ethics
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Deontology
• Equifax’s customers’ rights were overlooked as
they were not informed
• Equifax failed in their moral duty and obligation to
protect data and recognise stakeholders’ rights
• How
• Lack of laws regarding notification of data breaches
• UK
• According to the ICO, the organisation must tell the customers
if they believe personal information has been compromised.
There is no specific timeframe as to when they should disclose
• Prior to the Equifax data breach, there was no data breach
notification laws in the US.
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Privacy Act Australia
• When an organisation has reasonable grounds to believe an
eligible data breach has occurred, they must promptly notify
any individual at risk of serious harm. They must also notify us
(OAIC).
• An eligible data breach occurs when the following criteria are
met:
• There is unauthorised access to or disclosure of personal information
held by an organisation or agency (or information is lost in
circumstances where unauthorised access or disclosure is likely to
occur).
• This is likely to result in serious harm to any of the individuals to
whom the information relates.
• The organisation or agency has been unable to prevent the likely risk
of serious harm with remedial action.
• https://www.oaic.gov.au/privacy/notifiable-data-breaches/report-a-
data-
breach#:~:text=When%20an%20organisation%20or%20agency,They%
20must%20also%20notify%20us.
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Implications
• Equifax had 240 lawsuits
• The event cost the organisation approx. $87.5 million
and faced many Government investigation
• We recognise that we have an important journey in
front of us to regain the trust and confidence of
consumers and our business partners (Paulino do Rego
Barros Jr, 2017)
• All stakeholders involved have suffered due to Equifax’s
poor ethical decision making and lack concern for its
duty and customer rights
• Customers were/are at risk of identity theft, stocks
plummeted
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Aftermath
• US has a Data and Security Breach Notification Act
• Notify stakeholders within 30 days
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What is Privacy?
• Complex phenomenon concerning reputation
• Described as “cluster of rights”
• The idea of keeping information
secret/confidential
• Claim to own body, image, and information
• Physical and decision privacy
• Related to surveillance
• Data Collection
• The challenge
• Preserving privacy while providing security
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What is Privacy?
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Computer Ethics and the Internet
• Computers are the technological backbone
of modern society
• Difficult to envision eventual impact of
computers (ethics evolving)
• The internet and free speech
– Internet has brought about more
communications and hence promoted free
speech
– Having a positive impact on development of
democracy. But…
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• Engineers must envision not only the
intended context which the
equipment will be used, but both
likely and possible abuses
• Hardware protected by patent laws
• Software is often copyrighted
• What about data?
• Company data (protected by law)
• Personal data ??
Engineering….
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• Inappropriate access
• Hackers – e.g., violations of privacy
– Sometimes contend that all information ought
to be freely accessible
• But there are legitimate limits on access to
information:
– Iindividual privacy
– National security
Personal Data - Privacy
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• National Security Agencies (monitored by executive
and legislative branches)
• Engineer’s right/responsibility/obligation to whistle
blow on privacy issues?
– Surveillance really for national security reasons? Actually, for
criminal reasons, discrimination, political reasons, for advertising,
helping healthcare/insurance/credit organizations admit/reject
clients? Other?
– What is a (serious) violation of privacy? Google/Facebook does it
every day!
Re-cap: Privacy vs. Security
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• What other methods are there to protect
the country (e.g., from terrorism)?
• Have the surveillance methods been
successful? People saved, bad guys in
jail/deported, attacks stopped?
• Should you first work from within the
organization, before blowing the whistle?
– Do you really have the expertise to evaluate
the broad issue and trade-offs involved, if many
other elected individuals are doing the same
thing?
Re-cap: Privacy vs. Security
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Legislation
• US - patchwork of rules
• there is no generally applicable federal privacy law
except in relation to children - Children’s Online
Privacy Protection Act (COPPA)
• EU - General Data Protection Regulation (GDPR)
• rules relating to the protection of natural persons with
regard to the processing of personal data and rules relating
to the free movement of personal data.
• fundamental rights and freedoms of natural persons and in
particular their right to the protection of personal data.
• free movement of personal data within the Union shall be
neither restricted nor prohibited for reasons connected
with the protection of natural persons with regard to the
processing of personal data.
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Legislation
• India
• life and personal liberty under Art 21 of the Constitution
of India.
• China
• unveiled its draft of the Personal Information Protection
Law for public consultation (Oct. 21, 2020.)
• Australia (The Privacy Act)
• Australian legislation protecting the handling of
personal information about individuals.
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Privacy Policies of Companies
• Privacy Policy – Privacy & Terms – Google - Google
• We restrict access to personal information
to Google employees, contractors, and agents who need that
information in order to process it. Anyone with this access is
subject to strict contractual confidentiality obligations and
may be disciplined or terminated if they fail to meet these
obligations.
• WeChat Privacy Policy
• WeChat enables certain information to be shared publicly
with your WeChat contacts and other users of WeChat. At any
time, you can hide your profile from public view and search by
unchecking "allow find by phone number, WeChat ID or QQ
ID" in your account settings.
• What is the different between Company Policies and
Legislated Privacy Acts?
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Australia
• The Data Availability and Transparency Bill has
been introduced to the Australian Parliament
• he new Data Availability and Transparency
(formerly, the Data Sharing and Release) legislation
will help maximise the value of our public sector
data, supporting our modern data-based society,
driving innovation, and stimulating economic
growth
• https://youtu.be/IN8NI-jlmxc
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Summary
• Multinational Companies and Obligations
• Ethics and the Law
• Australian Context
Trusted Networks
GSOE9510 STRATEGIC
LEADERSHIP AND ETHICS
Topics:
• Global Issues: Multinational Companies
• International Perspectives
• Australian Context
Ethics lecture slides based on slides of Prof. Prof.
K.M. Passino , Ohio State University
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• Global issues:
– World-wide impacts (the world is shrinking)
– Long time periods (we are learning about this)
– Cross-cultural, multi-national (real impacts; is
doing engineering the same here as
everywhere else?)
• Relevance to engineering?
– Broad thinking in engineering design
process is essential!
– Engineering is naturally cross-cultural
– Globalization is happening!
– Impact on engineering profession is unfolding
What are “global issues”?
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• Technology transfer: “moving technology
to a new location and implementing it
there” (hardware or software)
• Engineers need to be “cross-cultural social
experimenters”
• Appropriate technology: “identification,
transfer, and implementation of the most
suitable technology” (social, cultural, value
factors play a key role)
Multinational corporations
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• Scale (too big, start small...)
• Technical/managerial skills (e.g., for
safety).
• Bhopal disaster
• Materials and energy (availability, cost)
• Physical environment (temperature,
humidity, salinity, water)
• Human values (acceptability to end users)
• Sustainable development
• Impact on local jobs and economy
Appropriate technology
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• Week 1 – (slide 58)
• Union Carbide, based in US, operated in 37 host
countries
• Dec. 3, 1984, a leak and overheating in a storage
tank methyl isocyanate (MIC) used in agricultural
pesticide, in Bhopal, India (pop: 900,000)
• Plant was operated UCIL – 50.9% owned by UC
• MIC burns any moist part of the body, scalding
throats, nasal passages, blinding eyes and
destroying lungs
• Within an hour the leak exploded in a gush that
sent 40 tons of MIC into the atmosphere
• One of he worst industrial accident in history!
Revisiting Bhopal Disaster
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Laying the Groundwork for a
Disaster
• Consequence of the financial ill health of the Bhopal
plant was that operating staff was cut to a minimum,
training programs were reduced, and equipment was
allowed to deteriorate
• Instrumentation at Bhopal was so unreliable that it was
common for gas leaks of various types to be detected by
workers reporting tearing and burning sensations in their eyes
• Report by UCC inspectors in 1982 indicated many
serious problems, but there was no follow-up inspection
to verify that these had been cleared up.
• reliance was placed on paper assurances that the observed
defects had been remedied
• system of pipes and valves at the plant was very complex, and
the valves were poorly marked
• Valve maintenance was minimal and failures common
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Safety - Watchdogs
• Where were the government officials whose
responsibility it was to safeguard worker and public
safety?
• Both national and state governments repeatedly overlooked
serious deficiencies at the facility
• People were permitted to live in the neighbourhood despite
the obvious potential for disaster
• Inspectors did not inspect, regulators failed to regulate
• Most of the engineers were mechanical engineers, not
knowledgeable about chemical processes.
• While the crisis was in full swing, the local government
did a poor job in assisting people to escape from the
afflicted area and in organizing medical treatment for
the victims
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500,000 persons exposed
• The toll
– 2500-3000 deaths within a few days
– 10,000 personally disabled
– 100,000-200,000 injured (exact figures disputed)
• Statics ten years later
– 12,000 death claims
– 870,000 personal injury claims
• 2001 victims/families received
compensation from Union Carbide of $600
each
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Observations (1)
• Greater sensitivity to social factors was needed in
transferring chemical technology
• Extent of disaster would have been lessened if Union
Carbide had used smaller tanks to store MIC (as required
in France)
• Govt of India required Bhopal to be operated entirely by
Indian workers
– Union Carbide in the beginning spent much training Indian
workers
– Union Carbide initially had U.S. engineers make site visits for
safety inspections
– BUT, in 1982, financial pressures led Union Carbide to relinquish
its supervision of safety at Bhopal
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Observations (2)
• In the following two years safety practices eroded
• High turnover of employees
• Failure to properly train new employees
• Low technical preparedness of the local labour pool
• Plant moved from US safety standards to lower Indian
standards
• By 1984, several extreme hazards, and many smaller
ones, were present
• Possible Lesson:
• Be very careful in dealing with transfer of dangerous
technologies to other countries.
• It requires years of diligence and financial commitment.
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Some Additional Facts
• Issue of the handling of MIC.
• The questions of how much MIC should be kept on hand
and how it should be stored ?
• Since it was a key factor in the production of Sevin,
manufacturing it in quantity and keeping large stocks on
hand was economically advantageous.
• However, due to its instability and toxicity, this was a
dangerous course of action, particularly where the
competence of the organization was questionable.
• This point is underscored in a post-accident affidavit filed
by Edward Munoz, an American who had previously been a
managing director of UCIL. He stated that UCIL had
opposed storing large quantities of MIC but had been
overruled by UCC.
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Questions (Legal)
• How should the victims of the catastrophe be
compensated?
• How should the blame be assigned?
• Legal
• The first issue that had to be resolved in the Bhopal case
was one of jurisdiction. The disaster occurred in India, but
the corporation involved, UCIL, is controlled by an
American company.
• Should the case be tried in India under Indian law or should
it be tried in the United States under American law?
• What is the engineer's role?
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• When we leave home and cross national
boundaries, moral clarity often blurs
• No shared attitudes, familiar laws and judicial procedures
that define standards of ethical conduct
• What are the principles that can help them work
through the maze of cultural differences and
establish codes of conduct for globally ethical
business practice? (Ethical leadership)
• How can companies answer the toughest question
in global business ethics
• What happens when a host country’s ethical standards
seem lower than the home country’s?
Mangers/Engineers moral
responsibilities at a global scale?
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What is Ethical Absolutism
• Ethical absolutism
• One detailed world-wide set of rules
• Concept that ethical rules are the same everywhere.
• Consider that the United Nations unanimously passed the
Universal Declaration of Human Rights, from which some
of those rights are:
• Everyone has the right to life, liberty, and security of person
• No one shall be held in slavery or servitude.
• No one shall be subjected to arbitrary arrest, detention, or exile.
• No one shall be arbitrarily deprived of his property.
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What is Ethical Absolutism
• Any system of ethical thought that focuses
strongly on one’s rights and duties is likely founded
upon the concept of ethical absolutism
• Many religions promulgate a set of “thou shalt not”
rules that do not allow for varying interpretations
under any circumstances - these rules are all based
on ethical absolutism
• Different cultural traditions must be respected
• People must express moral truth using only one
set of concepts
• Belief in a global standard of ethical behaviour
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Balancing the Extremes
• Companies must help managers distinguish
between practices that are merely different and
those that are wrong.
• Relativists:
• Nothing is sacred, and nothing is wrong.
• Absolutists:
• Many things that are different are wrong.
• Neither extreme illuminates the real world of
business decision making.
• The answer lies somewhere in between.
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Balancing the Extremes
Three Guiding Principles
• Three guiding principles:
• Respect for core human values, which
determine the absolute moral threshold for
all business activities
• Respect for local traditions
• Take context into account when deciding
what is right and what is wrong
• Other Principles
• Ethical responsibilities and obligations do not stop at a border
• Wherever engineers practice, they should protect the health,
safety, and welfare of the public!
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1. Right to freedom of physical movement
2. Right to ownership of property
3. Right to freedom from torture
4. Right to a fair trial
5. Right to nondiscriminatory treatment
6. Right to physical security
7. Right to freedom of speech and association
8. Right to minimal education
9. Right to political participation
10. Right to subsistence
Corresponding duties/obligations?
Example: Women
engineers’ rights and
nondiscrimination
Question: Does
Australia valways
follow these?
Any of them,
fully?
International Human Rights
(see also UN Universal Declaration on Human Rights)
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Cultural Relativism
• The view that ethical and social standards reflect the cultural
context from which they are derived from
• Cultural relativists uphold
• Cultures differ fundamentally from one another, and
• So do the moral frameworks that structure relations within different
societies.
• In international relations, cultural relativists determine
whether an action is 'right' or 'wrong' by evaluating it
according to the ethical standards of the society within which
the action occurs.
• There is a debate in the field on whether value judgements
can be made across cultures.
• Cultural relativism should not be confused with moral
relativism, which holds that moral absolutes guiding
individual behaviour do not exist as a matter of principle.
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Competing Answers
• If the people of Sri Lanka tolerate the bribery of
their public officials, so what?
• Their attitude is no better or worse than that of people in
Denmark or Singapore who refuse to offer or accept bribes.
• Belgians fail to find insider trading morally
repugnant, who cares?
• Not enforcing insider-trading laws is no more or less ethical
than enforcing such laws
*Values in Tension: Ethics Away from Home by Thomas Donaldson, HBR (From the
Magazine, 1996) (next few slides)
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• The cultural relativist’s creed
• When in Rome, do as the Romans do (“ethical
relativism”)
• Failing to do as the locals do means forfeiting
business opportunities
• Inadequacy of cultural relativism,
• when the practices in question are more
damaging than petty bribery or insider trading
Mangers/Engineers moral
responsibilities at a global scale?
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• Example: Statistics on Software Piracy (1996):
• In the United States, pirated software is estimated to be
35% of the total software market, and industry losses are
estimated at $2.3 billion per year. The piracy rate is 57% in
Germany and 80% in Italy and Japan; the rates in most
Asian countries are estimated to be nearly 100%.
• There are similar laws against software piracy in
those countries. What, then, accounts for the
differences?
• A country’s level of economic development
• Culture, including ethical attitudes, may be a more crucial
factor
Mangers/Engineers moral
responsibilities at a global scale?
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Consequences
• What happens if ethical attitudes around
the world permit large-scale software
piracy?
• Companies won’t want to invest as much in
developing new products, because they cannot
expect any return on their investment in certain
parts of the world.
• Ethics fail to support technological creativity,
there are consequences that go beyond statistics
• Jobs are lost and livelihoods jeopardized.
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Another Example
• A group of investors became interested in
restoring the SS United States, once a luxurious
ocean liner.
• Before the actual restoration could begin, the
ship had to be stripped of its asbestos lining.
• A bid from a U.S. company, based on U.S. standards
for asbestos removal, priced the job at more
than $100 million.
• A company in the Ukranian city of Sevastopol offered
to do the work for less than $2 million.
• The ship was towed to Sevastopol
• What is your opinion?
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Opposing Views
• Cultural Relativist
• Would have no problem – good deal.
• A country has the right to establish its own health and safety
regulations
• Ethical Absolutism
• The standards and the terms of the contract could not
possibly have protected workers in Sevastopol from known
health risks.
• Even if the contract met Ukranian standards, ethical
businesspeople must object.
• Cultural relativism is morally blind
• There are fundamental values that cross cultures, and
companies must uphold them
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AWB oil-for-wheat scandal
(Non Engineering)
• Involves the payment of kickbacks to the regime of Saddam Hussein
in contravention of the United Nations Oil-for-Food Humanitarian
Program
• AWB was the Australian Government entity operating a single desk
regime over Australian wheat (export monopoly for Australian wheat,
paid a single price)
• In the mid-2000s, it was found to have been, through middlemen,
paying kickbacks to the regime of Saddam Hussein, in exchange for
lucrative wheat contracts
• This was in direct contradiction of United Nations Sanctions, and of
Australian law
• AWB delivered 90% of the Iraqi wheat market, before its practices
were questioned in 2005
• The Australian Government also launched a Royal Commission
• Criminal proceedings commence against 12 people
• Ultimately, criminal charges were dropped by the Australian Federal Police
https://en.wikipedia.org/wiki/AWB_oil-for-wheat_scandal
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Analysis
• Example of how poor management of so-called
"soft" business ethics issues can rapidly translate
into hard outcomes for share owners.
• In 2006 AWB lost more than a third of its market
capitalisation
• May lose up to two-thirds of its value should it lose its
wheat export monopoly as a consequence of the massive
damage to reputation it has brought upon itself
• At the time, the scandal was described in dollar
terms as the biggest corruption of its kind in the
nation's history.
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Legal Implications
• The Supreme Court of Victoria has found that Trevor
Flugge, the former chairman and director of AWB
Limited (AWB)
• Breached his duties as a director by failing to make inquiries
and prevent conduct by AWB that contravened United
Nation’s sanctions.
• Despite court finding that Mr Flugge did not participate in, or did
not have any direct knowledge about, the contravening conduct
• The Court dismissed similar allegations against Mr
Geary, a former senior executive of AWB.
• When irregularities are, or should be, suspected,
directors have a duty to investigate.
• A failure to do so was sufficient to result in a breach of
the Corporations Act
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Cyber Security Ethics
• Aim of Cybersecurity
• Securing (keeping safe) data, computer systems and networks
(software and hardware)
• Ethical issues are at the core of cybersecurity practices
• Increasingly required to secure and shield the ability of human
individuals and groups to live well
• Example
• Kent, requested that copies of his university transcript be sent
to the ten graduate schools
• Kent does not know that he was recently the victim of a
malicious and undetected intruder into his university’s
network
• The intruder changed a random selection of students’ course
grades to an ‘F.’
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Important Issues
• Harms To Privacy
• Identity theft
• Hacking: to obtain sensitive information about individuals
and their activities
• Global data ecosystem that does not provide individuals
the ability to personally curate, delete, correct, or control
the storage or release of their private information
• Is not just about our online activities,
• Facial, gait, and voice-recognition algorithms, geocoded mobile data
• Sensitive data rarely stays confined to the digital context
in which it was originally created or shared
• Through associations medical provider, law firm, friends
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• Harms to Property
• property can be indirectly threatened by
• violations of data privacy, extortion etc.
• Professionals tasked with cybersecurity have a default
ethical obligation to protect their organization’s networks,
or those of their clients, from any and all property-targeting
intrusions and attacks.
• Cybersecurity Resource Allocation
• Resource allocation can be an ethical issue
• Consider the stakes involved in getting the right balance
between security and other competing resource needs.
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• Data Transparency and Disclosure
• General but limited obligations of transparency
• There are some general transparency and disclosure
guidelines
• Each cybersecurity scenario involves different facts, and
places different goods and interests at stake: no ‘one-size-
fits-all’ rule
• Each case requires careful ethical reflection
• Cybersecurity Roles, Duties and Interests
• A number of distinct roles and interests
• Some of which are in tension with one another
• to whom we owe the greatest ethical concern
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Equifax Data Breach
• Data Breach Notification is a grey area in terms of
business ethics due to lenient laws
• Exemplified by the Equifax’s Data Breach Scandal
in 2017 and the organisation's response to the
public in terms of their duties, stakeholder rights
and the law.
• Ethics and the Law:
• “the minimum level of expected conduct that
everyone is expected to observe (Boatright 2007)
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Data Projection
• UK
• The Data Protection at 1998 Controls how your personal
information is used by organisations
• Australia
• The Privacy Act 1988 (Privacy Act) is the principal piece of
Australian legislation protecting the handling of personal
information about individuals. This includes the collection,
use, storage and disclosure of personal information in the
federal public sector and in the private sector
• US
• Does not have a specific data protection act, but Privacy
and Data is protected by the United States Privacy Act
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Equifax
• Equifax was a company who offers a
comprehensive solution for credit ratings and
protect against fraud
• They offered their services to over 800 million
people and 88 million businesses world wide
• Equifax revealed on 18 September 2017 that 143
million customers in the US and UK has had their
data stolen
• Names, addresses, Dates of Birth and also credit and debit
cards and even possibly passport numbers
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Problem
• The breach occurred 6 weeks before in May/July
2017
• Equifax found out about attack in May 2017 and
prevented further attacks
• They failed to disclose to the stakeholders as soon
as they became aware.
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Magnitude
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Timeline
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Equifax’s Code of Ethics
• Equifax had just prior to the attack had updated
their Ethics code
• The CEO of Equifax
• An important step in meeting our data-to-day ethics and
compliance responsibilities is to be mindful of our
commitments to each other, to our customers, to our
business partners and the communities where we work
and live
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Equifax Repose to the Breach
• They did not react quickly enough and take down
the web portal
• There no comprehensive disaster recovery plan
and displayed poor decision making
• Insider trading – After the breach, before it was
disclosed to the public, executive sold nearly $2
million in shares
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Response to Customers
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Why
• Poor management
• Was the decision driven by self interest?
• Was there a genuine reason for not disclosing the
breach?
• Equifax has not disclosed why they chose not to disclose
the breach
• Does the law come into question?
• Business ethics should act in the best interests of all
stakeholders (de George 2006)
• Equifax filed to follow their own code of ethics
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Deontology
• Equifax’s customers’ rights were overlooked as
they were not informed
• Equifax failed in their moral duty and obligation to
protect data and recognise stakeholders’ rights
• How
• Lack of laws regarding notification of data breaches
• UK
• According to the ICO, the organisation must tell the customers
if they believe personal information has been compromised.
There is no specific timeframe as to when they should disclose
• Prior to the Equifax data breach, there was no data breach
notification laws in the US.
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Privacy Act Australia
• When an organisation has reasonable grounds to believe an
eligible data breach has occurred, they must promptly notify
any individual at risk of serious harm. They must also notify us
(OAIC).
• An eligible data breach occurs when the following criteria are
met:
• There is unauthorised access to or disclosure of personal information
held by an organisation or agency (or information is lost in
circumstances where unauthorised access or disclosure is likely to
occur).
• This is likely to result in serious harm to any of the individuals to
whom the information relates.
• The organisation or agency has been unable to prevent the likely risk
of serious harm with remedial action.
• https://www.oaic.gov.au/privacy/notifiable-data-breaches/report-a-
data-
breach#:~:text=When%20an%20organisation%20or%20agency,They%
20must%20also%20notify%20us.
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Implications
• Equifax had 240 lawsuits
• The event cost the organisation approx. $87.5 million
and faced many Government investigation
• We recognise that we have an important journey in
front of us to regain the trust and confidence of
consumers and our business partners (Paulino do Rego
Barros Jr, 2017)
• All stakeholders involved have suffered due to Equifax’s
poor ethical decision making and lack concern for its
duty and customer rights
• Customers were/are at risk of identity theft, stocks
plummeted
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Aftermath
• US has a Data and Security Breach Notification Act
• Notify stakeholders within 30 days
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What is Privacy?
• Complex phenomenon concerning reputation
• Described as “cluster of rights”
• The idea of keeping information
secret/confidential
• Claim to own body, image, and information
• Physical and decision privacy
• Related to surveillance
• Data Collection
• The challenge
• Preserving privacy while providing security
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What is Privacy?
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Computer Ethics and the Internet
• Computers are the technological backbone
of modern society
• Difficult to envision eventual impact of
computers (ethics evolving)
• The internet and free speech
– Internet has brought about more
communications and hence promoted free
speech
– Having a positive impact on development of
democracy. But…
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• Engineers must envision not only the
intended context which the
equipment will be used, but both
likely and possible abuses
• Hardware protected by patent laws
• Software is often copyrighted
• What about data?
• Company data (protected by law)
• Personal data ??
Engineering….
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• Inappropriate access
• Hackers – e.g., violations of privacy
– Sometimes contend that all information ought
to be freely accessible
• But there are legitimate limits on access to
information:
– Iindividual privacy
– National security
Personal Data - Privacy
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• National Security Agencies (monitored by executive
and legislative branches)
• Engineer’s right/responsibility/obligation to whistle
blow on privacy issues?
– Surveillance really for national security reasons? Actually, for
criminal reasons, discrimination, political reasons, for advertising,
helping healthcare/insurance/credit organizations admit/reject
clients? Other?
– What is a (serious) violation of privacy? Google/Facebook does it
every day!
Re-cap: Privacy vs. Security
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• What other methods are there to protect
the country (e.g., from terrorism)?
• Have the surveillance methods been
successful? People saved, bad guys in
jail/deported, attacks stopped?
• Should you first work from within the
organization, before blowing the whistle?
– Do you really have the expertise to evaluate
the broad issue and trade-offs involved, if many
other elected individuals are doing the same
thing?
Re-cap: Privacy vs. Security
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Legislation
• US - patchwork of rules
• there is no generally applicable federal privacy law
except in relation to children - Children’s Online
Privacy Protection Act (COPPA)
• EU - General Data Protection Regulation (GDPR)
• rules relating to the protection of natural persons with
regard to the processing of personal data and rules relating
to the free movement of personal data.
• fundamental rights and freedoms of natural persons and in
particular their right to the protection of personal data.
• free movement of personal data within the Union shall be
neither restricted nor prohibited for reasons connected
with the protection of natural persons with regard to the
processing of personal data.
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Legislation
• India
• life and personal liberty under Art 21 of the Constitution
of India.
• China
• unveiled its draft of the Personal Information Protection
Law for public consultation (Oct. 21, 2020.)
• Australia (The Privacy Act)
• Australian legislation protecting the handling of
personal information about individuals.
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Privacy Policies of Companies
• Privacy Policy – Privacy & Terms – Google - Google
• We restrict access to personal information
to Google employees, contractors, and agents who need that
information in order to process it. Anyone with this access is
subject to strict contractual confidentiality obligations and
may be disciplined or terminated if they fail to meet these
obligations.
• WeChat Privacy Policy
• WeChat enables certain information to be shared publicly
with your WeChat contacts and other users of WeChat. At any
time, you can hide your profile from public view and search by
unchecking "allow find by phone number, WeChat ID or QQ
ID" in your account settings.
• What is the different between Company Policies and
Legislated Privacy Acts?
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Australia
• The Data Availability and Transparency Bill has
been introduced to the Australian Parliament
• he new Data Availability and Transparency
(formerly, the Data Sharing and Release) legislation
will help maximise the value of our public sector
data, supporting our modern data-based society,
driving innovation, and stimulating economic
growth
• https://youtu.be/IN8NI-jlmxc
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Summary
• Multinational Companies and Obligations
• Ethics and the Law
• Australian Context
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