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Introduction

 

One can denote business ethics codes of morals, values, and principles, both written and unwritten governing a firm’s actions and decisions. To determine good and bad behaviour, decision-makings there exists a set of standards within the corporate world. Covering all right from corporate governance to corporate social responsibility, the domain of business ethics, which is a subjective term, is wide although identification of unethical business practices in organizations, for example involvement of child labour, bribery, or use of copyrighted materials illegally is easier. The outcome of following the guidelines of ethics is development of trust amidst employees and management, along with public and the company eventually leading a workplace that is highly productive (Wang, 2014). Companies by following business ethics can reap benefits revolving around keeping and attracting employees, customers, and investors. Reputation for an organization irrespective of its sector, type and size, is widely perceived not only as an important asset but also one of the most challenging tasks of rebuilding once lost. With continual ethical behaviour a company is more likely in building a good reputation besides attracting potential investors and shareholders; keeping its share prices high. Businesses for retaining their positive reputation and image in the market should be committed to function on ethical foundation for ensuring they relate to surrounding environment, treatment of employees, and good market practices with reference to customer treatment and product pricings. Also companies standing on the foundation of strong business ethics are more likely in retaining employees for a longer period. Many academicians have argued that the impact of strong business ethics can be seen on the increased productivity of the employees, making them feeling comfortable and wanting to remain associated with the business for a longer-term. Such an environment motivates them in following the organization’s footsteps, which is the ultimate benefiter when employees do their job with integrity, honesty and by following the guidelines (Quarshie, et al., 2016). To begin with this report study Unions and labour rights experts call on Ansell to protect worker rights in its supply chains has been chosen as the case study. According to the article published in 12th December 2018, Australian company Ansell, which operates into industrial, healthcare and life sciences protection sector, was called up by the unions and labour rights experts for improving its efforts in protecting the workers of Top Glove factories in Malaysia, the world's largest rubber gloves manufacturer and its supplier, witnessing several problems (Khadem, 2018). In this report study, a summary of the arguments given in the chosen articles will be briefly discussed, which will be followed by discussing the ethical issues that is raised and own personal opinion if an suitable ethical decision was made, and finally concluding it with own ethical decision-making processes.

Discussion 

It is evident from the chosen article that according to an investigation report claimed by ABC News, the glove manufacturing company Top Glove is facing several problems. Hefty fees as recruitment is charged from Nepal and Bangladeshi migrant workers, keeping them debt bondage besides been forced to work excessive overtime that includes 30 days in a row without a rostered day off, passports taken away and living in overcrowded conditions. Over 21 million people as reported by United Nations' International Labour Organisation globally are forced labourers, half of them are found to be located in the regions of Asia-Pacific, having the supply chains of most large Australian businesses. However, with governments getting more involved and noticing more, the workers conditions in Malaysia and elsewhere is hoping to witness steady improvement, says the founder of British Medical Association's Medical Fair and Ethical Trade Group, Mahmood Bhutta (Khadem, 2018). He further emphasizes that poor living conditions and plight of the migrant labourers should also be noticed and changes needs to be forced by firms like Ansell in terms of correctly taking its ethical procurement thereby, ensuring the protection of factory workers all through their supply chains. For demonstrating their non-participation and reaping profits by exploiting, abusing and mistreating vulnerable people in their supply chain, it is need of the hour that decent standards is set by Ansell in their own factories and across their supply chains, argues Michele O'Neil, President, Australian Council of Trade Unions. For discussing the violations of human rights and illegal treatment of workers at Top Glove, senior social justice advocate of Uniting Church Mark Zirnsak had called for an urgent meeting in mid-2016 seeking Ansell’s assurances regarding the Malaysian factory workers being engaged by adhering with the country’s labour laws.

In past too Top Glove and Ansell were charged of mistreating their workers. According to various media reports Top Glove's factory in Meru, Malaysia were locked up with workers inside in 2014. Disciplinary procedure was invoked by the company for detaining the workers forcibly for five days in the factory, reveals Tenaganita, a human rights group. During this period complaints were made by several workers that included Nepal migrants about the mistreatments practiced by Top Glove. However, a different story was presented by the company and post the incident had adopted better practices to manage problem-making workers, who ahead of being repatriated to their home country are handed over to police custody. Co-director of Tenaganita emphasizes that Top Glove being powerful, many workers hesitate to come forward for sharing their plights (Khadem, 2018). But with new government labour standards at Malaysian firms is likely to improve. Ansell in 2016 has been charged with abuse of worker rights when serious labour rights concerns were documented by British Medical Association Medical Fair and Ethical Trade Group and published as In Good Hands: Tackling Labour Rights Concerns in the Manufacture of Medical Gloves. Also in 2013 IndustriALL, a trade union federation that represents 50 million workers across 140 countries globally had filed a complaint against Ansell's Sri Lanka based factory where mistreatment of workers was prevalent for meeting the production speed-up targets requiring every person to make 60-70 pairs of surgical gloves per minute. Moreover, a separate 2015 audit of Ansell's Malaysia factory in Melaka reveals the breaches in labour standards, claimed earlier by ABC News. Subsequently owing to international campaigns and complaints Ansell was forced in improving the working conditions of its factories located in Sri Lanka and Malaysia besides bearing the recruitment fees across all factories.

Ansell in a recent statement had announced to report slavery risks in their supply chains and the actions taken for reducing them under the legislated modern slavery law where Australian companies generating more than $100 million revenue annually. The company further intends of publicly revealing the reports of its supply chains by 2020. Additionally, a mandatory framework for migrant workers recruitment and retention has also been introduced apart from rolling out other changes for mitigating the risk of slavery and human trafficking in its supply chain and business. For beginning third-party audits of its top-tier suppliers globally, Ansell would work with Supplier Ethical Data Exchange (Sedex). Human right experts however emphasize that human rights due diligence protections and provisions should be embedded by Ansell into their all commercial contracting arrangements besides ensuring effective compliance due diligence as an industry leader (Khadem, 2018).

The article that has been chosen for this study raises key ethical issue i.e. corporate governance.  According to ABC News investigation both Top Glove and Ansell have been time and again facing the heat of workers mistreatment in its overseas factories. Although problems reported in Sri Lankan and Malaysian factories have been cleaned up by Ansell however, it fails repeatedly in giving similar assurances about working conditions across all its suppliers in Malaysia namely Top Glove, WRP and Kossan. High recruitment fees is charged by Top Glove eventually forcing the workers clocking excessive overtime for paying off debts, passports confiscated despite signing consent forms, salary withholdings for deductions, crowded living conditions and restriction of movement. As an industry leader Ansell had failed to intervene and protect the basic human rights of the workers employed in its main supplier’s factory which is widely perceived as the company brushing of its responsibility in implementing its standard corporate governance. However, with growing global media attention the company now has been forced to develop and install codes and monitoring systems applicable al through its supply chains.

Corporate governance, which is the accountability of Boards of directors, can be described as a system for directing and controlling the organizations like Ansell. Facilitating effective, entrepreneurial and prudent management for delivering a company’s long-term success is the purpose of corporate governance. In the progressive and aggressive business environment of today, the significance of corporate governance cannot be denied. Corporate governance, according to Financial Times is critical in achieving a new frontier of competitive advantage and profitability. However, for greater effectiveness it must comply with the principles revolving around shareholder recognition and their equal treatment, well-defined board’s role, ethical behaviour and transparency (Filatotchev and Nakajima, 2014). Failure or ineffectiveness of a firm’s governance mechanism can drive in disastrous consequences for the business like that of the case of Ansell. Over the years many large organisations like Enron, Satyam, Cadbury, Walmart and Xerox have face the burnt the of corporate governance failures further forcing them in rethinking their stand. In the wake of global media attention, campaigns staged by labour right groups and unions calling on Ansell for ensuring its supply chains are clean, it has started investigation against the major Malaysian suppliers, in particular Top Glove regarding workers right abuse charges and has announced to dump any supplier if found guilty besides improving the conditions of its own Malaysian factories.  The company’s stand on allegations made is an evident exemplar of its clear approach of focusing on good and quality corporate governance, which in my opinion is an appropriate ethical decision. This will help Ansell in bringing all its suppliers on one page by getting their mutual agreements for ensuring all employment practices are in compliance with standards set by International Labour Organisation along with its own guidelines for sustainability. In addition, implementing good corporate governance throughout all supply chains will secure Ansell’s corporate success and economic growth (Moene and Søreide, 2015).

According to a 3rd August 2018 article another large company having global presence is witnessing rise in violations of labour and human rights in its global supply chain, and it is Apple Inc. Numerous “core violations” such as labour violations, working hours falsification, harassment and underage staff are reported in Apple’s Supplier Responsibility Progress Report revealing the poor working conditions of its supply chain employees in 30 countries. 22 cases of core violation were reported in 2016 while 44 major violations reported in 2017. Introduction of new suppliers in 2017 is noted to be root cause of increasing violations (Murdock, 2018). An organization’s role in ethical decision-making is primarily addressed by the discussions of business ethics, literally influenced by moral philosophies further contributes to differentiate between right and wrong. Deontology philosophy is perceived the most relevant moral philosophy outlining the process of ethical decision-making, having focus on employees’ rights and intentions behind behaviours instead of its out-turnings. Aligning this philosophy with Ansell will definitely inculcate commitment of ensuring transparency and maintenance of clean supply chains eventually winning the trust of consumers, resulting into business growth (Greene, 2015).

 Conclusion 

From the above study it can be finally concluded that according to the chosen articles Ansell despite of being aware of the malpractices and violations of labour rights prevalently practiced throughout its all supply chains, particularly in its major supplier Top Glove’s factory in Malaysia, the company being an industry leader shied away from playing its role in improving the working conditions and ensuring protection to the workers, a major section of whom were migrant. Not only was this Ansell directly was accused of many violations however, with global media attention, the management was forced to investigate the allegations and adopt new measures of improvements. Adherence with business ethics is the key that will drive Ansell towards desired profitability by foreseeing that all its supply chains spread worldwide operate ethically.

References

Filatotchev, I. and Nakajima, C., 2014. Corporate governance, responsible managerial behavior, and corporate social responsibility: Organizational efficiency versus organizational legitimacy?. Academy of Management Perspectives28(3), pp.289-306.

Greene, J.D., 2015. Beyond point-and-shoot morality: Why cognitive (neuro) science matters for ethics. The Law & Ethics of Human Rights9(2), pp.141-172.

Khadem, N., 2018. Unions and labour rights experts call on Ansell to protect worker rights in its supply chains, viewed 29 January, 2019, .

Moene, K. and Søreide, T., 2015. Good governance facades. Greed, corruption, and the modern state: Essays in political economy, pp.46-70.

Murdock, J., 2018. APPLE: HUMAN RIGHTS VIOLATIONS IN SUPPLY CHAIN DOUBLE IN A YEAR, REPORT REVEALS, viewed 30 January, 2019, <

Quarshie, A.M., Salmi, A. and Leuschner, R., 2016. Sustainability and corporate social responsibility in supply chains: The state of research in supply chain management and business ethics journals. Journal of Purchasing and Supply Management22(2), pp.82-97.

Wang, C.J., 2014. Do ethical and sustainable practices matter? Effects of corporate citizenship on business performance in the hospitality industry. International Journal of Contemporary Hospitality Management26(6), pp.930-947

 

 

 

 

 

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